BRICS is acronym of developing countries which comprised of Brazil, Russia, India, China and South Africa. These five countries even though they are located at different geographical area, they have one thing in common which is economic growth. One would wonder why these countries grow so fast than other developing countries. This question will be answered in the paper. This paper will examine the key factors of economic growth in the above countries. Second, it will explore the reason behind their faster growth compare to neighboring developing countries.
Human Capital
One of the main key factors of economic growth is human capital. Both BRICS countries have well skilled labor. The stock of knowledge accumulated by employees resulted in higher GDP. Human capital can promote economic growth indirectly or in directly because it is the only tools can be combined with Know-how to improve efficiency and innovation. It has been explained in endogenous growth model formulated by Romer (1986); that the accumulation of knowledge can be combined with physical capital to produce output. The ideas generate innovation which can enhance economic growth and more output. Secondly, technology is the invention created by human capital. These BRICS countries have improved greatly since earlier 1990s. For instance China and Russia both advanced human capital that is also equivalent to other western countries. This well skilled labor is the driving force in the BRICS countries. Population growth is another factor behind accumulated human labor because huge population will consume more resources. With this pressure, more labor will be used for production.
Capital Accumulation
Capital accumulation is another factor of economic growth. Capital...
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The measure of growth is flawed, how countries see their growth is based on the consumption of their people. Many countries use the GDP (Gross Domestic Product) as an indicator for growth, as defined in It’s All Connected, “(GDP) is a calculation of the total monetary value of goods and services produced annually in a country” (Wheeler 11). The...
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Artadi, Elsa V., and Xavier Sala-i-Martin. The Economic Tragedy of the XXth Century: Growth in Africa. Cambridge, MA: National Bureau of Economic Research, 2003. Print.
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