Economies worldwide are in an ongoing race for growth and prosperity. Economic growth refers to the upward shift to efficient means of production and further advancement in existing technology. The growing economy is measured in terms of the country’s output or gross domestic product. Economic growth is an increase in the productivity i.e. the scale of output coming from the resources. So, how countries achieve economic growth? What are the ways through which nations can efficiently produce goods and services in order to boost their economy? The answer to these questions can be given by the factors of economic growth given below:
- Natural resources: natural resources like oil, natural gas, forestry, mineral deposits etc., plays a crucial role in the economy if they are efficiently used for production. It is essential to recognize the importance of scarce resources.
- Human resources: human beings working as labor are very important for the economy. Highly skilled labor is one of the underlined factors of efficient production.
- Physical capital and infrastructure: it refers to the increased investment in factories, machinery and roads that lowers the cost of economic activity.
- Technology: technological advancement has a remarkable position in economic growth all around the world. Better and convenient ways of production have increased the efficiency of means of production in the economy.
- Law and order system: the government has a vital role to play in the economy. it regulates the economic activity to create a fair society.