Newly Industrialized Countries
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The category of newly industrialized country (NIC), newly industrialized economy (NIE) or middle-income country is a
socioeconomic Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interac ...
classification Classification is the activity of assigning objects to some pre-existing classes or categories. This is distinct from the task of establishing the classes themselves (for example through cluster analysis). Examples include diagnostic tests, identif ...
applied to several countries around the world by
political scientist Political science is the scientific study of politics. It is a social science dealing with systems of governance and Power (social and political), power, and the analysis of political activities, political philosophy, political thought, polit ...
s and
economist An economist is a professional and practitioner in the social sciences, social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this ...
s. They represent a subset of
developing countries A developing country is a sovereign state with a less-developed Secondary sector of the economy, industrial base and a lower Human Development Index (HDI) relative to developed countries. However, this definition is not universally agreed upon. ...
whose economic growth is much higher than that of other developing countries; and where the social consequences of
industrialisation Industrialisation ( UK) or industrialization ( US) 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 reorganisation of an economy for th ...
, such as
urbanization Urbanization (or urbanisation in British English) is the population shift from Rural area, rural to urban areas, the corresponding decrease in the proportion of people living in rural areas, and the ways in which societies adapt to this change. ...
, are reorganizing society.


Definition

NICs are countries whose economies have not yet reached a
developed country A developed country, or advanced country, is a sovereign state that has a high quality of life, developed economy, and advanced technological infrastructure relative to other less industrialized nations. Most commonly, the criteria for eval ...
'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 In economics, economic growth is an increase in the quantity and quality of the economic goods and Service (economics), services that a society Production (economics), produces. It can be measured as the increase in the inflation-adjusted Outp ...
(usually
export An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is a ...
-oriented). Incipient or ongoing
industrialization Industrialisation (British English, UK) American and British English spelling differences, or industrialization (American English, US) is the period of social and economic change that transforms a human group from an agrarian society into an i ...
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 The Four Asian Tigers ( the Four Asian Dragons or Four Little Dragons in Chinese and Korean) are the developed Asian economies of Hong Kong, Singapore, South Korea, and Taiwan. Between the early 1950s and 1990s, they underwent rapid industrializ ...
of
Taiwan Taiwan, officially the Republic of China (ROC), is a country in East Asia. The main geography of Taiwan, island of Taiwan, also known as ''Formosa'', lies between the East China Sea, East and South China Seas in the northwestern Pacific Ocea ...
,
Singapore Singapore, officially the Republic of Singapore, is an island country and city-state in Southeast Asia. The country's territory comprises one main island, 63 satellite islands and islets, and one outlying islet. It is about one degree ...
,
Hong Kong Hong Kong)., Legally Hong Kong, China in international treaties and organizations. is a special administrative region of China. With 7.5 million residents in a territory, Hong Kong is the fourth most densely populated region in the wor ...
and
South Korea South Korea, officially the Republic of Korea (ROK), is a country in East Asia. It constitutes the southern half of the Korea, Korean Peninsula and borders North Korea along the Korean Demilitarized Zone, with the Yellow Sea to the west and t ...
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 A developed country, or advanced country, is a sovereign state that has a high quality of life, developed economy, and advanced technological infrastructure relative to other less industrialized nations. Most commonly, the criteria for eval ...
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 This is a list of countries by gross national income per capita in 2023 at nominal values, according to the Atlas method, an indicator of income developed by the World Bank. The GNI per capita is the dollar value of a country's final income in ...
, 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 A developed country, or advanced country, is a sovereign state that has a high quality of life, developed economy, and advanced technological infrastructure relative to other less industrialized nations. Most commonly, the criteria for eval ...
as those of
Western Europe Western Europe is the western region of Europe. The region's extent varies depending on context. The concept of "the West" appeared in Europe in juxtaposition to "the East" and originally applied to the Western half of the ancient Mediterranean ...
as well as
Canada Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, making it the world's List of coun ...
,
Japan Japan is an island country in East Asia. Located in the Pacific Ocean off the northeast coast of the Asia, Asian mainland, it is bordered on the west by the Sea of Japan and extends from the Sea of Okhotsk in the north to the East China Sea ...
,
Israel Israel, officially the State of Israel, is a country in West Asia. It Borders of Israel, shares borders with Lebanon to the north, Syria to the north-east, Jordan to the east, Egypt to the south-west, and the Mediterranean Sea to the west. Isr ...
,
Australia Australia, officially the Commonwealth of Australia, is a country comprising mainland Australia, the mainland of the Australia (continent), Australian continent, the island of Tasmania and list of islands of Australia, numerous smaller isl ...
,
New Zealand New Zealand () is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and List of islands of New Zealand, over 600 smaller islands. It is the List of isla ...
and the
United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
. All four countries are classified as
high-income economies A high-income economy is defined by the World Bank as a country with a gross national income per capita of US$14,005 or more in 2023, calculated using the Atlas method. While the term "high-income" is often used interchangeably with " First World" ...
by the
World Bank The World Bank is an international financial institution that provides loans and Grant (money), grants to the governments of Least developed countries, low- and Developing country, middle-income countries for the purposes of economic development ...
and
developed countries A developed country, or advanced country, is a sovereign state that has a high quality of life, developed economy, and advanced technological infrastructure relative to other less industrialized nations. Most commonly, the criteria for eval ...
by the
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...
(IMF) and U.S.
Central Intelligence Agency The Central Intelligence Agency (CIA; ) is a civilian foreign intelligence service of the federal government of the United States tasked with advancing national security through collecting and analyzing intelligence from around the world and ...
(CIA). All of the
Four Asian Tigers The Four Asian Tigers ( the Four Asian Dragons or Four Little Dragons in Chinese and Korean) are the developed Asian economies of Hong Kong, Singapore, South Korea, and Taiwan. Between the early 1950s and 1990s, they underwent rapid industrializ ...
, like Western European countries, have a
Human Development Index The Human Development Index (HDI) is a statistical composite index of life expectancy, Education Index, education (mean years of schooling completed and expected years of schooling upon entering the education system), and per capita income i ...
considered "very high" by the
United Nations The United Nations (UN) is the Earth, global intergovernmental organization established by the signing of the Charter of the United Nations, UN Charter on 26 June 1945 with the stated purpose of maintaining international peace and internationa ...
.


