INDUSTRIAL DEVELOPMENT

An industry is the production of goods or related services within an economy. (WIKIPEDIA)

industrial development
the planning and building of new industries in special areas

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Industrialization and Economic

Development
Industrialization plays a vital role in the economic development of underdeveloped countries. As the
historical record shows, the developed countries of the world broke the vicious cycle of poverty by
industrializing, rather than focusing on agricultural or the production of national resources.

Currently, Pakistan, as a developing country, wants to achieve a higher standard of living for its people.
For this reason, it is pursuing policies that support privatization and deregulation of the economy.

Industry plays a complex role in economic development, but these are some of its most important
effects.

1. Increase in National Income

Industrialization allows countries to make optimal use of their scarce resources. It increases the quantity
and quality of goods manufactured in that company, which makes a larger contribution to gross national
product (GNP).

2. Higher Standard of Living

In an industrialized society, workers' labor is worth more. In addition, because of higher productivity,
individual income increases. This rise in income raises the standard of living for ordinary people.

3. Economic Stability
A nation that depends on the production and export of raw material alone cannot achieve a rapid rate of
economic growth. The restricted and fluctuating demand for agricultural products and raw materials—
along with the uncertainties of nature itself—hampers economic progress and leads to an unstable
economy. Industrialization is the best way of providing economic stability.

4. Improvement in Balance of Payments

Industrialization changes the pattern of foreign trade in the country. It increases the export of
manufactured goods, which are more profitable in foreign exchange. But at the same time, processing
the raw material at home curtails the import of goods, thereby helping to conserve foreign exchange. The
export-orientation and import-substitution effects of industrialization help to improve the balance of
payments. In Pakistan in particular, the exports of semi-manufactured and manufactured goods resulted
in favorable trends.
5. Stimulated Progress in Other Sectors
Industrialization stimulates progress in other sectors of the economy. A development in one industry
leads to the development and expansion of related industries. For instance, the construction of a
transistor radio plant will develop the small-battery industry. (This is an example of backward linkage.) In
another case, the construction of milk processing plants adds to the production of ice cream as well. (This
is forward linkage.)

6. Increased Employment Opportunities

Industrialization provides increased employment opportunities in small- and large-scale industries. In an
industrial economy, industry absorbs underemployed and unemployed workers from the agricultural
sector, thereby increasing the income of the community.

7. Greater Specialization of Labor

Industrialization promotes specialized labor. This division of work increases the marginal value product of
labor. In other words, specialized labor is more profitable. The income of a worker in the industrial sector
will be higher on average than that of a worker in the agricultural sector.

8. Rise in Agricultural Production

Industrialization provides machinery to the farm sectors, including technologies like tractors, thrashers,
harvesters, bulldozers, transport, and aerial spray. The increased use of modern technologies has
increased the yield of crops per hectare. The increase in farmers' income boosts economic development
more generally.

9. Greater Control of Economic Activity

Industrial activity is easier to control and regulate than agricultural activity. Industrial production can be
expanded—or cut down—to respond to the price and cost of, and demand for, a product.

10. Larger Scope for Technological Progress

Industrialization provides greater potential for on-the-job training and technological progress. The use of
advanced technology increases the scale of production, reduces costs, improves the quality of the
product, and ultimately helps to widen the market.

11. Reduction in the Rate of Population Growth

In a somewhat roundabout way, industrialization leads to smaller families. Surplus workers migrate from
the farm sector to industries, which are mostly situated in urban centers. Cities have better sanitation
facilities, and health care is more widely available there. Through the adoption of family-planning
measures, people reduce the rate of population growth overall.

12. Increased Savings and Investments

Because industrialization increases workers' income, it also enhances their capacity to save. These
voluntary savings stimulate economic growth. By cumulative effect, they eventually lead to the further
expansion of industry.

13. Provision for Defense

If a country is industrialized, it can manufacture arms and ammunition that are necessary for its own self-
defense. A country that depends on other nations for its arms supply will eventually suffer, and may face
a serious defeat. Pakistan's two wars with India should open its people's eyes to the importance of this
issue.
14. Lesser Pressure on Land
The establishment and expansion of industries lessons excessive pressure on land, which is caused by the
agricultural sector's labor force.

