Manufacturing industry refers to those industries which involve in the manufacturing and processing of items and indulge in either creation of new commodities or in value addition. The manufacturing industry accounts for a significant share of the industrial sector in developed countries. The final products can either serve as a finished good for sale to customers or as intermediate goods used in the production process.
Evolution of the manufacturing industry:
Manufacturing industries came into being with the occurrence of technological and socio-economic transformations in the Western countries in the 18th-19th century. This was widely known as industrial revolution. It began in Britain and replaced the labor intensive textile production with mechanization and use of fuels.
Working of manufacturing industry:
Manufacturing industries are the chief wealth producing sectors of an economy. These industries use various technologies and methods widely known as manufacturing process management. Manufacturing industries are broadly categorized into engineering industries, construction industries, electronics industries, chemical industries, energy industries, textile industries, food and beverage industries, metalworking industries, plastic industries, transport and telecommunication industries.
Manufacturing industries are important for an economy as they employ a huge share of the labor force and produce materials required by sectors of strategic importance such as national infrastructure and defense. However, not all manufacturing industries are beneficial to the nation as some of them generate negative externalities with huge social costs. The cost of letting such industries flourish may even exceed the benefits generated by them.
World Manufacturing Industry
Owing to the emerging technologies world wide, the world manufacturing industry has geared up and has incorporated several new technologies within it's purview. Economists consider the World manufacturing industry as a sector which generates a lot of wealth. Generating employment, introducing latest techniques, real earnings from shipments etc., have put the world manufacturing industry in a favorable position.
With the implementation of the concept of eco friendly environment, world manufacturing industry has taken several measures to ensure that the manufacturing industries worldwide abide by the eco friendly norms. World manufacturing industry also plays an important role in the defense of a country. By manufacturing aircrafts which play a vital role in the country's defense, the aerospace manufacturing industry acts as a shield. Other industries in the manufacturing sector manufactures products which are indispensable in our daily lives. With regard to the GDP or gross domestic product, world manufacturing industry contributes to the global economy as well as the global GDP.
World manufacturing industry and type of economy:
Manufacturing industry in a capitalist economy indulge in mass production and make them available to the customers by earning profits.
Manufacturing industry in a collectivist economy is guided by a state run agency for making available the manufactured goods depending on the requirement.
Manufacturing industry in a modern economy operates under regulations framed by the Government.