Heavy Industry Defined

Heavy Industry Defined

Heavy industry refers to a type of enterprise which generally involves a high cost of capital (capital intensive), high barriers to entry and low transportability. The term “heavy” refers to the fact that the items produced by “heavy industry” were products such as iron, coal, petroleum, ships, etc. Today, the reference also refers to industries which disturb the environment in the form of pollution, deforestation, etc.

Break heavy industry

Heavy industry generally involves bulky and heavy products or bulky and heavy equipment and installations (such as heavy equipment, large machine tools and huge buildings); or complex or numerous processes. Due to these factors, heavy industry involves a higher capital intensity than light industry. Heavy industry is also often more strongly cyclical in terms of investment and employment.

Transportation and construction, along with their upstream manufacturing supply activities, represented most of the heavy industries of the industrial era, as well as some capital-intensive manufacturing activities. Traditional examples of the industrial revolution in the early 20th century included steel making, artillery production, locomotive construction, machine tool construction, and the heaviest types of mining. When the chemical and electrical industries developed, they involved elements of both heavy and light industry, which was soon also true for the automotive and aeronautical industries. Shipbuilding in heavy industry has become the norm, as steel has replaced wood in modern shipbuilding. Large systems are often characteristic of heavy industry, such as the construction of skyscrapers and large dams after WWII, and the manufacture / deployment of large rockets and giant wind turbines in the 21st century .

Another characteristic of heavy industry is that it most often sells its products to other industrial customers, rather than to the final consumer. Heavy industries tend to be part of the supply chain for other products. As a result, their inventories often recover at the start of an economic recovery and are often the first to benefit from increased demand.

Heavy industry in Asia

The economies of many East Asian countries are based on heavy industry. Many of these Japanese and Korean companies are manufacturers of aerospace products and defense contractors. Examples include Fuji Heavy Industries in Japan and Hyundai Rotem in Korea, a joint project of Hyundai Heavy Industries and Daewoo Heavy Industries.

In the 20th century, Asian communist states often focused on heavy industry as an area of ​​significant investment in their planned economies. This decision was motivated by the fear of not maintaining military parity with foreign powers. For example, the manic industrialization of the Soviet Union in the 1930s, with the emphasis on heavy industry, sought to boost its ability to produce trucks, tanks, artillery, planes, and warships to a level that would make the country a great power.

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