Theories of Industrial Modernization and Development: A Review

An ISR Economic growth & performance study

This book reviews theory, research, and methods of analyzing industrial-economic modernization and development – a very large field of study.

It covers general social structural, cultural, and behavioural aspects of industrial modernization, the creation and growth of individual enterprises, and developments in technical-production systems, markets, and consumption/savings/investment.

Among other things, the latest edition contains much new material on growth and performance in present-day advanced industrial economies.

“An admirable source of reference or starting point for research. Having identified the main areas of study, there are many numbered references appended to each chapter. A lot has been put into the book and researchers will find that much time may be saved by using it.” (British Book News)




1. Theories of Industrial Modernization and Development

Introduction and overview* The sociology of industrial modernization* Other-societal influences: political-economic and diffusionist models* Geographical theories* Cultural and personality influences* Historical studies* Economic studies* Modern manufacturing and investment: national and international studies of growth and performance*

2. Industrial Organization and Enterprise Development in Modern Societies

Introduction* Theories of organizational development: an overview*Structural differentiation and functional specialization* Organizational integration* Industrial organization and technological development*

3. The Sociology of Industrial Organization and Development: Evolutionary and Comparative Perspectives

Modern industrial organization and evolution* Pre-modern economies* Mercantilist systems* Oriental despotism* Primitive capitalism* Positive and negative factors* Summary and conclusion*

4. Industrial Modernization and Markets

Introduction and overview*Markets in modern societies* Primitive-traditional markets and exchange*

5. The Modernization of Management and Employment Relations

Evolutionary perspectives* Management and family enterprise* Management and political enterprise* Management, trade unions, and wage determination in modern societies*

6. Industrial Organization in Modern Western Societies: Cross-National Studies

Introduction and overview* Industrial organization, differentiation, and management* Trade unions and collective bargaining* Family enterprise in modern industry* Variations in the political and legal environment* Industry, education, and the professions* Cross-cultural variations in attitudes, motives, and behaviour*

7. Advanced Industrial Economies: International Differences in Growth and Performance

Introduction* Trends in global competitiveness* National advantages in advanced manufacturing* Economic advantages* Political-legal environmental advantages* Managerial advantages* Employment and labour market advantages* Capital and business finance market advantages* Educational and training advantages*


Print book

Third revised edition 2011

ISBN 9780906321492

102 two-column pages


Price £74.95 including free postal delivery


E-book price £15.39 (British pounds 15.39)

E-book ISBN 9780906321676

Get the book kobo  Get this e-book from Kobo

Get the book Google  Get this e-book from Google

get the bok b&n  Get this e-book from Amazon

Get the book Amazon  Get this e-book from Barnes & Noble

Sample passages

Historical explanations essentially deal with the influence of earlier on later or of traditional on more modern economic activities and organizations.

Sociologists have long criticized historical accounts of economic change for lacking a systematic social framework of analysis. For their part, historians often consider broad sociological models as too abstract or remote from actual events to be of much use.

However, both sociological studies of present-day economic development and historical studies of the Industrial Revolution agree that certain key social factors have facilitated growth and performance.

Commonly identified causes of the Industrial Revolution in Britain include the enclosure movement and other land tenure reforms that substantially increased agricultural output from the 16th century onwards.   With agricultural modernization, there was large-scale migration of labour from the land to urban-based manufacturing and commerce. In turn, the concentration of the population in large urban centres further facilitated industrial-commercial growth.

A system of independent nuclear families with free choice of spouse and small, eco-reckoned kinship structures has existed in England at least since Anglo-Saxon times. Around the world, such systems are associated with relatively high levels of occupational and geographical mobility and the growth of economic markets of various kinds.

Various other socio-cultural factors facilitated the transition from economic traditionality to modernity in Britain.

There was an absence of rigid or closed social classes. The large indigenous middle-class was a major source of entrepreneurship. Meanwhile, the system of primogeniture impelled the younger sons of wealthy families to make their own economic way in the world.

The grammar schools provided an advanced system of nationwide education prior to the Industrial Revolution. The printing and publishing trades were established early on; and numerous voluntary associations encouraged science, the arts etc.

Over the centuries, there also had been extensive immigration and importation of beneficial foreign inventions, institutions, and ideas and knowledge into the country.

Finally, the Protestant Reformation, the dissolution of the monasteries, and the Parliamentary Revolution of the 17th-century fundamentally modernized other major aspects of socio-cultural life in England with generally positive effects on industry and commerce… (page 11)

 Three broad sets of economic factors facilitating growth are:

· satisfactory supplies of the factors of production;

· efficiency in organizing/converting productive resources into finished products and in distributing the products to consumers;   and

· buoyant final market demand for goods and services… (page 12)

  Technological development is a major contributor to business growth and performance in all sectors of the economy. Technological development affects industrial organization – and industrial organization and development affects the introduction and utilization of new technologies.

Industrial technical-product innovation has various business, economic, and wider social aspects to it. There is a considerable literature on the subject… (page 37)

  Modern industry and commerce is highly differentiated from other societal activities.

High levels of growth and performance correlate with high levels of economic sub-system differentiation in societies. Both internally and externally, modern industrial economies feature large degrees of supplier independence – at occupational, enterprise, and industry level.   This is a key distinguishing characteristic.

The most familiar and visible features of the Industrial Revolution in the 18th century were the advances in technology and the establishment of factories in towns. Sociologically speaking however, the emergence of a structurally differentiated functionally specialized and autonomous economic system in society was the most significant aspect of the revolution.

Not only do families, churches, and polities shed their traditional production etc. functions with modernization. Authorities in general also lose control over markets and prices. In other words, there are new differentiated, functionally specialized, and autonomous commercial as well as industrial production arrangements.

