In this article, I will tell you about the features, characteristics, obstacles, and factors of economic development.
Features / Characteristics of Economic Development
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The features of economic development are also known as characteristics of economic development. It includes various points such as:-
1. It is a continuous process-
Economic development is a continuous process. Every economy implements economic programs and plans for economic growth and development. A temporary increase in national income due to some special reasons does not mean economic growth and development. Development is a term of the long run and not a temporary process.
These plans ensure better utilization of resources (whether it is human, material or financial resources) results in increasing demand and supply of goods and services which in turn increases national income.
2. It increases national income-
Economic development results in increased per capita income which helps to increase the national income. If the income of a particular person is increasing then the national income of a country is automatically increasing.
3. Improve the standard of living-
Since the per capita income increases, the purchasing power of an individual increase which will result in the consumption of better quality of products and services. Thus, the standard of living of an individual is raised.
4. Economic Development utilizes national resource property-
In this features of economic development, it helps to ensure better utilization of national resources with the help of economic growth and economy can exploit the natural resources, human resources, and the physical resources to the fullest potential.
5. It results in a high degree of structural transformation-
Economic development is resulted in the high degree structural transformation from agriculture to manufacturing and finally the emergence of the service sector.
Agriculture which was the dominant occupation nowadays is replaced by services contributing to more than 50% of the national income.
6. Results in social economic equality-
Economic development has resulted in social and economic equality in status, opportunity, wealth, income, profits, and standard of living.
Obstacles to Economic Development
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It includes various obstacles to economic development such as:-
1.Market imperfection and underutilization of resources-
Factor immobility, price rigidity regarding ignorance of market condition, lack of specialization of resources getting underutilized is the main obstacle to economic development.
If an economy does not have economic growth, then its main causes are its resources because if the resources are not properly utilized then it will not be able to do work properly.
2. Lack of demand-
There can be a lack of demand which may due to low purchasing power because due to poor income.
3. Underutilization of resources-
There may be a problem in which the national resources, human resources, and physical resources are utilized in a minimum way of extent. This object of obstacles arises only in developing or under-developed countries.
Factors of Economic Development
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The factors of economic development will be divided into two factors-
- Economic Factor
- Non-Economic Factor
1.Economic Factor-
This is the first major factors of economic development and it includes various points such as:-
(i) Population-
It can affect the process of economic development. It is a necessary population should be educated, skilled, employed, have a high rate of nutrition so that people can contribute to the path of economic development.
(ii) Natural Resources-
The availability of forecast, mineral, water resources. Facilities like communication, transportation, warehousing have resultant into economic progress.
(iii) Technical Resources-
In this factors of economic development, the growth of the technical facilities have resulted in improved production at affordable prices even there has been increasing in research and development activity, etc.
(iv) Capital Formation-
The economic development of a particular country totally depends upon the availability of capital”. Capital formation means the rate of savings and investment of a country. Savings are necessary for augmenting the production capacity or capability of a nation.
(v) Increase in Entrepreneurial Ability-
Entrepreneurial ability is the ability where a businessman is capable of taking risks and he deals with innovation.
(vi) Government Policies-
It affects economic development and it includes monitory, fiscal, foreign trade, industrial policies, and so on.
2. Non-Economic Factor-
This is the second major factors of economic development and it includes various points such as:-
(i) Social Factors-
It includes all factors consistency of attitude of people to work, social environment, the attitude of society towards change and development etc. These factors affect the rate of capital formation and also economic development.
(ii) Political Factors-
It includes political stability, political attitude towards economies, economic development. Government behavior plays an important role in encouraging or discouraging economic activities.
(iii) Religious Factors-
It includes religious beliefs, feelings, and emotions of people. These factors play an important role in the economic development of a country.
(iv) International Factors-
It includes maintaining economic relations with other countries and has the benefit of foreign rate and capital. There can be the immunize possibility of exports and it may speed up the industrial and economic development.
So, these are the factors of economic development.
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