Assessing the Obstacles to Industrialisation: The ... - Innovation

joStephen Ei. Eiaberoccurred as well. On an aggregate level, real expenditures on private fixedcapital formation were I 67 % higher in I 9 3 9 than they had been in I 9 3 2.Part of this increase in capital spending was the result of modernisationprogrammes undertaken in older industries. The value of the physicalplant of the Fundidora Monterrey steel mill, for example, increased by3 j % between 1934 and 1937. The value of the physical plant of the majorcotton textile producer, the Compadia Industrial de Orizaba, almostdoubled during the same period, increasing by 98°/~.76Of equalsignificance to the renewed investment programme of older industries wasthe creation of new firms. Basically, these new companies did not enterinto competition with the old established giants. They left beer brewing,steel-making, paper milling, and other capital-intensive, verticallyintegrated operations to the companies that had dominated those lines ofmanufacture since the Porjriato. Instead, the new entrants to the marketconcentrated on new products, like rayon knitwear, cotton knitwear, silkand high-grade cotton shirtings, hosiery and other goods that had beenimported up until then. In fact, of the 692 firms listed in the 1938 taxregistry of the textile industry, well over half were involved in themanufacture of these new product^.^'Manufacturing, in fact, came to lead the economy at this point, withvalue added in this sector growing 14j % faster than GDP as a whole."In fact, for the next forty years manufacturing was the engine of growthof the Mexican economy. In this round of Mexican industrial developmentnew obstacles to growth presented themselves, and many of the oldobstacles continued to persist. As had occurred in the earlier period, theseshaped both the rate and structure of industrialisation, and prevented,once again, a self-sustaining process of industrialisation from taking hold.Although Mexico did not become an industrial society until the secondhalf of the twentieth century, a significant amount of industrialisation wasachieved in the nineteenth century - particularly during the 20 years from1890 to 1910. Even as early as the 1830s Mexican policy-makers andentrepreneurs attempted to copy the experience of Western Europe byintroducing modern technology and modern organisational arrangementsin the cotton-textile industry. hlexico's low level of nineteenth-centuryindustrial growth was not therefore a product of not wanting toindustrialise.ifi Cardenas, I*a zndusfriali~acidn twexicana, p. 144: Haber, Industcy and Ihderdei~elopment, ch.10." Secretaria de Hacienda y Credito Pliblico, 'Director10 de las fabricas de hilados ytejidos registrados ' (Mexico, 1918).'"irdenas, I,a industriaii?acio'n mexicana, p. 10.