Any industry often starts at a very basic level. Over time, as lots of people get into the industry, they learn new skills and find out how to do things better. The industry scales and the businesses invest more and more capital to acquire sophisticated equipment, etc. However, it is not possible for a new person (or even a country) to directly enter at this sophisticated stage. In the early stages, you could start with small amount of money and learn your way up. But once the entire industry becomes sophisticated, a new entrant directly has to start with high capital and knowhow. This becomes a major barrier.
Stage of Industry as a Barrier to Entry
Stage of Industry as a Barrier to Entry
Stage of Industry as a Barrier to Entry
Any industry often starts at a very basic level. Over time, as lots of people get into the industry, they learn new skills and find out how to do things better. The industry scales and the businesses invest more and more capital to acquire sophisticated equipment, etc. However, it is not possible for a new person (or even a country) to directly enter at this sophisticated stage. In the early stages, you could start with small amount of money and learn your way up. But once the entire industry becomes sophisticated, a new entrant directly has to start with high capital and knowhow. This becomes a major barrier.