The Rostow’s Stages of Growth model is an economic model. American economist Walt Whitman Rostow published this theory in 1960. This theory supported capitalism and said how the growth will move on step by step.
Rostow’s Five Stages:
- Traditional society
- Preconditions for take-off
- Drive to maturity
- Age of High mass consumption
Rostow’s Stages of Growth Model:
- Low Percapita
- Huge population dependent on agriculture or Primary Sector.
- Almost no technology
- Lack of Social mobility (No improvements in the hierarchy. (Eg: A cobbler will be a cobbler throughout his life and his son will also be a cobbler.
- No Political Conscious or sometimes regional political consious.
Pre-conditions to “take-off”:
- People will think about economic progress (Only for Personal progress)
- External demand for raw materials initiates’ economic change;
- Commercial agriculture & cash crops.
- The decline of Birth rate.
- Mobilisation of Work Force.
- Increase in Credit Institutions:
- New Enterprises:
- Investment growth from 5 to 10%
- Emergence of Patriotism
Take off Stage:
- Beginning of manufacturing
- The rate of Investment increases rapidly.
- Primary sectors in the economy shift quickly towards secondary.
Stage of Drive to maturity:
- A shift in the Occupational Distribution.
- Increase in the Consumption Pattern.
- Many industries will come into effect.
- So Entrepreneurial Leadership will be more.
- Large-scale investment in infrastructure
Stage of Age of mass consumption:
- Decrease in Primary sector and increase in tertiary sector
- Welfare state redistributing income to correct the aberrations of the market process
- Extension of consumer demand for durable consumer goods and high-grade foods.
- Disposable income, beyond all basic needs, for additional goods