Advantages And Disadvantages Of Commercialization

Advantages And Disadvantages Of Commercialization: Commercialization, also known as commodification, is the process through which something that was before worthless is given commercial value. Commercialization is the process of applying commercial principles to something in order to profit from it. It is the practice of exploiting something for the purpose of maximizing financial gain. Commercialization is the process of transforming something into a commodity that can be purchased and sold, useful or valuable.

Commercialization encompasses the act and process of bringing new products and/or services to market. Commercialization’s ultimate goal is always profit.

Every area of life can be commercialized. Commercialization occurs frequently in the following areas: art, innovation, corporate experiments, and government activities. Commerce is art. This is because any work of art may be commercialized. The economy is centered on art, as art entails construction, production, design, and drawing.

Innovation entails the generation of new ideas or the revitalization of current ones. Commercialization of innovations is always possible, as it is the concept that introduces new items and services to the market.

Commercialization is also a central theme in business experiments. While conducting business experiments, it generates the possibility of discovery and expansion of businesses, which is a component of commercialization.

Government agencies are often considered nonprofit organizations. This is because profit maximization is not their primary objective. They are typically not profit-driven or motivated, but rather active for the greater good of the populace. Nonetheless, commercialization is unavoidable in the public sector. Generally, government establishments are amenable to commercialization. Here are the advantages and disadvantages of commercialization.

Advantages And Disadvantages Of Commercialization

1. Innovation: This is the stage during which new ideas are generated. Innovation is the process of introducing something new into an existing system through the use of novel ideas. Internal or external innovation is possible. When it’s inside, it’s more of a refurbishment. It is the expansion of an already established establishment into a larger business or corporation.

Read also: What’s the difference between Medicare and private health insurance?

When it is external, it refers to a brand-new establishment that exists independently of an existing business or corporation. Innovation occurs at several stages, including idea development and mobilization, evaluation, conceptual analysis, experimentation, and execution. This innovative stage is used to strategize the probable manufacturing of anything new.

2 Production: Following the stage of innovation is the stage of production. Here, the new concepts that have been created, assessed, and experimented with are put into practice.

3. Distribution and Marketing: This stage entails the real dissemination of newly created concepts that have been implemented. This is the stage at which the new concept or product is introduced to the target market.

4. Revenue and profit: This is the point at which commercialization concludes. When a product generates revenue and profit, the commercialization process is said to be complete.

5. Customer Support: This is a metric that indicates how well a commercialized product is maintained. It entails guiding customers through the product’s use and developing a channel for receiving customer feedback.

Commercialization’s advantages

1. Employment Opportunity: Commercialization contributes to job creation. When new products and services are offered, it creates a need for labor to complete the process from introduction to completion.

There are numerous options to work with marketers, distributors, analysts, agents, laborers, and operators. And as more individuals embrace and employ the items and services, a demand for additional distributors and merchants will arise. All of these occurrences led to the same conclusion: there would be additional opportunities, including self-employment.

2. Commercialization facilitates the development of solutions: Necessity is the mother of inventions. When there are wants and challenges, humanity’s innovative spirit is motivated to seek and provide solutions. No solution is ever provided for free.

Read also: What you should know before applying the henna to your hair

When a solution becomes successful, it is marketed to generate revenue. However, a solution has been presented in each case, and people are always eager to pay for solutions.

3. Profitability: The ultimate goal of commercialization is profitability.

4. Commercialization Decreases Monopoly in Business: Monopoly in business exists when a single business or individual provides an exclusive product or service. It is the market dominance of a single or a few brands or products. Monopoly power is not always beneficial to customers.

This is because consumers have a limited number of options. Commercialization enables the elimination of monopolies and the introduction of new types for clients. Commercially, it would be risky to leave the fate of the masses in the hands of a single or few business enterprises.

5. Commercialization Saves the Government Resources and Expenses: When private individuals participate in commercialization, the government’s development burden is alleviated.

6. Establishment of a Pathway for Healthy Competition: In business, competition is always preferred over monopoly. When people enter into commercialization, there is usually a surge in demand for established brands to continue developing. Due to this competition, industries strive to maintain a high level of demand by providing the highest quality services to the public.

7. Economic Development and Productivity: Commercialization significantly adds to the state’s economic development, as it encompasses all activities that can be monetized. It develops the economy by ensuring consistent product availability, reducing imports, creating job opportunities, and maintaining the value of the state currency.

State currencies would lose value in the absence of commercialization. This is because money is not a measure of worth in and of itself, but rather a way of measuring value. When there are fewer available goods and services, currency retains its valueless status, which is a sign that the economy is devaluing. Due to commercialization, continuous manufacture of goods is possible.

8. Provision of a Diverse Variety of Options: As a result of the ongoing demand for innovation, commercialization exposes the masses to a diverse range of options. There would be a greater variety of brands of products and services to choose from.

Commercialization’s Disadvantages

1. High Production Costs: Commercialization undoubtedly involves a significant amount of economic input in the form of capital and other resources. Commercialists may have difficulty successfully implementing their innovation due to the high cost of the resources and materials used in its manufacture. And when production costs are high, retail costs are also high.

2. Commercialization is Profit-Oriented, Not Wellbeing-Oriented: Commercialization is fundamentally concerned with profit, not with the welfare of the people. Its output is more appropriately characterized as solutions supplied in exchange for compensation.

3. Uneven Distribution: Products cannot be distributed evenly. Additionally, commercialization promotes an unequal distribution of wealth.

4. Redundancy: The inevitable innovation of machines for commercialization may result in a state of redundancy, in which individuals are laid off because their services are no longer required, typically because robots have taken over tasks that would normally be performed by humans.

5. Irregularities: There may be times when the production rate decreases for whatever cause. And when the rate of production is slowed, there is already proven higher demand, and when demand increases, there is a possibility of an increase in commodity and service prices. Inflation may occur as a result of these abnormalities.


In this article, we have been able to discuss the Advantages And Disadvantages Of Commercialization. Governments or private enterprises can initiate commercialization efforts. There must be a distinction made between commercialization and privatization. While privatization entails the transfer of management and control of public corporations to the private sector, commercialization entails the extraction of profit from a new or existing entity, which may be public or private.

The obvious distinction is that commercialization is motivated by profit maximization. Commercialization should be encouraged because the benefits appear to outweigh the drawbacks.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
%d bloggers like this: