Precondition Stage

This is awekening stage when new methods of production are adopted and society begins to put upt its infrastructure for better growth. The spreading out of markets and the improvements in industry and agriculture make for transformation of the economy. This stage is the result of a jolting effect on the economy by education, war or inflow of foreign technology. This stage is made possible by the consciousness for capital formation through saving and use of available credit from the growing credit institutions.