What Is a Newly Industrialized Country? (NIC)

What Is a Newly Industrialized Country? (NIC)

Let me explain what a newly industrialized country, or NIC, really means. As someone who's looked into economic classifications, I can tell you it's a term political scientists and economists use for countries whose economic development puts them right between developing and highly developed categories. These nations have shifted away from relying on agriculture and moved toward a more industrialized, urban economy. You might also hear them called newly industrializing economies or advanced developing countries.

Key Takeaways

Here's what you need to know directly: A newly industrialized country is one with economic development between developing and highly developed levels. The biggest sign of a country becoming an NIC is major growth in gross domestic product, even if it's not up to the standards of fully developed nations. Experts debate which countries make the list of current NICs. And highly developed countries often find opportunities like outsourcing in these NICs.

Understanding Newly Industrialized Country

Back in the 1970s and 1980s, countries like Hong Kong, South Korea, Singapore, and Taiwan were prime examples of newly industrialized countries. By the late 2000s, the list expanded to include South Africa, Mexico, Brazil, China, India, Malaysia, the Philippines, Thailand, and Turkey. I should note that economists and political scientists don't always agree on these classifications.

An NIC falls into a socioeconomic class that's recently advanced in industrialization. This shift brings greater economic stability to the nation, though the stabilization process might still be incomplete or just starting out.

Fast Fact

Just so you know, Hong Kong, Singapore, South Korea, and Taiwan are NICs collectively referred to as the Four Asian Tigers.

Transition Signs from Third World to Newly Industrialized Country

The main sign of a country's transition to NIC status is substantial growth in gross domestic product, even if it doesn't match developed nations. You'll often see increases in average income and living standards as markers of this change from a developing country to an NIC. Government structures tend to be more stable, with less corruption and fewer violent power shifts. These changes are notable and outpace those in similar developing nations, but they still fall short of the standards in most developed countries.

Relations Between NICs and Highly Developed Nations

Developed countries spot opportunities in the growing stability of newly industrialized countries. This can lead to more outsourcing by companies to facilities in NICs. Such moves cut labor costs for those outsourcing companies, with less risk than going to less stable nations. While this boosts the labor force in the NIC, it can create complications because the government might not have fully set up laws and regulations for the surrounding industries.

Real-World Example

Since there's no strict definition for an NIC, the list of current ones is up for debate. Based on the move from agricultural to industrial economies and recent improvements in living standards, experts typically include China (especially Hong Kong), India, Singapore, Taiwan, and Turkey as NICs. Others might add Brazil, Mexico, South Africa, and Thailand.

In a 2014 United Nations report titled World Economic Situations and Prospects, all nations are grouped into three categories for analysis: developed economies, economies in transition, and developing economies.