15. Development of Markets

With the development of industry, the market for raw materials and finished goods widens even within
the country.

16. Increase in Government Revenue

Industrialization increases the supply of goods for both external and internal markets. The exports of
goods provides foreign exchange, as we know. In addition, the customs excise duties and other taxes
levied on goods increase the revenue of the country's government. The income tax received from
industrialists also adds to the revenue stream of the government, and is eventually spent for the welfare
of the country as a whole.

Role of Industrial Development in

Economic Growth
The following points explain the role of industrial development in
economic growth:

1. Modernisation of Industry:
Industrial development is necessary for modernisation of agriculture. In
India, agriculture is traditional and backward. The cost of production is
high and productivity is low. We need tractors, threshers, pump sets and
harvesters to modernise agriculture. To increase productivity, we need
chemical fertilizers, pesticides and weedicides etc. These are all industrial
products. Without industrial development, these goods cannot be
produced. Agricultural products like jute, cotton, sugarcane etc. are raw
materials. To prepare finished products like flex, textiles and sugar etc.
we need industrialisation. So industrial development is necessary for
modernisation of agriculture.

2. Development of Science and Technology:

Industrial development encourages the development of science and
technology. The industrial enterprises conduct research and develop new
products. Ethanol in the form of biofuel is an example of industrial
development. Industry conducts research on its wastes and develops
byproducts like biodiesel from Jatropha seeds. Due to industrialisation,
we have made progress in atomic science, satellite communication and
missiles etc.

3. Capital Formation:
Acute deficiency of capital is the main problem of Indian economy. In
agricultural sector, the surplus is small. Its mobilisation is also very
difficult. In large scale industries, the surplus is very high. By using
external and internal economies, industry can get higher profit. These
profits can be reinvested for expansion and development. So
industrialisation helps in capital formation.

4. Industrialisation and Urbanisation:

Urbanisation succeeds industrialisation. Industrialisation in a particular
region brings growth of transport and communication. Schools, colleges,
technical institutions, banking and health facilities are established near
industrial base. Rourkela was dense forest but now is ultra modern town
in Orissa. Many ancillary units have been established after setting up of
big industry.

5. Self-reliance in Defence Production:

To achieve self-reliance in defence production, industrialisation is
necessary. During war and emergency dependence on foreign countries
for war weapons may prove fatal. Self-reliance in capital goods and
industrial infra-structure is also necessary. Atomic explosion at Pokhran
(Rajasthan) and Agni Missile are examples of industrial growth.

6. Importance in International Trade:

Industrialisation plays an important role in the promotion of trade. The
advanced nations gain in trade than countries who are industrially
backward. The underdeveloped countries export primary products and
import industrial products. Agricultural products command lower prices
and their demand is generally elastic. While industrial products command
higher values & their demand is inelastic. This causes trade gap. To meet
the deficit in balance of payments we have to produce import substitute
products or go for export promotion through industrial development.

7. Use of Natural Resources:

It is a common saying that India is a rich country inhabited by the poor. It
implies that India is rich in natural resources but due to lack of capital and
technology, these resources have not been tapped. Resources should be
properly utilized to transform them into finished industrial products. The
British people took India’s cheap raw-materials for producing industrial
goods in their country. India was used as a market for their industrial
products. So India fought with poverty and England gained during
industrial revolution. Hence industrialisation plays important role for
proper utilisation of resources.

8. Alleviation of Poverty and Unemployment:

Poverty and unemployment can be eradicated quickly through rapid
industrialisation. It has occurred in industrially advanced countries like
Japan. The slow growth of industrial sector is responsible for widespread
poverty and mass unemployment. So with fast growth of industrial
sector, surplus labour from villages can be put into use in industry.

9. Main Sector of Economic Development:

Industry is viewed as leading sector to economic development. We can
have economies of scale by applying advanced technology and division of
labour and scientific management. So production and employment will
increase rapidly. This will bring economic growth and capital formation.