Current

The table below presents the list of countries consistently considered NICs by different authors and experts.
Turkey Turkey, officially the Republic of Türkiye, is a country mainly located in Anatolia in West Asia, with a relatively small part called East Thrace in Southeast Europe. It borders the Black Sea to the north; Georgia (country), Georgia, Armen ...
and
South Africa South Africa, officially the Republic of South Africa (RSA), is the Southern Africa, southernmost country in Africa. Its Provinces of South Africa, nine provinces are bounded to the south by of coastline that stretches along the Atlantic O ...
were classified among the world's 34 developed countries (DCs) by the
CIA World Factbook ''The World Factbook'', also known as the ''CIA World Factbook'', is a reference resource produced by the United States' Central Intelligence Agency (CIA) with almanac-style information about the countries of the world. The official print ve ...
in 2008. Turkey became a founding member of the
OECD The Organisation for Economic Co-operation and Development (OECD; , OCDE) is an international organization, intergovernmental organization with 38 member countries, founded in 1961 to stimulate economic progress and international trade, wor ...
in 1961 and
Mexico Mexico, officially the United Mexican States, is a country in North America. It is the northernmost country in Latin America, and borders the United States to the north, and Guatemala and Belize to the southeast; while having maritime boundar ...
joined in 1994. The
G8+5 The Group of Eight + Five (G8+5) was an international group that consisted of the leaders of the heads of government from the G8 nations (Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States), plus the heads of ...
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. With population of China, a population exceeding 1.4 billion, it is the list of countries by population (United Nations), second-most populous country after ...
,
India India, officially the Republic of India, is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area; the List of countries by population (United Nations), most populous country since ...
,
Mexico Mexico, officially the United Mexican States, is a country in North America. It is the northernmost country in Latin America, and borders the United States to the north, and Guatemala and Belize to the southeast; while having maritime boundar ...
,
South Africa South Africa, officially the Republic of South Africa (RSA), is the Southern Africa, southernmost country in Africa. Its Provinces of South Africa, nine provinces are bounded to the south by of coastline that stretches along the Atlantic O ...
and
Brazil Brazil, officially the Federative Republic of Brazil, is the largest country in South America. It is the world's List of countries and dependencies by area, fifth-largest country by area and the List of countries and dependencies by population ...
. The members of the G20 include Brazil, China, India,
Indonesia Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania, between the Indian Ocean, Indian and Pacific Ocean, Pacific oceans. Comprising over List of islands of Indonesia, 17,000 islands, including Sumatra, ...
, Mexico, South Africa and Turkey. 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 1.4 billion people as of May 2024) means that
per capita income Per capita income (PCI) or average income measures the average income earned per person in a given area (city, region, country, etc.) in a specified year. In many countries, per capita income is determined using regular population surveys, such ...
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 a measure of the price of specific goods in different countries and is used to compare the absolute purchasing power of the countries' currency, currencies. PPP is effectively the ratio of the price of a market bask ...
(PPP), this takes into account the lower costs of living in each newly industrialized country. Nominal 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 The Group of Eight + Five (G8+5) was an international group that consisted of the leaders of the heads of government from the G8 nations (Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States), plus the heads of ...
.


