Factors for Economic Development

Factors for economic development

1. Land is a natural resource, which includes the surface of the earth, lakes, rivers and forests. It also includes mineral deposits below the earth. Land provides space where production can take place. Industries that depend on land include all extractive occupations such as farming, mining, quarrying and fishing. All these economic activities contribute a lot to the national income. Land is a valuable factor.

2. Labor refers to human resource, the basic determinant of which is the nation's population. It is any mental (intellectual) or physical efforts of human beings made for any material benefit. Labor is the primary factor of production.

3. Infrastructure is the whole web of facilities, which need to be in place for productive industry to flourish. Infrastructure includes roads, railways, gas, schools, electricity, telephones, water, sewerage systems and others. Infrastructure is important for economic development. The goods produced have to be transported from the production place to the marketing area. If supply will be low then sales will not be good.

4. Entrepreneurship Land, labor and capital need to be organized in order to produce. The person who organizes the business is known as an entrepreneur. An entrepreneur is a person who is responsible for the profit and loss of the business. He/she is the risk taker. An entrepreneur is important in economic development because he or she provides the funds necessary to bring together the other factors of production. The entrepreneur has to employ labor, buy or rent land and arrange capital. He or she bears the risk of the business.

5. Technology is the way people use resources to meet their needs and wants. This includes tools, machines, materials, techniques and the process used to produce goods and services to satisfy their needs. Technology is composed of hardware, software and technical know-how. Hardware is the physical structure and logical layout of equipment or machinery that is used to carry out the required needs.

6. Education is a vital aspect in production. The quality of labor is a major source of potential growth. Efficiency of labor depends very much on education and training. A worker must have basic skills of reading and writing. They are important to the functioning and productivity of an economy. Developing countries have made a huge effort to provide university primary education for all children.

7. Good governance refers to the exercise of power of the state in managing the country's social and economic resources. It also relates to accountability, rule of law, transparency and citizen participation. The government is responsible to see that there is peace in the country so that people perform their duties harmoniously.