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1. Developing industry constitute a fundamental way of achieving a diversification of the economy. This is especially important in the case of developing countries which are often heavily dependent on one or two primary products. Therefore industrialization will reduce reliance on primary production.
2. The demand for primary products is income inelastic and is therefore not likely to increase proportionally as income rise. However, the demand for industrial products on the other hand is more income elastic thus developing industry is a good long run strategy since world demand for industrial products is likely to increase as income rises.
3. The output for industry is subject to fewer price fluctuations than agricultural outputs, essentially because the demand and supply for industrial output is more price elastic than that of agricultural products.
Industrial production is therefore associated with a money steady income for products.
4. The establishment of export promotion industries especially in labour intensive manufacturing is a good way of generating foreign exchange and strengthening the balance of payment especially in the long run.
5. Industrialization can be an important source of employment that is not seasonal. This is especially the case of small scale labour intensive industries.
6. Industry plays an important role in the economic development of a country by facilitating the development of other sectors through the provision of vital inputs such machinery for the agricultural sector. In addition, industry has backward linkages with sectors such as agriculture by adding value to agricultural output as in the case of food processing.
Dullayo answered the question on May 11, 2018 at 10:58
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