-
Economic growth is the potential of a country to produce more. Technically, a country does not actually have to create more products or services for economic growth to increase. However, many financial organizations look at the gross national product or other examples to gauge how much the economy has grown. Several major can influence this growth depending on the nation.
Technology
-
Technology is always a contributor to economic growth. Businesses that create new technology can produce and sell it, increasing economic capacity by making a product that previously did not exist. Other businesses can use new technology to produce and do it more accurately. This increases the efficiency of resource use and allows the economy to grow. Other types of technology replace workers and decrease costs, freeing up more money for research and development and other ventures.
Resource Expansion
-
Any time a resource expands in some way, the economy tends to grow as a result. Resources can expand in several ways. Someone might create a new process that makes a more refined natural resource than before. A company might discover a new source of natural gas, or acquire a piece of land with rich timber. More resources lead to more economic growth.
Social and Financial Capital
-
Capital generally helps to increase economic growth, but there are two important and intangible types of capital not related to resources. The first is human capital, the social aspect of the economy. When the skills, attitudes and experience of the workforce increase, the economy grows as well. The second, financial capital, refers to the direct funds that companies can use.
Policy
-
Government policy also plays a very important role in economic growth. Governments can encourage or discourage economic growth through taxes, tariffs and financial regulations. Governments also control what types of international resources businesses can access, as well the types of technology or workforces companies can use abroad.
No comments:
Post a Comment