10. Fast Growth of National and Per Capita Income:

Industrial development helps in the rapid growth of national and per
capita income. The history of economic development of advanced
countries shows that there is a close relation between the level of
industrial development and the level of national and per capita income.
For instance, the share of industrial sector to national income was 26%
and the per capita income in year 2000 was 36,240 dollar in USA.

The share of agriculture in the same year was only 2%. In Japan, the share
of industrial sector in her GDP was 36% and her per capita income was
36210 dollar. In India due to industrialisation, the contribution of
industrial sector to GDP has gone upto 28.5% in 2000-01 and per capita
income has risen to Rs. 16,486 in 2000.

11. Sign of Higher Standard of Living and Social Change:

A country cannot produce goods and services of high quality in order to
attain decent living standard without the progress of industrial sector.
Is industrialization good for the economy?
Industrialization is the process by which an economy moves from primarily agrarian
production to mass-produced, technologically advanced goods and services. This
phase is characterized by exponential leaps in productivity, shifts from rural to urban
labor, and increased standards of living. By typical measurements, such as income per
capita or labor productivity, industrialization can be considered the most important
economic development in human history.

The major industrial shifts in Western economies occurred during the Industrial
Revolution of the 18th and 19th centuries. Economic historians tend to point to four
significant national industrializations: the original industrialization in Great Britain
between 1760 and 1860; the industrialization of the United States from 1790 until
1870; the unmatched industrial gains in Japan between the 1880s and 1970; and the
industrialization of China from 1960 until contemporary times.

Economic Growth
There are few known methods of generating real economic growth. The first is trade
specialization, by which a laborer is better able to perform an activity through
education, training, and insight. Specialization tends to occur naturally as actors look
to improve their gains from trade.

The second known method is through improved capital goods; better tools lead to
more productivity per labor hour. For example, an 18-wheeler can transport goods
over a distance far more efficiently than a man with a bicycle and backpack.

The last method of improving productivity is through the discovery of previously

unutilized resources. Examples of this method include the discovery of oil wells in the
1850s or the invention of the Internet.

When more goods can be produced more quickly, the costs of acquiring those goods
declines. Declining real costs make it easier for individuals and families to purchase
those goods. This increases the standard of living. Without increases in productivity,
most families would be priced out of owning refrigerators, automobiles, computers,
TVs, electricity, running water, or a myriad of other goods.

Industrialization and Growth

According to estimates from the Federal Reserve branch in Minneapolis, human
productivity and corresponding standards of living were essentially unchanged from
the beginning of the agricultural age around 8000 - 5000 B.C. until 1750 A.D. That all
started to change in Great Britain in 1760. Average income and population levels
began an unprecedented, sustained increase. GDP per capita, which had been fixed
for thousands of years, grew dramatically with the emergence of the modern capitalist
economy.

Economic historian Deirdre McCloskey, writing in the Cambridge University Press in

2004, argued that industrialization was "certainly the most important event in the
history of humanity since the domestication of animals and plants, perhaps the most
important since the invention of language." Not all historians agree about the spark
that ignited the Industrial Revolution. Most economists point to the changes in legal
and cultural foundations in Great Britain that allowed free trade and gave
entrepreneurs the room and incentives to take risks, innovate, and profit.

Progression of the Industrial Revolution

Throughout this period, marginal productivity rose dramatically through the
development of better capital goods, such as the steam engine, and the mastery of
new production techniques, such as the assembly line. Relatively more goods were
produced in relatively less time. More and better food supported population growth
and fought malnutrition. More time was left for education, innovation, and
recreation. Average real incomes rose dramatically, which only increased the
demand for better goods and services.

Mactan Export Processing Zone 1

The Mactan Export Processing Zone (MEPZ) is a 120-hectare industrial estate located at Lapu-
Lapu City. It started out with 8 companies in 1986. Twenty-four years later, MEPZ 1 has 148
locators. This growth reflects the fast-paced economic development that is happening in Lapu-
lapu City. The Mactan Export Processing Zone is an industrial tax-free zone. Factories in MEPZ
1 deliver world-class products to the United States, the European Economic Community and
Japan. Such products include watches, semiconductors, electrical equipment, garments and
precious jewelry.

