BUSINESS PRINCIPLES (SEC 701)

Professor: Bernie Cabling

Critical Thinking Activity 1

Student: Kehinde Obaleye

Student ID: 301328978

Question: 3.
Countries like Canada that have a high standard of living are referred to as
industrialized nations. Countries with a low standard of living and quality of life
are called developing countries. (Terms formerly used were underdeveloped or
less-developed countries.) What factors prevent developing nations from
becoming industrialized nations?
INTRODUNCTION
Industrialization is a process of economic and social change. It is one that shifts the centres of
economic activity onto the focus of work, wages and incomes.
Industrialization is the major component that determines the state of development in any

nation and government plays a key role in providing basic infrastructures and policy that promote

industrialization.

Industrialization is driven by a combination of factors, including initial economic conditions,

factor endowments, as well as country characteristics such as demographic structure and

geography.

There are 4 major factor affecting industrialization in Canada as a develop nation which are

land, capital, labour and entrepreneurship.

LAND

Land as a factor of production includes the natural resources used to create a good or service.

These can be agriculture, natural resources and commercial purpose. Industries requires a

good amount of land for maximum productivity.

CAPITAL

Capital as a factor of production refers to capital goods, or man-made resources, such as tools

and infrastructure, used in the production of a good or service.

Industrialization often involves the establishment of new industries, which require significant

initial investments in land, buildings, machinery, and technology. Capital is essential to finance
these ventures. Due to increase in interest rate and rise in inflation it has really affect the cash

flow because investors are not motivated to borrow money into the business.

LABOUR

"When we think about the factors of production, the one we are most focused on is labour," says

John Traynor, chief investment officer of People's United Advisors.

Labour consists of the people who are responsible for the creation of goods and services (from

beginning to end) and the effort they put forth.

The quality of the workforce available will also determine the success of an industrial. A nation

like Canada is short of human force which affect the industrial growth and impact of the Nation.

ENTREPRENEURSHIP.

"Entrepreneurial activity is the engine of innovation that brings new ways of organizing land,

capital and labor to produce new goods and services," says Luis Portes, professor of economics

at Montclair State University

Entrepreneurs combine all the other factors of production to conceptualize, create, and

produce the product or service. Every Nations need entrepreneur for rapid growth and

development of the industrial and stabilization of the economics.

Reference

Ross, S. (2023). Why are the factors of production important to economic growth? Investopedia.

https://www.investopedia.com/ask/answers/040715/why-are-factors-production-

important-economic-growth.asp

Fernando, J. (2023). 4 factors of production explained with examples. Investopedia.

https://www.investopedia.com/terms/f/factors-production.asp#toc-entrepreneurship-as-a-

factor