This approach has been label the infant industry argue the problem is but it’s difficult to identify industries with a potential comparative advantage if the long industries protect it may never be able to compete on the world market
Developing countries can build competitive benefit ring industries trying to make sure that they are kicking access to markets perhaps to world markets and to some extent perhaps by subsidizing until they get them
Developing countries can also build up their capital stock by substituting import domestically produce manufactured this approach has been label import substituting industrialized nation and is closely relate to the infant industry argument. The government is could encourage banks to channel funds into money faction by guaranteeing loans. The capital accumulate would eventually generate a natural comparative advantage in manufacture but the scale of production will be limited to domestic demand and the work force may lack the necessary skill so there it is a risk that the manufacturing industry may never become cost-efficient all competitive in the world market
Input substituting industrialization in latin America start from the premise that latin America economy with truck into global system as exporters of primary commodities they have to break out if that is injuries etc. on the strap because the terms of trade were moving against prime exporting economies