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 do not consider a NIC. This is the case of countries such as
Brunei Brunei, officially Brunei Darussalam, is a country in Southeast Asia, situated on the northern coast of the island of Borneo. Apart from its coastline on the South China Sea, it is completely surrounded by the Malaysian state of Sarawak, with ...
,
Mongolia Mongolia is a landlocked country in East Asia, bordered by Russia to the north and China to the south and southeast. It covers an area of , with a population of 3.5 million, making it the world's List of countries and dependencies by po ...
and
Vietnam Vietnam, officially the Socialist Republic of Vietnam (SRV), is a country at the eastern edge of mainland Southeast Asia, with an area of about and a population of over 100 million, making it the world's List of countries and depende ...
.


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 A developed country, or advanced country, is a sovereign state that has a high quality of life, developed economy, and advanced technological infrastructure relative to other less industrialized nations. Most commonly, the criteria for eval ...
, where the
cost of living The cost of living is the cost of maintaining a certain standard of living for an individual or a household. Changes in the cost of living over time can be measured in a cost-of-living index. Cost of living calculations are also used to compare t ...
is higher, and
trade union A trade union (British English) or labor union (American English), often simply referred to as a union, is an organization of workers whose purpose is to maintain or improve the conditions of their employment, such as attaining better wages ...
s and other organizations have more political sway. This comparative advantage is often criticized by advocates of the fair trade 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. South Africa is a NIC with 34% of population unemployed and poor. 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.


See also

*
Emerging market An emerging market (or an emerging country or an emerging economy) is a market that has some characteristics of a developed market, but does not fully meet its standards. This includes markets that may become developed markets in the future or we ...
* Flying geese paradigm *
Global North and Global South Global North and Global South are terms that denote a method of grouping countries based on their defining characteristics with regard to socioeconomics and Global politics, politics. According to UN Trade and Development (UNCTAD), the Global S ...
*
Industrialisation Industrialisation ( UK) or industrialization ( US) 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 reorganisation of an economy for th ...
*
Mechanization Mechanization (or mechanisation) is the process of changing from working largely or exclusively by hand or with animals to doing that work with machinery. In an early engineering text, a machine is defined as follows: In every fields, mechan ...
*
Mass production Mass production, also known as mass production, series production, series manufacture, or continuous production, is the production of substantial amounts of standardized products in a constant flow, including and especially on assembly lines ...
* Science in newly industrialized countries *
Second World The Second World was one of the " Three Worlds" formed by the global political landscape of the Cold War, as it grouped together those countries that were aligned with the Eastern Bloc of the Soviet Union and allies in Warsaw Pact. This grouping ...
;Groupings * BRIC /
MINT Mint or The Mint may refer to: Plants * Lamiaceae, the mint family ** ''Mentha'', the genus of plants commonly known as "mint" Coins and collectibles * Mint (facility), a facility for manufacturing coins * Mint condition, a state of like-new ...
/ Next Eleven *
BRICS BRICS is an intergovernmental organization comprising ten countriesBrazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates. The idea of a BRICS-like group can be traced back to Russian foreign ...
* CIVETS *
G8+5 The Group of Eight + Five (G8+5) was an international group that consisted of the leaders of the heads of government from the G8 nations (Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States), plus the heads of ...
* G20 *
G20 developing nations The G20 developing nations (and, occasionally, the G21, G23 or G20+) is a trade bloc, bloc of developing country, developing nations established on 20 August 2003. Distinct and separate from the G20 major economies, the group emerged at the 5th ...


References

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