As the extent of the economic universe (or the size of the market) increases, the general mode of economic integration will change. Association, contract, and free market price systems form the basis of modern industrial-commercial relations – rather than familial-marital status and heredity, political power, coercion, or traditional feudal and religious obligations etc.

In Sir Henry Maine’s terms, industrial-commercial modernization involves an evolutionary transition from Status to Contract. In Talcott Parsons’ terms, value orientations, role definitions, and action orientations such as universalism, performance orientation, and functional specificity displace particularism/personalism, ascription, and functional diffuseness.

Changes in value systems in the direction of greater secularity and inclusiveness typically take place with industrial modernization.

These and other developments in production, allocation, and the wider environment substantially increase economic growth and performance all around.

Growing differentiation of production structures and increased universalism in exchange necessarily entails the disappearance of traditional social institutional limitations on output. The removal of protectionist tariffs and other geo-political barriers to commerce increases trade and output all around. Meanwhile, the appointment of personnel on ability (rather than family or political connection, age, sex, or race) increases plant-level efficiency and productivity. So does the replacement of traditional status-based systems and state control by wage-contract employment.

In Britain and other countries, there was rapid economic progress from the late 17th century onwards as various traditional negative influences on economic life were removed. Old guild restrictions were swept away – or simply bypassed by entrepreneurs. As mercantilist etc. systems of state economic ownership and control withered away, other dysfunctional authoritarian interventions in social life disappeared… (pages 59-60)

  In the course of the Industrial Revolution, specialist producers and distributors emerged. Contracts, money, and wage labour almost completely replaced traditional feudal (etc.) dues and obligations in kind. Mercantilist price- and wage-fixing by national political authorities also decayed.

As independent entrepreneurs took over on the supply side, household consumer influence grew on the demand side. Markets in capital, land, and labour emerged as integrated market price systems for consumer goods and services developed.

Finally, as free enterprise and trade grew in economies, there were marketizing-type changes elsewhere in societies. Quasi-commercial norms became increasingly evident in everything from competitive democratic politics, through free choice of mate in small, mobile, ego-reckoned family structures, to freedom of religion and association/contract generally… (page 64)

All ancient, non-market methods of determining wages (the price of labour services) are likely to break down with industrial modernization and development.

In the Middle Ages, attempting to establish an objectively fair or just price for labour and other goods and services was a favourite exercise of academic intellectuals. Because the issue involved value judgements, there was no satisfactory scientific basis for settling it.Nonetheless, echoes of this old debate have continued right up to the present day.

In a book entitled Equitable Payment, Elliot Jaques argued that there is and ought to be a connection between the amount of prescription/discretion involved in performing a job and its level of remuneration.  

According to Jaques, the longer an employee’s time-span of responsibility (i.e. the longer the time elapsing from the allocation of a job or task to an employee and the evaluation of its results by management) the higher the wage payment is and should be.

However, in the real world, only slight correlations exist between pay and so-called time-spans of responsibility (discretion, distance from manual work). Wage differences fundamentally reflect labour supply, demand, and productivity differences.Even if some wages do relate to levels of discretion or responsibility at work, this still will not make them equitable. This is because the concept of equitable payment is a prescriptive not a descriptive or scientific one.

The same applies to pseudo-scientific schemes for national wage and job evaluation or equal pay for work of equal value.

All such schemes are essentially ideological throwbacks to pre-modern times. If ever implemented, the schemes would effectively destroy the modern labour market and employment system. Politics would intrude into employment relationships at every level. The rights of employers and employees to freely bargain over wages would disappear. Basic functional economic criteria such as labour supply and demand, enterprise profitability, employee productivity, and cost of living factors would no longer feature in pay determination. On top of this, there would be major dysfunctional consequences for the rest of the economy and society… (pages 70-71)

Mobility is a major feature and facilitating factor in industrial modernization and development. Substantial geographical and occupational movement of persons is a basic precondition for industrializing traditional economies. Mobility features in organizational decentralization, technological spin offs, and the creation of new independent enterprises in competition with old. The inter-organizational movement of scientific, technological, and managerial personnel is a major factor in diffusing new industrial technologies, products, information, and management techniques etc.

Organizations do require a certain minimum level of loyalty and commitment on the part of employees. Substantial personnel turnover is disruptive and expensive to firms in personnel replacement/retraining and other respects. In some countries, mobility in the form of movement of executives from larger to smaller companies is relatively common. This may be because of the importance to managers of personally exercising administrative authority – or being leaders/directors. Particularly in Scandinavia, high prestige attaches to occupying senior administrative positions as such. This prompts substantial movement of executives from large to smaller organizations despite the fact that such moves often entail reductions in salary… (page 86)

There is a correlation between levels of educational investment, gross domestic product, and per capital incomes in countries. However, investment in education stems from as well as contributes to economic growth and prosperity. Simply spending more on education and training will not in itself generate wealth. Industrial-economic growth and performance is a function of a very wide range of factors – of which educated and trained human resources are only one.

Historically, persons with relatively little formal education/training have created some of the best companies around. Often, outsiders far removed from established centres of learning and production make the most radical, useful, and enduring innovations.

In any country, the authorities can artificially bloat the education sector by pumping in more subsidies. It is possible to increase the number of persons with higher formal qualifications overnight simply by raising the official school leaving age, restricting teaching and learning to narrow curricula, and/or dumbing-down examinations to make them easier to pass.

Many universities, schools, and professional training schemes are prestigious, expensive, and difficult to enter. Often, the graduates command top jobs and premium salaries. However, the actual wider economic utility of these institutions and courses may be low.

Education and training may be out of date or impart too narrow a range of knowledge and skills. There may be lack of effective integration between disciplines, between academia and industry, and between research, development, and production functions in organizations (etc.)… (page 100)