A:

Industrialization leads to urbanization by creating economic growth and job opportunities that draw people to cities. Urbanization typically begins when a factory or multiple factories are established within a region, thus creating a high demand for factory labor. Other businesses such as building manufacturers, retailers and service providers then follow the factories to meet the product demands of the workers. This creates even more jobs and demands for housing, thus establishing an urban area.

Urbanization Occurs Near Bodies of Water

Throughout the history of human civilization, urbanization patterns have been the strongest near large bodies of water. Initially this was just to meet the water and food needs of large populations. However, since the Industrial Revolution, the trend of urbanization along waterways has continued because large bodies of water are needed to sustain industry. Not only do many businesses require large quantities of water to manufacture products, they also depend on oceans and rivers for the transportation of goods. This is partially why 75% of the world’s largest urban areas are in coastal regions.

Urbanization Continues After Industrialization Occurs

As industrialization creates economic growth, the demand for the improved education and public works agencies that are characteristic of urban areas increases. This demand occurs because businesses looking for new technology to increase productivity require an educated workforce, and pleasant living conditions attract skilled workers to the area.

Once an area is industrialized, the process of urbanization continues for a much longer period of time as the area goes through several phases of economic and social reform. This concept is best illustrated by comparing a city such as Bangkok, located in a lesser-developed country, with an American city such as Los Angeles and a European city such as Berlin. Each city has a progressively higher level of social, environmental and economic prosperity achieved through increased education, government intervention and social reform.

(For related reading, see: What are some of the drawbacks of industrialization?)

RELATED FAQS
  1. What does it mean to be "above water"?

    The term "above water" is used to describe any situation in which the ending or current value of a subject is higher than ... Read Answer >>
  2. How is the cost of living index calculated?

    Discover how calculations for cost of living indexes are made based on the average prices of common goods and services between ... Read Answer >>
  3. How can data assist operations management in increasing efficiency?

    Learn how pork barrel spending provides economic benefits locally but usually results in negative economic consequences on ... Read Answer >>
Related Articles
  1. Insights

    China's Long Road to Urbanization

    China's urbanization rate has a long way to go before the country reaches a level of urbanization on par with that of countries with similar income per capita.
  2. Investing

    Urban Outfitters Wobbles After a Mixed Q4 Report

    Shares of Urban Outfitters (NASDAQ: URBN) fell by as much as 9% in trading Wednesday after the apparel retailer's fourth-quarter report showed that it missed estimates on both the top and bottom ...
  3. Investing

    Urban Misses Low Bar, Shares Continue Downward

    Urban Outfitters’ trendy onesies weren’t enough to offset a brick-and-mortar disaster.
  4. Investing

    Investing In China

    Investment opportunity is huge in China. However, investors should consider the pitfalls, understand the risks and rewards, focus on shareholder-friendly companies and stick to investments they ...
  5. Investing

    Has Urban Outfitters Lost its Way? (URBN)

    Urban Outfitters just made a bold move. Will it pay off?
  6. Investing

    Smart Cities: Companies Profiting from Urban Challenges

    Smart cities are applying technology to manage swelling populations and strained services. See who will benefit most from the trend.
  7. Investing

    Urban Outfitters Stock Drops on Departure of President

    David McCreight opened 60 new stores and grew revenue by over 35% during his six-and-a-half year stint as Anthropologie’s CEO.
  8. Insights

    The World Bank's All-Important World Development Indicators (WDI)

    The World Development Indicators are the world's economic scorecards: they evaluate where nearly every country stands and how far it has yet to go.
  9. Insights

    Can Uber’s Data Transform Cities?

    Uber hopes its data can make cities more efficient.
  10. Investing

    Opportunities In The Emerging Market's Water Crisis

    Water scarcity and increasing demand caused by population growth is one of the most compelling long-term portfolio themes.
RELATED TERMS
  1. Urban Development Act Of 1970

    Legislation through the U.S. Department of Housing and Urban ...
  2. Consumer Price Index - CPI

    The Consumer Price Index examines the weighted average of prices ...
  3. Produced Water

    Produced water is waste water generated during the production ...
  4. Water ETF

    An exchange-traded fund that invests in companies operating in ...
  5. 18-Hour City

    An 18-hour city is a second-tier city with above-average population ...
  6. The City

    The main financial district of London, and one of the world's ...
Hot Definitions
  1. Economies of Scale

    Economies of scale refer to reduced costs per unit that arise from increased total output of a product. For example, a larger ...
  2. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
  3. Leverage

    Leverage results from using borrowed capital as a source of funding when investing to expand the firm's asset base and generate ...
  4. Financial Risk

    Financial risk is the possibility that shareholders will lose money when investing in a company if its cash flow fails to ...
  5. Enterprise Value (EV)

    Enterprise Value (EV) is a measure of a company's total value, often used as a more comprehensive alternative to equity market ...
  6. Relative Strength Index - RSI

    Relative Strength Indicator (RSI) is a technical momentum indicator that compares the magnitude of recent gains to recent ...
Trading Center