Industrialization, in economics, condition marked by an increase in the importance of industry to an economy. The process of industrialization describes the transition from an agricultural society to one based on industry. During the process of industrialization, per capita income (level of income per person) rises and productivity levels increase.

Modern industrialization is often dated as having its origins in the Industrial Revolution, which began in Great Britain in the 18th century and spread to other parts of Europe and North America in the early 19th century. Industrialization had occurred by the end of the 19th century in some southern European countries and in Japan, and during the 20th century, particularly after World War II (1939-1945), in eastern Asia. Today, Japan, the United States, and Great Britain are among the world's major industrialized countries.

The process of industrialization usually includes a movement from rural to urban living and a shift from home to factory production. Increased mechanization in agriculture generally leads to increased agricultural productivity and enough food for large urban populations. Agricultural productivity growth is necessary for modern industrial growth to become self-sustaining. Other conditions are also necessary for industrialization to occur, and the next section describes three differing theories on this process that were developed during the 20th century.


Foreign Trade, the exchange of goods and services between nations. Goods can be defined as finished products, as intermediate goods used in producing other goods, or as agricultural products and foodstuffs. International trade enables a nation to specialize in those goods it can produce most cheaply and efficiently. Trade also enables a country to consume more than it would be able to produce if it depended only on its own resources. Finally, trade enlarges the potential market for the goods of a particular economy. Trade has always been the major force behind the economic relations among nations.