What Is a Newly Industrialized Country? (NIC)
A newly industrialized country (NIC) is a term used by political scientists and economists to describe a country whose level of economic development ranks it somewhere between developing and highly developed 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."
- A newly industrialized country (NIC) is one whose economic development is between developing and highly developed classifications.
- The most significant sign that a country is evolving into a NIC is substantial growth in gross domestic product, even if that growth falls short of developed nations.
- Which countries should be included on a list of existing NICs is open to some debate among experts and economists.
- Highly developed countries might find opportunities, such as outsourcing, in newly industrialized countries.
Understanding Newly Industrialized Country
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.
A NIC is part of a socioeconomic class that has recently made advances 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.
Transition Signs from Third World to Newly Industrialized Country
A primary indication of a country's transition to a NIC is substantial growth in the gross domestic product (GDP), even if it falls behind developed nations. Often, increases in average income and the standard of living are markers of the transition from a developing country to a NIC. Government structures are usually more stable with lower levels of corruption and less violent shifts of power between officials. Though the changes are significant, outpacing those of similar developing nations, they often lack the standards set by most developed countries.
Relations Between NICs and Highly Developed Nations
Developed countries may see opportunities in the growing stability of a newly industrialized country. These opportunities could lead to additional outsourcing by companies to facilities within NICs. These movements may lower 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 in surrounding industries.
Since there is no exact qualification or definition for a 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.
In a 2014 United Nations report called the World Economic Situations and Prospects, states that all nations are categorized into one of three classifications for analytical reasons. These categories are developed economies, economies in transition, and developing economies.