Mactan Export Processing Zone 2

Mactan Export Zone 2 (MEZ2) is a successful partnership between the
Government and Acoland, a member of Aboitiz group of companies. Acoland is
developing and operating the zone under the Build-Operate-Transfer scheme
(BOT) for the landowner, Mactan Cebu International Airport Authority
(MCIAA). MEZ2 is regulated by the Philippine Economic Zone Authority.
MEZ 2 is a total of 63 hectares of level land and is located in Lapu-lapu City.
Cebu Light Industrial Park (CLIP)
The Cebu Light Industrial park is a 70 hectare world class industrial estate. CLIP benefits from the
substantial experience and expertise of its major owner, Science Park of the Philippines, Inc.
(SPPI), one of the country’s leading industrial estate developers. CLIP is a 10-minute drive from
the Mactan Cebu International Airport.

MACTAN
Mactan or Maktan[citation needed] is a densely populated island located a few kilometres (~1 mile)
from Cebu Island in the Philippines. The island is part of Cebu Province and it is divided
into Lapu-Lapu City and the municipality of Cordova. The island is separated from Cebu by
the Mactan Channel which is crossed by two bridges: the Marcelo Fernan Bridge and
the Mactan-Mandaue Bridge. The island covers some 65 square kilometres (25 sq mi) and is
home to some 470,000 people,[1] making it the nation's most densely populated island. Along
with Olango Island Group, the isles are administered as 1 city and a municipality covering 75.25
square kilometres (29.05 sq mi).
Mactan-Cebu International Airport is located on the island.

The island was already a thriving settlement before it was colonized by Spain in the 16th
century. Portuguese explorer Ferdinand Magellan arrived on the island in 1521 and became
involved in warfare among the kingdoms, only to be killed in battle by the warriors of Datu Lapu-
Lapu, the sovereign in the island. However, oral tradition also dictates that the island where
the Battle of Mactan might have taken place in is Poro Island in the northeast instead.[citation
needed]
The oral tradition is backed by recent[when?] archaeological evidence of such a battle taking
place in Poro island during the 16th century.[citation needed]
By 1730[citation needed], the Catholic Augustinian friars established the town of Opon. It was later
renamed as the city of Lapu-Lapu by means of the Republic Act 3134, signed by Pres. Carlos P.
Garcia on June 17, 1961. Congressman Manuel A. Zosa, the representative of the Sixth District
of Cebu, sponsored the Bill converting the former municipality of Opon into the present day City
of Lapu-Lapu.[2]

Economy
Apart from the airport, today the island is known for its industrial factories, which are some of the
most successful industrial ventures in the Philippines. Many of them are located at the
Mactan Export Processing Zone (MEPZ), an industrial tax-free zone opened in 1979 that
includes over 35 business ventures, about 50 percent of which are Japanese-owned.
Also important to the island is its high-class tourism industry and the production of furniture, as
well as guitars, ukuleles and other musical instruments.

Tourist attractions
Being one of the major tourist islands of Cebu, Mactan Island boasts of a diverse collection of
tourist spots and attractions. Being a coral island, Mactan offers some of the best diving,
snorkeling, island hopping, jet ski, sailing and cultural activities of any island in the Philippines.
The Mactan newtown: An
enabler of growth
Mactan, Cebu—Tourism has been a significant contributor to the bustling
economy of Cebu, owing to the different attractions that have endeared tourists to
the province.
From the historical sites, carnivalesque festivals, to the beach resorts, the shopping,
and the nightlife, it comes as no surprise that Cebu is home to the country’s second
busiest airport, with local and foreign tourists flocking to the Queen City of the
South every year.

In Lapu Lapu City alone, tourism plays a key role as it does not only shore up the
city’s coffers via tax revenues, but also generates quality jobs, and stimulates the
local economy.
In fact, the top taxpayers in this “Historic Resort City” are the luxury resorts
dotting the shores of Mactan, according to Lapu-Lapu City tourism chief Hembler
Mendoza.

In an interview with Inquirer Property in Mactan, Mendoza explained that Lapu

Lapu City is a leisure destination in Cebu where they have a myriad of offerings,
foremost of which are the different beach resorts, ranging from the most exclusive
to the more affordable ones. The city also serves as jump off point to surrounding
islands.
“It’s all about leisure activities here—anything that has to do with sun, sand and
sea,” Mendoza said.

