5 Factors that affects economic growth and development

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What is economics? What is the need to study an economy?  What type of production needs to take place? How much should be consumed? What are the factors that affect stability of an economy?

We need to study it in detail.

Lets us go deep into it to know what are the factors that affect stability of an economy?

Everybody has some or more knowledge about factors such as inflation, monetary policy and fiscal policy

  1. HUMAN RESOURCE
  2. NATURAL RESOURCE
  3. CAPITAL FORMATION
  4. TECHNOLOGICAL DEVELOPMENT
  5. SOCIO – POLITICAL FACTORS

Human resources

Human resource is the most important factor that can affect any economy. The quality of output is dependent upon skilled creative intelligent people. If there is shortage on the skillful part of humans the output gets affected, so economy should have proper and adequate resources. Japan is rich in its human resources. Due to human resource planning and human resource development program we can take the factors in consideration which helps an economy to grow and develop.

“Try to innovate, preserve, manage and utilize the resources more to see the growth in an economy. Development is the only main motto”

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Natural resources

Second main factor in an economy is natural resources. All the resources include plant, water, oil and gas, metals, minerals, etc. They are dependent on tropical nature for their existence. United Kingdom, United States, Germany, France are best examples that have abundant natural resources. Saudi is a good example of high per capital. The natural resources should be optimally utilized. Because those resources are nature’s gift, we have no authority to damage them in any way. One must make the most use of it.

Capital formation

Capital is the first and foremost important factor that influences growth of an economy. Capital is the root of all cause.  Without capital no economy can survive. An economy should be well versed in basis of capital.

Technological development: 

Technological development is one of the most important factors while considering the growth of an economy. It includes all the scientific tools that are used for production. Men use those technologies to carry their work on daily basis. High cost of technology should be avoided to maintain the imbalance. Technology helps to grow any economy faster because of its adjustments. Technology should be well equipped to avoid future disruption.

SOCIAL AND POLITICAL FACTORS

They are very important factors to be taken into consideration Social factors involve traditions, customs, beliefs, etc. They contribute the part of an economy. The buying behavior of consumers is affected by their thinking, preference, culture, etc. Their beliefs are affecting the modern buying behavior. They cannot adapt the new techniques that affect the nation’s wealth. And political factors, like government intervention, can disturb any private organization to take their own personal step.

These 5 factors are very basic and the most important ones which help an economy to grow and develop. Any disturbance can lead to unfavorable conditions.