Newly-industrialized country
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The category of newly industrialized country (NIC), newly industrialized economy (NIE) or middle income country is a socioeconomic
classification Classification is a process related to categorization, the process in which ideas and objects are recognized, differentiated and understood. Classification is the grouping of related facts into classes. It may also refer to: Business, organizat ...
applied to several countries around the world by political scientists and economists. They represent a subset of developing countries whose economic growth is much higher than other developing countries; and where the social consequences of
industrialization Industrialisation ( alternatively spelled industrialization) is the period of social and economic change that transforms a human group from an agrarian society into an industrial society. This involves an extensive re-organisation of an econo ...
, such as urbanization, are reorganizing society.


Definition

NICs are countries whose economies have not yet reached a
developed country A developed country (or industrialized country, high-income country, more economically developed country (MEDC), advanced country) is a sovereign state that has a high quality of life, developed economy and advanced technological infrastruct ...
's status but have, in a macroeconomic sense, outpaced their developing counterparts. Such countries are still considered developing nations and only differ from other developing nations in the rate at which an NIC's growth is much higher over a shorter allotted time period compared to other developing nations. Another characterization of NICs is that of countries undergoing rapid
economic growth Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate of ...
(usually export-oriented). Incipient or ongoing
industrialization Industrialisation ( alternatively spelled industrialization) is the period of social and economic change that transforms a human group from an agrarian society into an industrial society. This involves an extensive re-organisation of an econo ...
is an important indicator of an NIC.


Characteristics of newly industrialized countries

Newly industrialized countries can bring about an increase of stabilization in a country's social and economic status, allowing the people living in these nations to begin to experience better living conditions and better lifestyles. Another characteristic that appears in newly industrialized countries is the further development in government structures, such as democracy, the rule of law, and less corruption. Other such examples of a better lifestyle people living in such countries can experience are better transportation, electricity, and better access to water, compared to other developing countries and low infant mortality rate.


Historical context

The term came into use around 1970, when the Four Asian Tigers of Taiwan, Singapore, Hong Kong and South Korea rose to become globally competitive in science, technological innovation and economic prosperity as well as NICs in the 1970s and 1980s, with exceptionally fast industrial growth since the 1960s; all four countries having since graduated into high-tech industrialized developed countries with wealthy high-income economies. There is a clear distinction between these countries and the countries now considered NICs. In particular, the combination of an open political process, high GNI per capita, and a thriving, export-oriented economic policy has shown that these East Asian economic tiger countries have roughly come to a match with developed countries as those of Western Europe as well Canada,
Japan Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...
,
Australia Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...
, New Zealand and the United States. All four countries are classified as
high-income economies A high-income economy is defined by the World Bank as a nation with a gross national income per capita of US$12,696 or more in 2020, calculated using the Atlas method. While the term "high-income" is often used interchangeably with "First World" a ...
by the World Bank and developed countries by the International Monetary Fund (IMF) and U.S. Central Intelligence Agency (CIA). All of the Four Asian Tigers, like Western European countries, have a Human Development Index considered "very high" by the United Nations.


Current

The table below presents the list of countries consistently considered NICs by different authors and experts. Turkey, Brazil and Malaysia are classified as developed countries by the CIA. Turkey was a founding member of the OECD in 1961 and Mexico joined in 1994. The G8+5 group is composed of the original G8 members in addition to
China China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
, India, Mexico, South Africa and Brazil. Note: Green-colored cells indicate highest value or best performance in index, while yellow-colored cells indicate the opposite. For China and India, the immense population of these two countries (each with over 1.3 billion people as of May 2021) means that per capita income will remain low even if either economy surpasses that of the United States in overall GDP. When GDP per capita is calculated according to
purchasing power parity Purchasing power parity (PPP) is the measurement of prices in different countries that uses the prices of specific goods to compare the absolute purchasing power of the countries' currency, currencies. PPP is effectively the ratio of the price of ...
(PPP), this takes into account the lower costs of living in each newly industrialized country. GDP per capita typically is an indicator for living standards in a given country as well. Brazil, China, India, Mexico and South Africa meet annually with the G8 countries to discuss financial topics and climate change, due to their economic importance in today's global market and environmental impact, in a group known as G8+5.


Other

Authors set lists of countries accordingly to different methods of economic analysis. Sometimes a work ascribes NIC status to a country that other authors don't consider a NIC. This is the case of countries such as Argentina, Egypt,
Sri Lanka Sri Lanka (, ; si, ශ්‍රී ලංකා, Śrī Laṅkā, translit-std=ISO (); ta, இலங்கை, Ilaṅkai, translit-std=ISO ()), formerly known as Ceylon and officially the Democratic Socialist Republic of Sri Lanka, is an ...
and Russia.


Criticism

NICs usually benefit from comparatively low wage costs, which translates into lower input prices for suppliers. As a result, it is often easier for producers in NICs to outperform and outproduce factories in developed countries, where the cost of living is higher, and trade unions and other organizations have more political sway. This comparative advantage is often criticized by advocates of the
fair trade Fair trade is an arrangement designed to help producers in developing countries achieve sustainable and equitable trade relationships. The fair trade movement combines the payment of higher prices to exporters with improved social and enviro ...
movement.


Problems

While South Africa is considered wealthy on a wealth-per-capita basis, economic inequality is persistent and extreme poverty remains high in the country. Mexico's economic growth is hampered in some areas by an ongoing drug war. Other NICs face common problems such as widespread corruption and political instability, as well as other circumstances that cause them to face the
middle income trap The middle income trap is an economic development situation in which a country that attains a certain income (due to given advantages) gets stuck at that level. The term was introduced by the World Bank in 2006 and is defined by them as the 'middl ...
.


See also

* Emerging market * Flying geese paradigm * Global North and Global South *
Industrialisation Industrialisation ( alternatively spelled industrialization) is the period of social and economic change that transforms a human group from an agrarian society into an industrial society. This involves an extensive re-organisation of an econo ...
* Mechanization *
Mass production Mass production, also known as flow production or continuous production, is the production of substantial amounts of standardized products in a constant flow, including and especially on assembly lines. Together with job production and batch ...
*
Science in newly industrialized countries Scientific research is concentrated in the developed world, with only a marginal contribution from the rest of the world. Many newly industrialized countries have been trying to establish scientific institutions, but with limited success. There is a ...
* Second World ;Groupings * BRIC / MINT / Next Eleven * BRICS * CIVETS * Emerging and growth-leading economies * G8+5 * G20 * G20 developing nations * VISTA


References

{{Authority control Economic country classifications Industrialisation International development Economic development Industrial history