The American economic historian Walter W. Rostow (1971) postulated a five-stage sequence of economic and social development, through which, he argued, all societies may pass. Rostow proposed, in his model of economic development, five stages as given below:
1. The traditional society.
2. The preconditions for takeoff.
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3. The take off.
4. The drive to maturity.
5. The stage of mass consumption.
1. The Traditional Society:
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The traditional society is characterized by a high percentage of people in agriculture and high spending of national wealth on what Rostow labeled for this model non-productive activity, such as military and religion.
The first stage is characterized by primitive technology, hierarchical social structure and behaviour conditioned more by custom and accepted practice than by apparently rational criteria. These characteristics combine to place a ceiling on production possibilities.
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2. The Preconditions for Take Off:
The country produces an elite group of people willing to try innovative economic activities and to implement new industrial agricultural techniques. National investment is concentrated in transport and other infrastructures needed for the ultimate increase of productivity.
The second stage emphasized a size in the rate of productive investment, a start on the provision of social and economic infrastructure, the emergence of a new, economically-based elite and an effective centralized national state.
3. The Take Off:
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Rapid growth is generated in a limited number of sectors, such as textiles, railways or dairy products. The country undergoes a form of industrial revolution, with a rapid series of technical advances in a few industries.
The take off stage has been described by Rostow as the great watershed in the life of modern societies.
It is a period of around ten to thirty years, during which growth dominates society, the economy and the political agenda and investment rises, especially in the leading sectors of manufacturing industry. Self-sustaining growth results in the drive to maturity stage.
4. The Drive to Maturity:
Modern technology is applied to a wide variety of industries. Labour becomes more skilled and specialized. Basic industries in addition to those from the take off period grow.
Characterized by diversification as most sectors grow, imports fall and productive investment ranges between 10 and 20 per cent of national income.
5. The Stage of Mass Consumption:
The economy shifts from production of heavy industry, such as steel and power, to consumer goods, like cars, TV sets, computers and refrigerators.