What is heavy industry?
High capital costs, entrance obstacles, and limited transportability characterize heavy industry. The phrase “heavy” alludes to “heavy industry,” producing iron, coal, oil, ships, etc. Today, the term includes polluting, deforesting, etc. industries.
Understanding Heavy Industry
These industrial firms may entail heavy items, equipment, facilities, or sophisticated procedures. Heavy industry has higher capital intensity than light industry due to many variables. Investment and employment in heavy industries are frequently more cyclical. This industry produces bulky, untransportable goods.
How this Industry Works
Transportation, construction, and their upstream manufacturing supply sectors comprised the most heavy industry throughout the industrial period, along with some capital-intensive manufacturing. Traditional examples from the Industrial Revolution to the early 20th century include steelmaking, cannon manufacture, locomotive construction, machine tool fabrication, and heavy mining.
The development of the chemical and electrical industries incorporated components of both heavy and light industries, which later extended to the automobile and aircraft industries. Steel supplanted wood in contemporary shipbuilding, leading to heavy-industry shipbuilding. Large systems are standard in heavy industries, such as constructing skyscrapers and dams after WWII and producing rockets and wind turbines in the 21st century.
The heavy industry sells primarily to other industrial clients, not consumers. Heavy industries are often involved in the supply chain of other items. Due to this, their stocks generally rise during economic upturns and benefit from increased demand.
Heavy Industry in Asia
Many East Asian economies rely on heavy industries. Some Japanese and Korean enterprises are aircraft manufacturers and defense contractors. Examples include Fuji Heavy Industries in Japan and Hyundai Rotem in Korea, a joint venture between Hyundai and Daewoo Heavy Industries.
In the 20th century, Asian communist regimes invested heavily in heavy industries for their planned economies. Fear of losing military parity with foreign nations drove this choice. The Soviet Union’s 1930s industrialization focused on heavy industries to create trucks, tanks, artillery, aircraft, and battleships, aiming to become a great power.
Conclusion
- This industry encompasses large-scale projects, vast equipment, extensive acreage, high costs, and significant entry barriers.
- Light industry occurs in factories or small facilities, costs less, and has lower access barriers.
- Heavy industry is cyclical, profiting from economic upturns by investing in costly, long-term projects like buildings, aircraft, and the military.
- Heavy industry sells to other industrial clients rather than end customers, making it part of other goods’ supply chains.
