Learn about the key factors of economic development and how they contribute to sustainable growth and prosperity. Find out how infrastructure, education, governance, technology.
Factors of Economic Development.
The process of economic development is accomplished through two type of factors or pre-requisites or determinants. (i) Economics Factors : Economics factors refer to natural resources and man-made resources of a country. They include:
- Human Resources
- Land and Water Resources
- Mineral Resources
- Energy Resources e
- Man-made Resources
- Capita/ Resources, and
- Animal Resources
(ii) Non-economic factors:
Non-economic factors refer to cultural, social, political and administrative factors of a country.The both type of economic factors, in fact, play a decisive role in economic development of a country. However, their individual role may be different in different sectors of the economy.To what exact extent these factors are playing their due role in attaining the most coveted objective — the objective of economic development of Pakistan? Following pages are providing the answer.
Factors Affecting Economic Development.
Both natural resources, investment, population, and technology factors are interrelated in building a country’s economy. Here is the explanation:
1. Natural resource availability factor
One of the factors that influence development is the availability of natural resources. Natural resources of a country actually have good economic value if managed properly.
The results of the management of natural resources can later be used by the state for the benefit of economic development from other sectors. Natural resources should be managed as carefully as possible and pay attention to the principle of sustainability.
Natural resources that are managed carelessly are at risk of becoming scarce or even extinct . This can certainly harm the country economically.
2. Investment increase factors
Another factor that influences development is investment. Investment plays a role in providing capital goods, such as factories, machinery, or land.
These capitals are certainly very necessary in the process of managing natural resources. In addition to providing capital, investment is also useful for reducing production costs.
In addition, through investment, the growth opportunities of the business climate are increasing. This can increase the opportunities for opening new jobs, community income, and community consumption levels .
3. Population factor
Population is also one of the factors that influence a country’s economic development. Nurjanah and Fitriani believe that population plays a major role in meeting labor needs.
If the number of qualified workers in a country can be met, then economic development will occur faster. However, if the number of qualified workers is small, then the economic development of a country will be hampered.
In fact, there are countries whose development is hampered by a lack of qualified workers even though they have a large population.This problem can be overcome by improving the quality of human resources ( HR ) through education.
4. Technology usage factors
The fourth factor that also influences economic development is the use of technology. Technology plays a role in increasing productivity.
Technology works by making work easier and faster, to the point of multiplying production. In addition, the use of technology can also reduce production costs and reduce the risk of defective products.
If a country can make maximum use of technology, economic development can run smoothly.
5. Political stability.
Political stability and security are important factors. Political instability can create uncertainty, discourage investment, and disrupt economic activity.
6. Institutions and governance.
An effective and transparent institutional and governance system can create a business climate conducive to economic growth.
7. Innovation and technology.
Technological advances and innovation can increase production efficiency, create new opportunities, and improve a country’s economic competitiveness
8. International market conditions.
One of the most important factors in economic development is the foreign market. Access to international markets, free trade, and international economic relations can affect a country’s economic growth.
9. Global environmental conditions.
Factors such as commodity price fluctuations, climate change, and global financial crises can also impact a country’s economic development.
10. Social and cultural.
Social and cultural aspects of society, such as values, norms, and social structures, can influence the sustainability of economic growth. It is important to understand that these factors are interrelated and play a complex role in economic development. Countries that are successful in economic development are often able to manage and integrate these factors well.