Capital-intensive industrialisation
Topic: Industrial Policy, Public Sector, MSMEs and Disinvestment · NCERT: Beyond NCERT
Meaning
Capital-intensive industrialisation is industrial growth that relies mainly on machines and capital. It uses few workers for each unit of output. Heavy industries such as steel, machine tools and power plants are typical. It matters because a country with plenty of labour but little capital can grow its output this way without creating many jobs.
Example
After Independence, India's Second Plan followed the Mahalanobis strategy, which put heavy industry first. This built a base of steel and capital goods. It also left a legacy of industry that creates few jobs, and that legacy is one reason India still has a jobs problem today.
Don't confuse with
- Labour-intensive industrialisation: this uses more workers per unit of capital, as in textiles and footwear. It suits countries with plenty of labour.
- Capital goods industry: this is a type of industry, one that makes machines used to make other goods. Capital-intensive describes how production is done, meaning a lot of capital for each worker.
Related concepts
- Industrial policy
- Capital goods industry
- Commanding heights
- Private sector
- Public sector reservation
- Nationalisation