The U.S. holds the title of "most industrialized nation in the world," although China's economy comes in at a photo-finish second place. The United States has held its position as the strongest economy in the world since 1871, according to International Monetary Fund data.
The 20 most advanced economies in the world represent 81 percent of global wealth. The remaining 172 countries together produce less than 20 percent of all annual worldwide economic value. In contrast, countries with the lowest industrial development garner as little as $246 per person, per year in South Sudan, $339 in Burundi, $342 in Malawi and $425 per person, per year in the Central African Republic.
TL;DR (Too Long; Didn't Read)
All 20 of the top world economies have a healthy industrial or post-industrial sector. The top producers in the list of developed countries include the United States, China, Japan, Germany, the United Kingdom, India, France, Brazil, Italy, Canada, South Korea, Russia, Australia, Spain, Mexico, Indonesia, Turkey, the Netherlands, Saudi Arabia and Switzerland.
What Does the Phrase "First World Countries" Mean?
Use of the phrase "First World Countries" arose during the Cold War era after the end of World War II. Sources vary widely on total combined military and civilian World War II deaths. In total, at least 60 million people lost their lives and millions more had severe, debilitating injuries.
The economy of the United States experienced a post-war boom due to the fact that very few of the battles of World War II affected U.S. soil. In stark contrast, the nations of Europe and those that fell under Russian control after the war had all seen devastating battles and lost large numbers of people, cultural landmarks, factories and entire transportation systems.
Destroyed infrastructure, such as bridges, roads, railroads, airstrips, civic buildings, dams and factories, left many countries with no way to rebuild without blood, sweat, toil and cold hard cash. Ravaged countries got infusions of cash from the Marshall Plan, and affected nations rushed to consolidate control over the former Axis Power nations.
The Cold War: First, Second and Third World Countries
During the postwar era, such severe loss of trust broke out between the United States and Russia that a "cold" war began. Spying and doing everything to stymie one another's efforts to control world resources split the world into two camps: The United States, United Kingdom and France, who topped the First World countries list, and the Second World countries that included Russia and the Warsaw Pact nations.
At the end of World War II, the remaining nations of the world relied on subsistence agriculture, mining, forestry, fishing and animal husbandry. Other than cottage industries, such as making handmade items for personal or household use, transformative industries within a given nation's borders didn't usually belong to the citizens of that nation.
First World nations and Second World nations competed for control over this so-called Third World, which consisted of most of the nations of Africa, all of the nations of the Middle East, as well as the majority of Asia, including China, and Malaysia, India and the Pacific Islands.
Emerging or Third World Economies
An emerging or Third World economy may have a few abundant natural resources. Unfortunately, Third World nations typically lack the industrial infrastructure to process their natural resources within their own borders. Instead, those nations depend on other countries to purchase these raw materials and return the refined and finished products, often at a steep markup.
This difference between the value of the raw resource versus the cost to produce the refined or finished products eventually leads to trade imbalances. As early as the 1950s and 1960s, the economic volatility caused by this raw resource dependence forced countries to industrialize, whether they had sufficient income to do so or not. The result was an economy with a perpetual trade imbalance.
Emerging Economies and Political Instability
Countries with emerging economies may find themselves so dependent on the income from the sale of raw resources that the debt from trade imbalances can topple the national government. The resulting political instability often leads to internecine conflicts, such as civil wars, black marketeering and corruption. Such nations soon lose their investment appeal, which further weakens that nation's political stability.
Industrialized Nation Definition
In contrast, the industrialized nation definition requires a diversified economy with a nationwide industrial base. If one sector of the economy fares poorly in a given year, season or quarter, gains in other sectors prevent economic collapse. Strong, diversified economies create consumer confidence, and confident consumers purchase goods and services commensurate with their personal wealth and national economic well-being.
What Types of Industry Help Strong Economies Develop?
Countries that wish to decrease their dependence on subsistence farming and resource extraction often begin by encouraging cottage industries and building a strong service sector. Cottage industries use mostly family labor to create products such as handmade textiles and home-produced foodstuffs, handmade tools and homemade building products like sun-dried or Raku-fired pottery or home-cured bamboo furniture.
From Amish quilters and jelly makers in the United States to weavers of colorful, heavily embroidered cloth in Guatemala to makers of wood-fired clay bricks in the Phillippines, the products each family would normally reserve for personal and community use pull tourists to an area. Watching these artisans produce traditional crafts serves as a draw in itself, while transporting the colorful, handmade goods back home creates a strong tourism industry.
A Strong Economy Requires a Bustling Manufacturing Sector
Making a truly strong economy requires a bustling manufacturing sector, which can't take place without mechanization, standardization and more than a little automation. Whereas a few people might make enough goods for a single market day, international trade requires vast amounts of goods in order to keep unit prices low enough to justify shipping costs.
Factories don't build themselves, though, especially without capital. Thus, a fully-industrialized nation must have a financial sector, a strong government capable of protecting owners, investors and consumers, and an information and technology sector to make sense of all the data needed to track profits and losses.
Which Factors Block Development?
Among factors blocking industrial development, natural disasters have created economic devastation. For example, Hurricane Maria destroyed the entire electrical grid in Puerto Rico in September 2017. The hurricane damaged the Baxter International plant, causing a national shortage of IV bags that persisted into February 2018.
The 10 deadliest natural disasters of 2018 ranged from an earthquake in Papua, New Guinea, that affected close to 500,000 people in February; flooding and landslides in North Korea, Japan, India and Nigeria; the Fuego volcanic eruption in Guatemala and multiple earthquakes and tsunamis in Indonesia.
A Lack of Education Hinders Local Workers
Besides natural disasters, limited access to education prevents workers from learning the necessary skills to perform available jobs. Instead of using local labor, factory owners must recruit foreign workers or spend extravagant amounts on training and health care. The resulting resentment toward immigrant workers "stealing" jobs leads to lower sales due to boycotts, protests and increased regulation of that industry.
The Need for Infrastructure
Missing infrastructure, such as lack of roads, railroads, airports and shipyards, results in a supply chain that can't keep pace with production and distribution needs. Shortages of schools and hospitals contribute to poor health. Sick, poor and lacking job skills, the population will eventually turn on its government and fellow citizens, creating chaos and further eroding the availability of angel investors.
- Investopedia: The World's Top 20 Economies
- Business Insider: The 28 Poorest Countries in the World
- The National World War Two Museum: Worldwide Deaths in World War Two
- Collins English Dictionary: Industrialized Country Definition
- Business Dictionay: Industry
- United Nations.Org: World Economic and Social Survey, Chapter 2
- The American Prospect: How Neglect of Puerto Rico Sparked a National IV Bag Shortage
- Intelligent Economist: What Is Economic Growth
After earning a B.S. Ed. from Kent State University in 1995, Smith provided educational support in multiple Ohio school districts. Smith has managed nine employees and 86 independent adult care providers at a time. In addition, Smith has assisted two charities with successful 501 (C) 3 applications, serving on the board of one for three years. Currently, Smith serves as an independent Avon representative at Avon Beauty by Laura. Her writing chops include one published novel and close to 1500 articles in various online and offline publications.