1. Development Part 2: How does a country become more developed?

2. Three Models to answer this…
1. Rostow’s Model for Development
2. Self-Sufficiency or Balanced Growth Model
3. Nolan’s Stages of Growth
Rostow’s Model

3. Rostow’s Developmental Model AKA: Take-off model
The Theory
Not yet started process of development, lots of agriculture jobs
1- Traditional Society
Elite group initiates new technologies & infrastructure, will stimulate more productivity
2- Preconditions for “Take-off”
Rapid Growth in a limited number of activities
3- The “Take-Off”
Modern Technology diffuses to the other industries, workers become more skilled
4- The Drive to Maturity
Economy shifts from heavy industry to consumer goods
5- Age of Mass Consumption

4. Rostow’s Stage 1 Traditional Society
Majority of workforce involved in primary sector of economy
Most practice subsistence farming
Trade involves farmers & their agricultural products
Mass Production NOT developed

5. Rostow’s Stage 2 Transitional Phase “Pre-conditions to take off” phase
Material conditions improve
EX: Transportation infrastructure
Entrepreneurs see money making opportunities
Economy shifts from primary to secondary activities

6. Rostow’s Stage 3 Take-off Stage
More companies involved in manufacturing sectors of economy
Farmers move from subsistence to commercial agriculture
Growth occurs primarily in urban areas
Growth is only in a FEW industries

7. Rostow’s Stage 4 Drive to Maturity
Technology diffuses to all other areas of manufacturing

8. Rostow’s Stage 5 Age of Mass Consumption
Workers highly skilled in their profession
Productivity, earnings & savings are at all time highs
Society as a whole has shifted from secondary to tertiary sectors
Manufacturing still occurring but is focused on consumer goods

9. Critics of Rostow’s Model
Sub-Sahara Africa hasn’t grown through this model
Resource distribution around the world is not equal so there’s a lack of investment in many areas
Arabian Peninsula developed through oil but Zambia hasn’t been able to do same with copper

10. Self-Sufficiency or Balanced Growth Model
A country should spread investment as equally as possible across all sectors of economy & all regions
Pace of development may be modest but system is fair because residents share the benefits of development
Protects new industry with high tariffs on imported goods, fixes quotas on imported goods, requires licenses for legal importers
The government controls the developmental process

11. Self-Sufficiency or Balanced Growth Model-Problems
Inefficiency
Companies protected from international competition do not feel pressure to keep up with new technologies or improve production
Large Bureaucracy
Complex administrative system encouraged abuse & corruption

12. Nolan’s Stages of Growth
Describes individual companies’ adaption of technology to be competitive in the economy
1. Initiation Stage- Technology used sparingly & primarily for data processing
2. Contagion Stage- Technology begins to spread (contagious diffusion)
3. Control Stage- Management frustrated with use of technology because employees don’t know how to use it
4. Integration Stage- Practical use of technology
5. Data Administration Stage- Computers used for collection & storage of data
6. Maturity Stage- New technology implemented & used to beat competitors