Domestic Industries

Definition

Domestic industries refer to the economic activities and production processes that occur within a nation, focusing on local resources, labor, and market demands. In the context of Spain and Portugal, these industries were significantly influenced by colonial endeavors, where goods produced in colonies fed back into the domestic economies, altering trade patterns and local production capacities.

5 Must Know Facts For Your Next Test

1. Domestic industries in Spain and Portugal were heavily reliant on raw materials extracted from their colonies, such as sugar, tobacco, and precious metals.
2. The influx of wealth from colonial trade allowed Spain and Portugal to invest in their domestic industries, leading to some growth in sectors like textiles and shipbuilding.
3. Many domestic industries faced challenges due to competition with cheaper imported goods from colonies, affecting local artisans and craftsmen.
4. As domestic industries grew, they contributed to a rise in urbanization in Spain and Portugal as people moved to cities for work.
5. The reliance on colonial products shaped consumer habits in Spain and Portugal, creating a culture of dependency on imports rather than developing diverse local industries.

Review Questions

• How did domestic industries in Spain and Portugal adapt to the influx of goods from their colonies?
  • Domestic industries in Spain and Portugal adapted by integrating colonial raw materials into local production processes, allowing for the creation of new products. This led to increased competition with imported goods, forcing local artisans to innovate or risk falling behind. While some sectors benefited from the wealth generated through colonial trade, others struggled to maintain their relevance in the changing economic landscape.
• Evaluate the impact of domestic industries on urban development in Spain and Portugal during the colonial period.
  • The growth of domestic industries significantly impacted urban development in Spain and Portugal by encouraging migration from rural areas to cities. As industries expanded, they created jobs that attracted workers seeking better economic opportunities. This urbanization led to the development of infrastructure and services in cities but also resulted in challenges such as overcrowding and poor living conditions for many workers.
• Assess the long-term effects of reliance on colonial goods for domestic industries in Spain and Portugal after independence.
  • After gaining independence, the reliance on colonial goods had lasting effects on the economies of Spain and Portugal. The sudden loss of access to these resources created economic instability and forced these nations to rethink their industrial strategies. Many domestic industries struggled to adapt to a new market environment where they had to compete without the benefit of colonial support, leading to economic restructuring and a push towards more self-sufficient industrial policies.

Related terms

Mercantilism:

An economic theory that promotes governmental regulation of a nation's economy for augmenting state power, often through the establishment of a favorable balance of trade.

Colonial Economy:

An economic system in which the colonial powers extract resources from their colonies while using them as markets for their manufactured goods.

Craftsmanship: The skilled practice of creating goods by hand, which was essential to domestic industries before industrialization took hold.