“We have a number of sea -based recreational activities—you can rent a boat, ride
the banana boat, go parasailing or do other things. We have 11 dive sites here.
We’re getting the right positioning in terms of being tourist destination—we have
the fun and leisure component,” Mendoza explained.
And Lapu Lapu City is indeed getting a fair share of the tourism revenues of the
province, considering that of the more than 15,000 rooms available in Cebu, the
resort city accounts for about 5,000 rooms or a third of the accommodations,
according to Mendoza.

Many of the rooms available at Lapu Lapu City, however, are mostly those in the
luxury beach resorts

Significant enabler

Mendoza said they don’t expect any slowdown in the domestic and international
tourist arrivals this year. They, in fact, also anticipate an influx of Chinese tourists
on the back of the renewed ties between the Philippines and China.

But what they are anticipating to contribute significantly to the tourism industry of
Lapu Lapu City, according to Mendoza, is the completion of the 30-hectare The
Mactan Newtown, Megaworld Corp.’s first foray in Central Visayas.
“It’s the first time that we have a development of this scale here. It’s a city within a
city and when it is completed, or even just half operational, it will have a huge
contribution to Lapu Lapu City. It will offer a complete package,” Mendoza said.
“The entry of Megaworld here will allow more people to generate income in terms
of (enabling) livelihood or the small businesses. They (offered opportunities) to
alleviate poverty. They will also provide the people living nearby a chance to have
a better perspective of the different kind of lifestyle that Megaworld will bring to
Lapu Lapu,” he said.

Mendoza pointed out that the good thing about The Mactan Newtown is the fact
that it allows the public to experience what a Megaworld lifestyle is all about,
without necessarily sacrificing on safety and security.
For instance, the Mactan Alfresco, which hosts homegrown restaurants, is open to
the public. It has become a venue of many activities and events regularly hosted by
Megaworld.
“The Mactan Newtown is very welcoming. People go here and they have a chance
to know what’s new. There are also different events being held here. You’d
immediately feel welcome—it’s a totally different ambience and service,” he said.

Community influencer
The impact of The Mactan Newtown on the local community alone is expected to
have a domino effect and is seen to leave a positive mark over the long term.
Easily, Megaworld is becoming an influencer in the host community, with the
different opportunities it offers to the residents of Lapu Lapu City.
Also, the different activities being held at The Mactan Newtown, as it is, are
already boosting the already booming tourism industry in this part of Cebu.
More so, when all the plans fall in place, which include the construction of a mall
and the improvement of the beach area.

“Right now, The Mactan Newtown is also one of the drivers of tourism here as
they actively collaborate with the locals, associations and non government
organizations. They are working as part of the community that is seeking to boost
arrivals here with the different activities they offer,” he added.
The Mactan Newtown is a masterplanned community with its own beachfront,
reportedly the first of its kind in the country. It offers top-grade office sites, retail
and commercial centers, upscale residential developments, hotels, and a reputable
academic institution.
Several companies already have offices at The Mactan Newtown including
Manulife, The Results Companies, Enfra USA, and Concentrix. Residential
projects include 8 Newtown Boulevard and One Manchester Place, among others.

Lapu-Lapu: The Place That Put

the Philippines on the World
Map
Deeply connected to its past but looking positively to its future, Lapu-Lapu City is poised to
become the next hotspot for business and tourism in Cebu Province
In the past, the city of Lapu-Lapu is known as the place where local chieftain—the city’s
namesake, Lapu-Lapu—defeated and killed Portuguese explorer Ferdinand Magellan, putting on
hold Spain’s ambition to colonize the Philippine islands for another 40 or so years.

Today, the city is known for quite different reasons. Although much of the natural beauty of
Mactan Island, where Lapu-Lapu City is located, has been retained over the centuries, it looks
that the place is looking very optimistically into the future.

Lamudi Philippines has put together five reasons why Lapu-Lapu City is the next business and
tourism hotspot in Cebu Province and the Central Visayas Region, and the exciting future that
awaits the city.

