Deindustrialization is the process of industrial productivity and output decreasing within a country due to a shift in economic structures, technology, or government policies In the past, industrialization was hailed as the answer to economic growth, offering employment and increased economic prosperity. However, in recent decades, many countries have seen a decrease in industrial productivity as companies move their operations overseas in search of cheaper labor and other cost savings measures.
The first example of modern-day deindustrialization is the collapse of the textile industry in the United Kingdom. The industry was long renowned for its production of high-quality clothing, but in the late 1970s and early 1980s, competition from foreign rivals and a high unemployment rate saw the industry spiral downwards. The demise of the British textile industry ushered in a wave of deindustrialization across the country, leaving many once-prosperous towns and cities in physical and economic decay.
Second, the closure of production plants belonging to the auto industry in the United States is another prominent example of deindustrialization. In the early 1980s, US automobile manufacturers faced stiff competition from the newly emerged Japanese auto industry, leading to the closure of numerous US production plants, resulting in massive job losses. These losses were compounded by the rise of automation and other cost-saving measures implemented by the auto industry, further shrinking the sector.
Third, the UK coal industry is another example of deindustrialization. By the mid-1980s, the industry had already been in a state of decline following the oil crisis of the 1970s. In 1988, the government announced the closure of 21 coal mines, leaving tens of thousands of workers jobless and severely damaging local economies. This was the final blow that led to the complete shuttering of the industry and signaled the end of the British coal-mining industry.
Fourth, the traditional fishing industry of Norway provides a further example of deindustrialization. Hard-won environmental regulations, restrictions on fish catches, and the introduction of more efficient fishing techniques like trawling saw production and employment in the sector drastically reduce over the course of the 20th century. This has left many coastal communities in Norway facing economic devastation, with the traditional fishing industry no longer generating the jobs and revenue it once did.
Finally, the US steel industry is another example of deindustrialization. In the early 1980s, US steelmakers faced stiff competition from the newly emerged Chinese steel industry, resulting in the closure of several US steel production plants. Further losses were incurred by the rise of cheaper steel substitutes, such as aluminum and plastic, which businesses opted for in order to save on costs. This resulted in a steep decline in the US steel industry, with production and jobs both drastically reducing.
Despite its often devastating effects, deindustrialization is sometimes necessary to facilitate economic growth. The shift away from traditional industries can provide new opportunities, increase efficiency, and often lead to greater economic prosperity in the long term.