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Labor intensity
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Labor intensity
Labor intensity is the relative proportion of labor (compared to capital) used in any given process. Its inverse is capital intensity. Labor intensity is sometimes associated with agrarianism, while capital intensity is sometimes associated with industrialism.
Labor intensity has been declining since the onset of the Industrial Revolution in the late 1700s, while its inverse, capital intensity, has increased nearly exponentially[citation needed] since the latter half of the 20th century.
A labor-intensive industry requires large amounts of manual labor to produce its goods or services. In such industries, labor costs are more of a concern than capital costs. Labor intensity is measured by its proportion[clarification needed] to the amount of capital to produce goods or services. The higher the labor cost, the more labor intense is the business. Labor cost can vary because businesses can add or subtract workers based on business needs. When it comes to controlling expenses, labor intensive businesses have an advantage over those that are capital intensive and require a large investment in capital equipment, such as the automobile industry. When it comes to include economy of scale, labor intensive industries deal with many challenges:[clarification needed] they cannot pay individual workers less by hiring more workers.
A labor-intensive industry can be particularly vulnerable to high inflation, because workers may demand pay increases, as the inflation lowers the value of their earnings.
Before the Industrial Revolution, the major part of the workforce was employed in agriculture. Producing food was very labor-intensive. Advances in technology have often increased worker productivity, so that some industries are less labor-intensive, but some industries, such as mining and agriculture, are still quite labor-intensive.
Some labor-intensive sectors:
For underdeveloped and developing economies, a labor-intensive industry structure can be a better option than a capital-intensive one for quick economic development. For countries which are not wealthy and generate low levels of income, labor-intensive industries can bring economic growth and prosperity. In most cases, these low income countries suffer from lack of capital but have an abundant labor force, such as some African countries. The use of such an abundant labor force may lead to industrial growth.
China has a large workforce, and manufacturing industries contribute about 35 per cent to the country's gross domestic product. The country has also become one of the world's leading manufacturing bases, with leading suppliers of products such as household electric appliances, garments, toys, shoes and light industrial products.
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Labor intensity
Labor intensity is the relative proportion of labor (compared to capital) used in any given process. Its inverse is capital intensity. Labor intensity is sometimes associated with agrarianism, while capital intensity is sometimes associated with industrialism.
Labor intensity has been declining since the onset of the Industrial Revolution in the late 1700s, while its inverse, capital intensity, has increased nearly exponentially[citation needed] since the latter half of the 20th century.
A labor-intensive industry requires large amounts of manual labor to produce its goods or services. In such industries, labor costs are more of a concern than capital costs. Labor intensity is measured by its proportion[clarification needed] to the amount of capital to produce goods or services. The higher the labor cost, the more labor intense is the business. Labor cost can vary because businesses can add or subtract workers based on business needs. When it comes to controlling expenses, labor intensive businesses have an advantage over those that are capital intensive and require a large investment in capital equipment, such as the automobile industry. When it comes to include economy of scale, labor intensive industries deal with many challenges:[clarification needed] they cannot pay individual workers less by hiring more workers.
A labor-intensive industry can be particularly vulnerable to high inflation, because workers may demand pay increases, as the inflation lowers the value of their earnings.
Before the Industrial Revolution, the major part of the workforce was employed in agriculture. Producing food was very labor-intensive. Advances in technology have often increased worker productivity, so that some industries are less labor-intensive, but some industries, such as mining and agriculture, are still quite labor-intensive.
Some labor-intensive sectors:
For underdeveloped and developing economies, a labor-intensive industry structure can be a better option than a capital-intensive one for quick economic development. For countries which are not wealthy and generate low levels of income, labor-intensive industries can bring economic growth and prosperity. In most cases, these low income countries suffer from lack of capital but have an abundant labor force, such as some African countries. The use of such an abundant labor force may lead to industrial growth.
China has a large workforce, and manufacturing industries contribute about 35 per cent to the country's gross domestic product. The country has also become one of the world's leading manufacturing bases, with leading suppliers of products such as household electric appliances, garments, toys, shoes and light industrial products.