Economic Growth refers to the progressive change in the expansion of production of goods and services which can be indicated as Real Gross Domestic Product (GDP) by a country over a given period. It is achievable for the country to prosper if the economic growth was well-maintained over the years. However, gradual or lack of economic growth would cause a nation to drop into a devastating poverty. (Parkin, 2014). Therefore, sources of economic growth are vital to a nation’s advancement. In this report, the author will discuss and explain 2 main sources of economic growth which are; Growth of Labour Supply and Growth of Labour Productivity. Growth of Labour Supply Labour supply refers to the number of hours individuals are and able to supply …show more content…
(Investopia, n.d.) Labour productivity is the key factor in defining the productive possibility of the economy and would benefit countries in a long run. There are 3 main factors that are affecting the growth of labour productivity; Human Capital, Physical Capital and New Technology Human & Physical Capital Growth Human Capital refers to the employee’s skill set. With investment from the companies for the employees, the qualities of the employees can be improved through further education, on-the-job training and learning-by doing. All these do have an economic value to the company and the economy as a whole. (Investopia, n.d.) Physical Capital refers to the factor of production which is part of the production process which comprises things like equipment, electronics, buildings and machineries. All these help to turn raw materials into useful products or services which attracts organizations to invest money into getting it if they would like to start on any production or improve on their production process. (Nash, …show more content…
It is inevitable to say that New Technology is the vital source of labour productivity which increases economic growth. Not only it generates more efficiency and improves standard of living; it also brings in more investment. According to Infocomm Development Authority of Singapore (IDA), iSPRINT has been introduced since March 2010 to support SMEs the use of technology to boost its’ productivity and growth. During a budget speech in 2014, there was a S$500 million ICT for Productivity and Growth (IPG) programme which shows a significant boost to Singapore’s effort in emphasizing on solutions to turn SME sectors and use of high-speed connectivity for new growth of business. One of the solutions that were part of the programme was Piloting of New or Emerging Solution. (IDA, 2015) “Emerging Solution” is solutions to the technology advance where it does have the potential to turn businesses to have the ability for new revenue streams (domestic or international), new business models or processes. Some examples would be creations of sensors, data analytics and robotics. (IDA,
Economic growth refers to the rate of increase in the total production of goods and services within an economy. Economic growth increases the productivity capacity of an economy, thereby allowing more wants to be satisfied. A growing economy increases employment opportunities, stimulates business enterprise and innovation. A sustained economic growth is fundamental to any nation wishing to raise its standard of living and provide a greater well being for all. Gross domestic product (GDP) is the monetary value of all final goods and services produced over a year. It is the total value of production within the economy. The total value of production is the total value of the final goods or services less the cost of intermediate goods purchased. GDP at market prices (nominal GDP) measures the value of total production at the present price level.
...sterlin, Richard A. "Does Economic Growth Improve the Human Lot?". Nations and Households in Economic Growth:
Every year there is a ‘league table‘ published showing the level of economic growth achieved by each country. The comparison is made using each countries Gross Domestic Product, or GDP. An important factor to look at is the difference between actual and potential economic growth. Actual economic growth increases in real GDP. This increase can occur as result of using previously unemployed resources, or reallocating resources into more productive areas or improving existing resources. Whereas potential economic growth is the productive capacity of the economy. For example, it can be shown by the predicted ability of the country to produce goods and services. This changes when there is an increase in the quantity or quality of the resources. All countries have different ways of achieving this with the resources they have available to them. For this reason it party answers the question of why some countries are richer than others. It is widely thought that the productive capacity of an economy will increase each year largely due to improvements in education and technology. This will obviously differ from country to country. For example, in the UK the quality of fertilizer could be improved, hence forth increase the years fruit and vegetable output.
...nd again resulting in creation of bigger markets and pulling large competitors and creating new job opportunities, but the problem is with undefined factors like outsourcing, lack of skill development in respect with technology advancement. Technology advancement may be causing huge impact on employment but it is also making human living better. Technology as became part and parcel of our life so we can’t think of life without technology, but to make sure that the same does not harm our livelihood we should keep in track and sharpen and hone our skills with advancement of technology. (Brynjolfsson & McAfee, 2011)
Economic growth focuses on encouraging firms to invest or encouraging people to save, which in turn creates funds for firms to invest. It runs hand-in-hand with the goal of high employment because in order for firms to be comfortable investing in assets such as plants and equipment, unemployment must be low. Hereby, the people and resources will be available to spur economic growth.
The increase in operations leads to the need to hire more workers. The new workers then use their new wages for goods and services. This increases demand and will drive economic growth. Truly an excellent theory. In theory, it appears to be the end all.
· Capital: When labor is applied to land to grow wheat, for instance, something else is used. Generally it is a plow or a tractor. That is to say, land and labor are shared with manufactured resources in order to produce the things that we need. These manufactured resources are called capital, which consists of machines, buildings, and tools. Additionally, capital consists of enhancement to natural resources, such as irrigation ditches. Money is used to buy factors of production – it is not a factor itself. The return for investing in capital is called interest.
Mohammed, J., Bhatti, M., Jariko, G., & Zehri, A. (2013). Importance of Human Resource Investment for Organizations and Economy: A Critical Analysis. Journal Of Managerial Sciences, 7(1), 127-133.
2. Human capital (knowledge, skills and training of individuals) and the production of new technologies are essential for long run growth.
In order for any country to survive in comparison to another developed country they must be able to grow and sustain a healthy and flourishing economy. This paper is designed to give a detailed insight of economic growth and the sectors that influence economic growth. Economic growth in a country is essential to the reduction of poverty, without such reduction; poverty would continue to increase therefore economic growth is inevitable. Through economic growth, it is also an aid in the reduction of the unemployment rate and it also helps to reduce the budget deficit of the government. Economic growth can also encourage better living standards for all it is citizens because with economic growth there are improvements in the public sectors, educational and healthcare facilities. Through economic growth social spending can also be increased without an increase of taxes.
The Desirability of Economic Growth The Benefits of Economic Growth = == == == ==
Economic growth is one of the most important fields in economics. In current generation economic is developing well. Economic growth is really important to country and for the world as well. Economic are one of the identity for country because it shows a country development and attraction for other countries (F, Peter. 2014). For example well economic develop such as Singapore, Dubai, New York, and Japan. These countries are well develop and maintaining their economic growths. Economic growths are really important because higher average incomes enables consumers to enjoy more goods and services. Then, lower unemployment with higher output and positive economic growth firms tend to utilize more workers creating more employment. Enhanced public
It is natural to be misled by the idea that economic growth is the key
The objective of this paper is to make an economic development and economic growth comparison of these four countries. The comparison will be multi-faceted. It will compare monetary perform...
Economic development is a term that economists, politicians, and others have used frequently since the 20th Century. The concept, however, has been in existence in the West for centuries. The term refers to economic growth accompanied by changes in output distribution and economic structure. It is concerned with quality improvements, the introduction of new goods and services, risk mitigation and the dynamics of innovation and entrepreneurship.