The interrelated factors that influence directly the rate of economic growth is an increase in the real gross domestic product of an economy. There are various determinants of economic growth. Listed below are some of the crucial factors that determine the rate of economic growth of a country:
Availability of Human Resources
This refers to one of the essential factors of the economic growth of a country. The availability of the quality and quantity of human resources can directly affect the rate of economic growth. The quality depends on its skills, training, creativity and innovations and the level of education. If a country has a skilled and trained human resource to do farm jobs NZ, then the output rate of economic growth will be higher. In contrast, a shortage of skilled human resources and less significance hinders the growth of an economy. Thus, a country should be provided with an adequate number with the required skills and abilities of human resources to achieve better economic growth.
Amount of Natural Resources Available
They involve resources that naturally exist. Natural resources exist either on land or beneath the earth. They affect the economy of a country to a greater extent. On land, the resources include; water, plants, and landscape. Underground resources we have; metals and non-metals, oil, natural gas, and minerals. The climatic and environmental conditions determine the natural resources of a given county. Countries with a lot of natural resources enjoy better growth in the economy than countries with a small number of natural resources. Proper utilization or exploitation of such resources depends on the abilities of human resources, technology, and availability of funds. A country with a skilled and educated workforce with precious natural resources drives the economy on the growth path.
Availability of Capital
This ranges from land, machinery, power, transportation, building, and medium of communication. The acquisition of all these humanmade products is referred to as capital formation. It increases the availability of capital per worker and consequently increases the capital/labor ratio. The productivity of labor increases as a result, which ultimately leads to the rise in output and growth of the economy.
A Country’s Level of Technological Development
It is a critical factor that affects the growth of an economy. It involves the application of scientific methods and production techniques. Technology can also be regarded as the nature and type of technical instruments used by a given amount of labor. Increased technology in a county helps in increased productivity with a limited amount of resources. Countries improved technological developments tend to multiply compared to countries that have less focus on technological development. The selection of the right technology also plays a crucial role in the growth of an economy. However, lack of appropriate technology can result in a high cost of production.
As a matter of fact, social and political factors contribute significantly to the economic growth of a country. Social factors include; customs, traditions, values, and beliefs, and they contribute to the growth of an economy to a considerable extent. For example, having a society with conventional beliefs and superstitions may hesitate to adopt modern ways of living line new farm jobs NZ, making it difficult to achieve development. On the other hand, political factors, like participation of government in formulating and implementing various policies, can also have a significant part in economic growth.