Final answer:
Newly industrializing countries attract transnational corporations through policies that support innovative companies, provide access to inexpensive labor, and offer subsidies and protection for infant industries.
Step-by-step explanation:
Newly industrializing countries use various incentives to attract transnational corporations to offer production contracts. These may include:
- Policies supporting innovative companies who wish to build production facilities.
- Access to abundant and inexpensive human capital.
- Freedom for market forces in both domestic economies and global markets, as seen in China and India.
- Offering indirect and direct subsidies, protection from competition, and favorable government loans to nurture infant industries.
- Seeking out applicable technology by sending students and commissions abroad to observe efficient industrial operations.
These methods aim to leverage local advantages, such as cheaper labor costs, while providing a supportive business environment to build competitive industries like steel and auto manufacturing, akin to the success stories in Japan and Korea.