Focuses on the export staple and build on it as long as it remains competitive in the large economic system .In some instances strengthening the existing specialization may be more sensible than attempting to diversify the economic base .This theory orients economic developers to their local economy, Local values, politics and wealth.
Here Economic base theory focuses exclusively on external demand as the determinant of regional growth .Internal supply and demand are viewed as relatively insignificant source of income and employment growth ,Other features of the regional economy including its endowment of natural resources ,the rate of capital investment and the quality and quantity of the labor force –are free not addressed .Assume significant production capital implying that there are unemployed resources /capital and labor within the region that may easily be acquired
APPLICATIONS
Developers can try to expand the existing economic base in three ways: Industrial recruitment, facilitate the extension of the export industries already part of the basic sector, Indirectly facilitate export expansion by improving the efficiency of local public infrastructure and services.
Work to ensure adequate supplies of trained labor, Industrial and facilities public infrastructure, affordable housing
There are new extensive margin (alternatively ,emerging future infant industries ) opening up everywhere in the current innervations –intensive global economy .One need only look at the policy statements emanating from the major economies to identify those that are particularly attractive in terms of their characteristics. There are ‘’Battle ground” sectors, with advanced manufacturing typically heading the list.
In a world where comparative advantage in manufactured by government policy ,a country that chooses “laisses faire” is in fact choosing a comparative advantage defined by foreign governments .One might think of a games of musical chairs where the standoffish laissez faire player get the seat left open after all the other players have chosen theirs. What staples theory tells us is that might not be optimal, depending on the specific characteristics of the economy at land –intensive extensive margins
By recognizing that due to interindustry linkages all industries give rise to multiplier effects, therefore the most rapid rate of growth is not necessarily achieved by concentration development efforts solely on the basic sector
CRITICISM –As basic for understanding the reality of the local economic development, economic base theory offers limited insights .In the form of a quantities model, It can be applied for impact analysis and making predictions of economic growth only as long as the structure of the local economy does not change key exports sectors and local economic structure change over time
Arbitrary, division of dividing the regional economy into basic and non basic industries ignores the role of the non basic industries ignores the role of the non basic industry in supporting and stimulating economic growth.
THEORY: Is the critique, revision and summation of past knowledge in the form of general preposition and the fusion of diverse and partial knowledge as general frame works of explanation.
Theory is a distillation of reflection an practice in conceptual language so as to connect with pas knowledge .Globalization and regionalization are overtaking the standard unit of development, the national international institutions and market forces overtake the role of the state, the conventional agents of development .The classic aim of development, modernization or catching up with advanced countries, is in question because modernization is no long an obvious ambition. Moldering no longer seems so attractive in view of ecological problems ,the consequences of technological change and many other problems westernization is no longer seems compelling in a time of revaluing local culture and cultural diversity
The Universalist claims of neo classical economics and structure adjustment policies have under mined the foundation of development studies, the notion that development countries form a special case
Development is a field in flux, with rapid change and turnover of alternatives precisely because of its crisis predicament, development is a high energy field.
w.w.w- sagepub.com/upon- data/29044..nederveen pretre.
COMMENTS ON SUITABILITY OF STEPLES THEORY TO REGIONAL DEVELOPMENT
The staples theory provides an interesting frame work upon which provincial and federal policy can pursue economic development. The staples theory premises that economic advancement from a developing to a developed economy requires leveraging the potential of the supply chain in order to increase innovation, expertise, and thus foot hold in more advanced technologies.
The backward and forward links in the supply chain represent opportunities for innovation, development and growth that have the potential to benefit everyone in the system. The methods, mechanisms, and resource needed to realize this progressive advancement in order to mimic and exporting order to lead.
The competency to synthesize and build upon imported (KSA’s) must be largely home grown. Competitive theory support mimicking international benchmarks and technologies in order to realize international standards and efficiencies but also recognizes that this only supports a follower role in international economic and corporate competition.
The country’s industries must become supportive of internal competition in order for innovation, efficiencies, and competencies to be realized. The extent to which federal and provincial regulatory frameworks protect existing industries from competition can aid the development will likewise determine and advancement of national competencies. Advancing from a developing economy to a developed economy includes advances from a staples based to a technology based economy.
Integration of backward and forward links in the supply chain with a competitive international economy requires the constant surveillance of relevant industries for changes in supply and demand opportunity cost and price fluctuations, and the impact of changing political landscapes on the infinite number of factors effecting industry viability.
When the sustained focus in wards, and not outwards, the result reinforce existing mechanisms, benchmarks and standards. The competitive patterns that have the potential to influence increase efficiency and productivity are thus largely neglected. The countries (or country’s) competitors subsequently and disproportionately benefit from their opportunity to leverage future visioning competencies and technologies while the laggards continue to show diminishing returns on their existing assets.
When backwards and forward links in the supply chain lacks sufficient coordination and orchestration, absent vertical and horizontal integration efforts, resources are leveraged unsustainably and with diminishing returns. A one size fits all approach to governance may work in the short term but in the long term the company’s offering become outdated and unresponsive to changing demands in the market price.
The competitive landscape is critical for these future oriented competencies to be pursued. Whether these, these competencies must be internally driven by corporations or externally pressured from both provincial and federal level is open to debate. That investment in the development of these national, provincial, and corporate KSA’s, and support of the competition that influences the realization of these KSA’s, in necessary if services and product are to remain relevant, efficient and sustainable.
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