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 the developing and First World classifications. These countries have moved away from an agriculture-based economy and into a more industrialized, urban economy. They are also known 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 particular socioeconomic class that has recently made advanced in the area of industrialization. This economic shift is accompanied by greater economic stability within the nation 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 indication of a country's transition to an NIC is substantial growth in gross domestic product (GDP), 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 are often lag 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 laws and regulations surrounding industry may not yet be fully established.

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 are typically included as NICs are China (specifically Hong Kong), India, Singapore, Taiwan and Turkey. Others may include Brazil, Mexico, South Africa and Thailand.

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