Industrialization

STEM Education System, Industrialization and Industry 4.0


An interesting link on STEM and industrialization
https://www.brookings.edu/wp-content/uploads/2016/06/thehiddenstemeconomy610.pdf

It is generally accepted that industrialization and STEM education are strongly correlated. Many industries rely on strong education in technical and scientific subjects. Without this knowledge it is not possible to design new devices, machines, tools.

Some rich countries and rich companies have relied to "import" technical specialists and scientists from all over the world, attracting them with higher wages and more opportunities than in their home land. This resulted the fact that with abundance of foreign talent, those countries didn't invest enough effort and finance, to "breed" and graduate local STEM students.

Importing foreign specialists is a decent short term strategy, but as global competitors rise in their homeland, with equal pay and equal opportunities, many return home. This already happens in micro-processors where most of the manufacturing is done in Taiwan, and generically in East Asia. And specialists move there en masse.

By not having local technical specialists they soon will be short of enough people to advance progress in a number of areas. Using the past riches they still attract people, but as soon as these companies lose the top spot in technology, the most talented people will leave for new challenges to work with more advanced technologies.

There are mouthpieces for "Industry 4.0" and STEM, but in fact the education system is diluted with "Common Core" curricula, "SAT Tests" and various other initiatives to weak STEM education itself. That will lead to the current leading countries lose positions and money to more STEM focused education systems, especially Asia and Russia.

I am curious to see the next few years.

Strategies for industrialization: Export promotion


The are several keywords:
Export-oriented industrialization
export led industrialization
export-led growth

While import substitution is a necessity for sovereign economies, it can create a number of issues in market dynamics. By itself import substitution is not the most efficient way to strengthen an economy,. It needs to be combined to a strong export policy, not of raw resources, but of manufactured goods.
Prime examples of this are East Asian countries: Japan, South Korea, Taiwan and China.
The export-oriented industrialization allows goods, built with import substitution policies, to be exported abroad. This relieves the market of over production.
Export led industrialization, by combining both import substitution and push for export, leads to massive industrialization. These policies increase growth, trade balances and and many other benefits.