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Early Development vs Late Development

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Can the distinction between 'late' and 'early' industrialization fully explain the origins and long-term competitiveness of national business systems? Rostow (1978) was a theorist who studied the competitiveness of national business systems, and concluded that there were a number of common characteristics of modern economic growth. Modern economic growth is usually accompanied by underlying characteristics such as a rise of the use of technology in production and a shift from agriculture to production. Political, institutional and cultural changes also usually occur alongside economic growth. Rostow's theory was better to suited to Anglo-American economies, and assumes there are definitive, sequential steps in developing economies. The preconditions stage assumes that nations undergo an industrial revolution, with advances in agriculture and food production. In this initial stage, technology is developing and there is plentiful investment. The second stage is the take off stage, where capital accumulation rises sharply, with living standards improving and changes within institutions and the culture. This stage may take several decades to complete. The final stage is the maturity stage, where the economy is developed enough to become a self sustaining process. Porter also provided a framework of how firms and industrial sectors may gain competitive advantage, but he doesn't specify the variations between nations or give enough weight to the international origins of competitive advantage. Porter argues that locational advantages are directly related to trade and foreign direct investments (FDI). Gerschenkron (1962) was one of the first theorists to argue with Rostows theory and suggest an alternative. Gerschenkron's theory was of "early and late industrialisation” and the "degree of backwardness” of an economy. He...

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