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Examine the key obstacles faced by developing countries in their industrial sectors

Examine the key obstacles faced by developing countries in their industrial sectors.

Answers

Abdullahi
1. Lack of adequate financial markets

Savings are necessary to facilitate physical capital formation which is in return vital for industrialization and lack of developed financial markets in less developing countries constitute an embedment to industrial development.

2. limited availability of credit

Many developing countries experience a shortage of industrial credit especially for long term projects. This makes it difficult to finance some critical industrial project for example purchase of machines.

3. Shortage of energy

This can constitute a significant obstacle to industrial development especially where energy sources such as electricity are expensive and supply is low or frequently interrupted.

4. Lack of skilled labour

Developing countries have an abundance of unskilled labour. While industries may use unskilled labour in other production process, they also require a certain level of skilled manpower in order to be effective. Skilled labour may include welders and repair specialists.

5. Lack of entrepreneurial skills

Entrepreneurship is the risk taking and organizing factor of production. This factor of production plays an important role in industrialization process but is often in scarce supply in developing countries.

6. Inadequate development of infrastructural facilities

The infrastructural facilities in many developing countries such as roads are either inadequately developed or are in a state of despair. This factor has considerably increased the cost of business in these countries and has therefore reduced the viability of many projects in the industrial sector.
Dullayo answered the question on July 26, 2018 at 14:01

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