Do Theories of ‘Late Industrialization’ Explain National Differences in the Institutional and Organizational Characteristics of Contemporary Business? How Do These Ideas Help to Explain Variations in Economic Performance?”

The late industrialization have followed the footsteps of early industrialization, these late comers have borrowed technology and intuitions from early industrializers and adapted them distinctively. This essay will analyse the major differences between early developers and late developers in term of institution and business system over the time. Nations such as Japan, China, Germany, UK and USA are provided as 5 major countires to explain how such patterns have influenced the economic performances of these nations in various ways and why it failed to late comers in late 1990s.

Alexander Gerschenkron’s late industrialization theory has been the most influential in explaining the differences between the early-industrializers (America and UK) and the latecomers (Japan, Germany, China, India and Korea .etc). The late-industrializing countries have evolved as “learners” which they follow a process of catch up whereby they have to try to close the gap by importing technology and adapting to the circumstances of those countries after the World War II. (Gerschenkron, 1962). Gerschenkron argues that the timing of the industrialization of an economy determines its growth rates and patterns, influences the nation’s institutions and organisations. (Gerschenkron, 1962). Another theorist Rostow believed that there is the same specific set of stages that countries will follow to reach maturity no matter where they started, and the only variety would be in speediness of the rates of development. However, Rostow’s notion that nations undergoing the same progressive stage growth through their development using the same processes was criticised for its simplicity and it is somewhat unrealistic. (Marx and Kapital) In addition, Porter argued that all economies go through the same changes in stages of development from factor driven, to creation of management capabilities, to the innovation stage that was dependent on the level of clustering, he was criticised for lack of analysis...