Economic Growth and Economic Development

Economic Growth

• Economic growth is a rise in the level of production of goods and services that are maintained over a long time, assessed in terms of value-added

• The process of economic growth is essentially a dynamic concept. It refers to a continuous expansion in the level of economic output, i.e., it refers to forces that generate a positive rate of change over time and not the forces that lead to discrete (or one-shot) change from a lower to a higher level of output which is temporary and short-lived

• However, the word output expansion is prone to ambiguity in the sense that does it signify an increase in total production or growth in output per capita. A rise in the former is called ‘extensive’ growth, while an increase in the latter is termed the ‘intensive’ growth

Economic Development

• Economic development is a process wherein an economy’s real national income as well as per capita income grows over a lengthy time

• Here, the process signifies the effect of specific forces which work over a long time and represent changes in dynamic aspects. Economic development encompasses changes in resource supply, in the rate of capital creation, in demographic composition, in technology, skills and efficiency, in institutional and organisational set-up

• Economic development also entails changes in the structure of demand for commodities, in the level and pattern of economic distribution, in number and composition of the population, in utilisation propensities and expectations for everyday comforts, and the example of social communications and strict creeds, ideas and associations. In short, economic development is an interaction consisting of an extended chain between related changes in essential parts of supply and the construction of interest, coming about to develop in the net public result of a country in the long haul

• Economic development is the process whereby basic, low-income national economies are converted into contemporary industrial economies

• Intensive growth occurs when a business expands its product range or market presence

• Characteristics of developed countries are economical growth, intensive growth, security etc

Difference between Economic Growth and Economic Development

Characteristics of Developed Countries  

• Significance of the Industrial Sector
• High Rate of Capital Formation
• Use of High Production Techniques and Skills
• Intensive Growth of Population

Factors Affecting Economic Growth

• High-quality tools aid in the betterment of the product’s functioning and output. Workers may create greater output in a shorter amount of time if they have productive and efficient tools
• The greater the number of workers, the greater the number of hands available. Increased production is aided by the extra hands. In order to achieve their productive potential, the correct type of employees must flow to the right occupations in the right areas, in harmony with the right sorts of capital products
• Working can become more efficient , thanks to productive technological advancements. As its major purpose is to minimise time and enhance production, new technology aids in producing more output with the same stock of capital goods

Factors Affecting Economic Development

• Many variables influence people’s life expectancy in a given place, such as dietary habits and the likelihood of war, pandemics, or natural catastrophes. Pollution levels are also used to assess how long individuals live on average
• GDP is the most popular measure of gauging our level of living. GDP per capita is calculated by dividing the annual Gross Domestic Product by the population of the economy
• Education levels and standards have a big impact on labour productivity. It is impossible for an economy to progress from manual labour to new higher-tech businesses in the service sector without basic reading and numeracy
• Due to larger levels of capital and the benefits of drawing multinational corporations into their economies, developing nations that can attract inbound investment can experience tremendous progress in development

Conclusion

Economic growth appeals to emerging countries that are aware that the process would be lengthy. Developed countries are drawn to economic growth because they seek quick and accessible data on their country’s revenue growth. Both track progress, but in different ways and through distinct channels. They are comparable but distinct at the same time.