1. It is the Home to the Country’s Second Busiest

Airport
For years the Mactan-Cebu International Airport, which is under the jurisdiction of Lapu-Lapu
City, has been Central Visayas’ gateway to the rest of the Philippines. However, this airport,
which handled 7.78 million passengers in 2015, is also fast becoming Cebu’s gateway to the rest
of the world.

Regular scheduled flights operate from the Mactan airport to other major cities in Asia, such as
Kuala Lumpur, Hong Kong, Singapore, Seoul, and Dubai. But just recently flag carrier Philippine
Airlines has started operating daily nonstop flights from the airport to Los Angeles, a testament to
Lapu-Lapu City’s—and indeed the rest of Cebu Province’s—position as a favorite Philippine
destination by foreign visitors.

To keep up with increasing passenger number, the Mactan airport is currently undergoing a major
upgrade. Construction of the airport’s Terminal 2 is on track for a June 2018 delivery, according
to GMR-Megawide Cebu Airport Corp. in an article published in SunStar Cebu. The new
terminal will serve all the airport’s international flights and will have an area of about 45,000
sqm, which can be expanded further in a succeeding development phase. The old terminal,
meanwhile, is currently being refurbished and will eventually handle all domestic flights.
2. It Is Central Visayas’ Major Tourism Driver
An article published in The Freeman cited data from the Department of Tourism (DOT), which
showed that tourist arrivals in Central Visayas reached 3.5 million for the first 10 months of
2015. According to the DOT, Cebu Province as a whole accounted for 64% and 84% of total
domestic and foreign arrivals, respectively, to Central Visayas. This amounts to approximately
2.5 million tourists during the 10-month period. In addition, Lapu-Lapu City lodged majority of
foreign tourists to the province, while Cebu City registered most of local visitors.

So what makes Lapu-Lapu City popular to tourists? According to Hembler Mendoza, the city’s
chief tourism officer, aside from an international airport, Lapu-Lapu City is also home to at least
11 marine sanctuaries, bird and other wildlife sanctuaries, white-sand beaches, high-end hotels
and resorts, and world-class dive sites. The city also offers leisure attractions not found in other
parts of Cebu Province, such as sunrise tours aboard a yacht and flight adventures, not to mention
that there are 79 hospitality establishments in the city (and one on Olango Island) offering
approximately 5,000 room inventories.

3. Its Competitiveness Ranking Improving

Lapu-Lapu is also the only highly urbanized city in Cebu Province whose competitiveness
ranking has improved, according to the National Competitiveness Council (NCC). From the 23rd
place in 2015, Lapu-Lapu City moved up to the 21st spot among all highly urbanized cities in the
Philippines, while its overall ranking when all Philippine cities are considered surged to 39th in
2016 from the 70th position in 2015.

According to the NCC, the categories in which Lapu-Lapu City excels include presence of
investment promotions unit, availability of utilities, and compliance to national directives to
LGUs.

4. It Has a Buoyant Local Economy

Where else in Cebu Province will you find a diverse range of businesses, where BPO offices sit
close to high-end hotels and beach resorts? Lapu-Lapu City offers these. In fact, the city
government reported in 2015 that the number of business establishments in the city surged to
approximately 12,000 in 2014, compared to about 7,000 logged in 2010, according to a report
published in The Freeman.

In addition, the local government reported that the city’s revenue surged 50% to Php1.4 billion,
from Php927 million in 2010. Lapu-Lapu City’s mayor was quoted saying: “The sharp rise, she
said, is the result of the taxes paid by companies doing business in the city because of its rosy
economic prospects.”

5. It Has Impeccable Transport Infrastructure

Aside from the Mactan airport, road travel within Lapu-Lapu City and the whole Mactan Island is
quick and easy. Major thoroughfares encircle the entire periphery of island, while it is also
connected to Mandaue in mainland Cebu via two bridges: Osmeña Bridge and Marcelo Fernan
Bridge. And to ease traffic congestion on these two bridges, especially during rush hour, a third
bridge is now being proposed, this time will connect the town of Cordova south of Lapu-Lapu
City to Cebu City on the mainland.