Lesson 5: Preparing for industrialization

There is an element of luck in development, but communities can increase their chances of being lucky. Well-managed communities with a thriving agricultural economy are better placed to be lucky: they are likely to have stronger trading links with urban centers, pools of investable capital, processing activities, and basic services. Communities that are plugged into the communications infrastructure will attract outside capital and will be desirable from the standpoint of industrial location. Furthermore, a readiness to use external links to aggressively enter export market, can, if successful, dramatically improve the development picture. An educated workforce, which includes a handful of individuals 24 with technical and managerial skills acquired, for example, through a stint in the military or factory employment, is inviting for rural industry. Good political connections with central or provincial leaders or strong commercial traditions, which have embedded a predisposition toward business activities and helped to develop the nucleus of a regional trading network, are also valuable. Two examples from China can illustrate their significance. Guangdong's leaders were able to influence decisions made by the central government on the policies that permitted Guangdong province to cement economic relations with countries along China's southern rim. The extraordinary growth of the Wenzhou region of Zhejiang province and its dominance in the button-making industry stems from the cultivation of button-making skills and skillful exploitation of trading contacts established by merchants from the Wenzhou area over generations. Similar examples can be used to explain regional development in other South and East Asian countries.