WHAT IS GROWTH POLE THEORY PPT.pptx

Description of growth pole theory

1. Growth Pole Theory Abhishek Anand

2. Growth pole theory The Growth Pole Theory conceived by French regional economist Francois Perroux (1995) and later expanded by Boudeville (1966) is a regional and industrial planning model for a “set of expanding industries located in an urban area and inducing further development of economic activity throughout of its zone of influence”.

3. Precedent of the theory : Space as the planning area of decision unit. Space as the field of forces acting upon the decision units. Space as the field of homogeneous objects

4. Core idea of the Growth pole theory Economic development and growth is not uniform over an entire region but instead takes place around a specific pole. The pole is characterised by key industry around which linked industries develop mainly through direct and indirect effects. Expansion of this industry implies expansion of output, employment, related investments as well as new technologies and new industrial sectors. Because of scale and agglomeration of economies near the growth pole regional development is unbalanced. Transport terminals play a significant role here.

5. According to perroux - Growth does not appear everywhere at the same time, it appears at points or poles of growth with varying intensity, it spreads along various channels and with differing overall effects on the whole economy,

6. Perrux considered two basic aspects as base of his theory Theory of development Inter industrial linkages Thory of development : The theory of development states that Growth is not seen in everywhere but it is in a form of aggrigate or poles.Growth is not seen in everywhere. it will be seen in a form of cluster and agglomerate. This is the theory of development. Inter industrial linkeges : The area which is developing all the industries that are setup they will be having some linkeges with another . Like One industry depends on another. An output of one industry will be input for another one. Like we have a firm that is growing cotton now the cotton is a output of firm A, now that cotton will be a input for firm b which is a cotton mill industry than it will make cloths from it, now this cloths will turn into finished product like t-shirts. So we can see all the industries are linked with another.

7. Three main factors of Growth pole theory: A. External Economics B. Agglomeration C. Linkages External economics - i. Positive: If an iron industry has 3 subsequent industries like steel industry, glass industry and circuit industry and these 3 industries depend on iron industry. Then if the iron industry produce more, the subsequent industries will get more amount of raw material. ii. Negative: On the other hand if the iron industry produce less the subsequent industries will get less amount of raw material as a result they start producing less. Agglomeration : Agglomeration is nothing but the expansion of small unit to the large unit. Example: Before 1968 Ankleshwar is a small town. But after ONGC and some other industry came and the scenario suddenly change. People migrate in Ankleshwar from nearby villages and towns for job, labour work and other work, so agglomeration create over there.

8. Linkages - i. Forward linkages: An industry encourages investment in the subsequent stages of production either by transmitting innovation or effects of innovation forward. ii. Backward linkages : An industry encourages investment in the earlier stages of production by expanding its demand for inputs.

9. According to Boudeville, “ A set of expanding industries located in an urban area and inducing further development of Economic activity throughout its zone of influence.” Boudeville’s Regional development Theory   It is a modification of Perroux theory. He was the one who brought the growth pole theory as geographical context.   Then he classified economics under three heads – Economics internal to the firm, Economics external to firms and internal to the industries, Economics external to industries but internal to the urbanization.

10. Above mention figure A shows that initially any single growth pole started and then its dependent terminal started clustering near that parent or growth pole. And then due to that cluster peoples started migrating nearer to that so it creates an agglomeration near that.   Figure B shows that due to the growth of that primary pole, another growth pole also started over that region it is called secondary growth pole. This may connect with the primary terminal.

11. Criticism This theory is unapplicable for the regional problems like urban poverty and income inequalities.