Industry-Industrial Growth

Industrialization is the period of social and economic growth that transforms a human group from an agrarian civilization to an industrial society. This needs considerable economic reform in order to enable production. Industrialization has traditionally been associated with the expansion of polluting industries that rely heavily on fossil fuels; however, with a growing focus on sustainable development and green industrial Industrialization is increasingly marked by technical leapfrogging, with direct investment in more sophisticated, cleaner technology, as a result of regulatory actions.

What do you understand about Industrial Growth?

A growth sector, in particular, is a segment of the economy that increases faster than the rest. Industrial growth industries usually are new or pioneering sectors that never existed earlier. Local companies are growing at a higher pace significantly with the higher demand for goods and services. For example, the IT business is expanding, with products that have become runaway blockbusters with customers, resulting in multibillion-dollar stock market values for IT companies.

Understanding the High-Growth Industries

Many factors contribute to the emergence of a thriving industry.

One such is the introduction of new, creative and innovative technologies, which might encourage startups and entrepreneurs to create new industry-related goods and services. Given the ever-changing nature of technology, the promise of exponential future growth is the justification for investors to invest in the technologies.

During the first half of this decade, the smartphone industry that combined numerous breakthrough technologies into a single mobile phone grew rapidly. Virtual reality (VR), machine learning and artificial intelligence are two contemporary examples of this method. A virtual reality (VR) experience is a fully immersive, computer-generated scenario, which may be used to imitate a realistic situation. It has uses in a variety of sectors, ranging from gaming headsets to driving simulators and medical school instruction.

Characteristics of the Growing Industry

Growth sectors are characterised by companies that have consistently and quickly increased sales statistics, as well as an influx of capital. This is usually followed by unwanted media attention. Stocks in high-growth industries are more volatile and hazardous. Often, investors will take on additional risks in exchange for the possibility of making a large reward.

Risks connected with developing sectors include high capital burn rates, lack of profitability in spite of consumer & investor enthusiasm, bubbles, and technology setbacks that hinder progress.

Relation between Growth Industries and CAGR

To evaluate the current viability and future potential of an investment  several well recognised analysts use the compound annual growth rate. The compound annual growth rate helps to measure an investment’s average annual growth rate over a passage of time period, and it may be used for both rising and non-growing businesses.

To find the compound annual growth rate, analysts had divided the value of an investment at the end of the period by the value which was at the beginning of the period, in order to calculate the industrial growth rate. It then multiplies the result by one, divides it by the duration of the period, and deducts one from the final result.

What are the examples of a Growth Industry?

The Indian industries have generated minimum revenue numbers over a three-year period to register and apply, and become independent industries. Talking about the number, 40% of the growth industry comes from Bengaluru, Mumbai, Hyderabad and Delhi. Where 21% is tech sector, 13% comprises Food, Beverage & Restaurants, 8%, 7% construction & property and 7% is Financial Services companies. 

Industrial Development and Economic Growth

In general, technological advancements have led to periods of economic development. New technologies make work easier, faster, and better, thus increasing a company’s productivity and profitability. Industrialization has many far-reaching benefits in the workplace. Many of the benefits of industrial advancement, as well as their positive economic consequences, are explored here.

Conclusion

India is witnessing a massive industrial growth which has risen to 1.1% in February from 0.7% in January. Experts have asserted industrial production to increase from 3.2% in FY 2020. The industrial growth is a result of demand for new products or services offered by companies in the field. For example, the industry seeing the growth is the technology sector, which has surpassed all levels and led to multibillion-dollar valuation for tech companies in the stock market. .