Industry and Economic Growth under Urbanization Challenge in Egypt: A Comparative and Econometric Study

Abstract

century, in Europe and North America marked the beginning of urbanization, when labor migrated from rural to urban areas lifting the agricultural sector or any other discipline like, art and crafts to gain higher wages and higher standards of living. The industrial revolution in the 19 th th and 20 From 1980 to 2010, the world urban population increased from 1.6 billion to 3.3 billion, and it is expected to increase by another 2 billion by 2040, which means that the world is urbanizing rapidly. Most of this urbanization takes place in the developing countries. This demographic transition helps in economic development, where all the economic activities are geographically concentrated, and is called urbanization which is a structural change that takes place in developing countries to increase incomes and standard of living. However, this caused increasing slums with inadequate sanitation, water, transport, and health services, also as poverty increased crime and informal economies increased rather than increasing formal employment. Some developing countries started to manage urbanization in a way to achieve economic development, the most recognized country is China. People migrate to get a better standard of life, earn higher incomes, get access to better schooling and social services, cities get better infrastructure than rural areas, such as education, and health. Urbanization is seen from two aspects; first, the growth of cities, which concentrates all economic activities and population in the city industrial productivity. Second, the percent of country’s population that lives in urban areas through non-market incentives or competition in the market. century, there was no structural change or it slightly happened, because the world economy grew very slowly, but now the economic growth must be followed by changes in the economic structure. Structural change is when an economy develops and moves from the traditional agricultural sector in rural areas to modern nonagricultural sector in urban areas such as manufacturing. The improvement in

the

agricultural productivity is a necessity for structural change and economic growth, this takes place when urbanization is found, because the development of agriculture sector needs technology that is developed in cities. Before the industrial revolution in the 18 th Urbanization may cause some social and economic problems, such as the uneven distribution of population between rural and urban areas, as well as the unequal distribution of income, increasing poverty, and unemployment in urban areas, which forces labors to engage in informal activities, such as - 153 -