What is a 'Newly Industrialized Country - NIC'?

A newly industrialized country is a term used by political scientists and economists to describe a country whose level of economic development ranks it somewhere between the developing and First World classifications. These countries have moved away from an agriculture-based economy and into a more industrialized, urban economy. Experts also know them as "newly industrializing economies" or "advanced developing countries."

BREAKING DOWN 'Newly Industrialized Country - NIC'

In the 1970s and 1980s, examples of newly industrialized countries included Hong Kong, South Korea, Singapore and Taiwan. Examples in the late 2000s included South Africa, Mexico, Brazil, China, India, Malaysia, the Philippines, Thailand and Turkey. Economists and political scientists sometimes disagree over the classification of these countries.

An NIC is part of a socioeconomic class that has recently made advanced in industrialization. Greater economic stability within the nation accompanies this economic shift although this process of stabilization may be incomplete or in a stage of infancy.

Signs of the Transition From Third World to Newly Industrialized Country

A primary sign of a country's transition to an NIC is a substantial growth in gross domestic product, even if it falls behind First World nations. Often, increases in average income and the standard of living are markers of the transition from a Third World country to an NIC. Government structures are often more stable with lower levels of corruption and less violent transitions of power between officials. Though the changes are significant, outpacing those of similar developing nations, they often lack the standards set by most First World nations.

Relations Between Newly Industrialized Nations and First World Countries

First World countries may see opportunity in the growing stability of an NIC. This could lead to additional outsourcing by companies in First World countries to facilities within NICs. This lowers labor costs for outsourcing companies with less risk compared to outsourcing to less stable nations. While this can increase the strength of the labor force within the NIC, complications can occur with the increased demand because the government may not have fully established laws and regulations surrounding industry.

Examples of Newly Industrialized Countries

Since there is no exact qualification or definition for an NIC, the list of existing NICs is open to some debate. Based on the shift among economies from agricultural development to more industrial pursuits and recent improvements in average standards of living, economies that experts typically include as NICs are China (specifically Hong Kong), India, Singapore, Taiwan and Turkey. Others may include Brazil, Mexico, South Africa and Thailand.

RELATED TERMS
  1. Net Interest Cost (NIC)

    Net interest cost is a mathematical formula that an issuer of ...
  2. National Insurance Contributions ...

    National Insurance Contributions are payments made by employees ...
  3. First World

    "First world" is a term that describes industrialized, democratic ...
  4. Third World

    Third World is a phrase commonly used to describe economically ...
  5. Four Asian Tigers

    The Four Asian Tigers refer to the high-growth economies of Hong ...
  6. Country Risk

    Country risk is a term for a set of risks associated with investing ...
Related Articles
  1. Insights

    Could Third World Debt Relief Pay Off?

    Debt is as much a political tool as an economic one. Discover if wholesale debt forgiveness is the answer for developing countries.
  2. Financial Advisor

    These Will Be the World's Top Economies in 2020

    Discover the current economic forces that are anticipated to significantly shift the landscape of the world's most powerful economies over the next decade.
  3. Insights

    Introduction To Asian Financial Markets

    We look at the history of Asia's financial development and how investors can get involved in these growing markets.
  4. Insights

    2016's Most Promising Countries To Invest In

    Learn about four promising countries to consider for investment in 2016 and key statistics indicating growth and expansion in each country.
  5. Insights

    Top Agricultural Producing Countries

    Discover which countries produce the most agricultural products, which export the most and what is being done to increase production.
  6. Insights

    The Unintended Consequences of Outsourcing

    The outsourcing of labor overseas is a natural result of globalization of world markets and the drive for businesses to cut costs in order to maximize profits.
  7. Investing

    Why Country Funds Are So Risky

    High returns come at a price, but country funds may still be a good bet.
  8. Investing

    Slow Growth in China to Affect Asia-Pacific

    As China's growth slows, it will affect different countries in the Asia-Pacific region differently.
  9. Small Business

    5 Best Countries For Starting And Owning A Small Business

    Singapore, New Zealand and Denmark are just some of the most business-friendly countries in the world.
  10. Trading

    Main Factors that Influence Exchange Rates

    The exchange rate is one of the most important determinants of a country's relative level of economic health and can impact your returns.
RELATED FAQS
  1. What economic indicators are most used when forecasting an exchange rate?

    Discover what economic indicators are most widely used to forecast a country’s exchange rate and how various factors influence ... Read Answer >>
  2. How does globalization impact comparative advantage?

    Learn how comparative advantage is becoming increasingly relevant due to globalization and how this has affected both advanced ... Read Answer >>
  3. Globalization and International Investment

    Learn how globalization impacts international investment and transforms economies around the world. Understand the implications ... Read Answer >>
  4. How do national interest rates affect a currency's value and exchange rate?

    Generally, higher interest rates increase the value of a country's currency and lower interest rates tend to be unattractive ... Read Answer >>
  5. How does inflation affect the exchange rate between two nations?

    Countries attempt to balance interest rates and inflation, but the interrelationship between the two is complex and can influence ... Read Answer >>
Trading Center