Therefore the Backyard Steel Campaign was a failure and didn't make the impact on China's economy that Mao needed. .
The government wanted to bring industry fully under their direction, therefore they created State-owned enterprises (SOE's). Existing firms and companies could no longer operate as private, profit-making concerns, instead they would work for the state as SOE's. Prices, output targets and wages were fixed by the state. The SOE's were inefficient, largely as a result of abandoning any idea of incentives. The SOE's were given state subsidies and workers were given guaranteed wages which removed any motive or initiative and the system was stultifying which made the SOE's underachieving. The positive side of the system was that the workers had an 'iron rice bowl' which basically meant that the workers were guaranteed a job and protection of their wages, moreover the SOE's provided the workers with accommodation, medical and education benefits for their families. Overall the SOE's were a failure as they took away the workers initiative to work efficiently therefore the SOE's made little or no impact of the development of China's economy. .
Although industry was the main focus of the GLF the agriculture was still important and Mao thought that by increasing the amount of agriculture China's economy will also increase. In the first five year plan the peasants joined together to make collectives, in the GLF Mao wanted to do the same but on a bigger scale and made communes and they called this process collectivisation. Between 1956 and 1958 directed that the existing 750,000 collectives be amalgamated into a number of large communes. In 1958 Mao made this collectivisation process an essential part of the GLF. Mao seemed to have organised the communes effectively, he divided China's agricultural land into 70,000 communes, each commune made up from 750,000 brigades and each brigade containing roughly 200 households, the whole system was under control of the PRC's central government and everything was to be dictated by the government, there was no private farming and peasants needed internal passports to pass from one commune to another.