Economic Growth and Sustainable Development

This presentation provides a theoretical overview of the factors of production and their role in economic growth and sustainable development. It discusses the importance of land, labor, entrepreneurship, and technology in shaping the economies of different countries. The presentation also includes a case study comparing Zimbabwe and the United States.

1
ECONOMIC GROWTH AND
SUSTAINABLE DEVELOPMENT

Part A: Theoretical Overview
Factors of Production
•Production factors is an economic term that depicts the inputs utilized in the production of services or goods in order to make
an income. The factors of production comprise any resource required for the making of a service or good. The factors that are
responsible for economic disparities in a country comprise of labor, entrepreneurship, capital, and land.
•The modern description of factors of production merges previous approaches to economic theory, for instance the concept of
labor as a production factor from socialism, into one description. Labor, land and capital as production factors were formerly
identified as production factors. Early economists of politics for instance David Ricardo, Adam Smith and Karl Max recognized
Labor, land, capital as production factors were initially.
•Up-to date, labor and capital continue to be the two key inputs for the generation of profits and productive processes in a
country.

Land as a factor of Production
•Land as a factor of production has a wide description as a production factor and can take on several forms, from a commercial
real estate to an agricultural land to the available resource from a specific piece of land. Growing up of crops on a land by farmers
elevates its utility and value within a country.
•Land was responsible for generating value, for a group of early French economists referred as physiocrats who predated the
classical economists of politics. Whereas land can is a crucial element of majority of the countries, its significance can increase or
diminish according to an industry.
•For instance, an country that is highly developed in technology can effortlessly start operations with no investment of land.
Moreover, land is the greatest significant asset for a country and can contribute to economic disparities between nations depending
on the size of the land.

Labor as a factor of Production
• Labor is another factor that affects economic disparities between countries. It term
labor refers to the energy consumed by a person to bring a service or product to the
market.
• Labor can take different forms, for instance a waiter who serves guests is part of labor
as the construction worker at a hotel site or the receptionist who joins them up into
the hotel. A crucial element of labor market is the input made by the exceptional
abilities and skills of all kinds of individuals.
• These talents can be enhanced and changed through training or education, making
the labor force a developing talent collection from which industries recruit. Utilizing
skills efficiently and teaching individuals in a country to cope with new marketplace
demands help make the production process more effective. How a country utilizes its
labor force affects its economic growth together with economic disparities between
countries.

Entrepreneurship as a factor of
Production
• Many nations undergo intensifying inequality of income and employment that is
stratified. Notwithstanding these two corresponding trends of the economy, research that
examines the direct link between overall workforce inequality and entrepreneurship
continues to be negligible in the still fundamentally dispersed literatures on inequality
and entrepreneurship.
• Many studies in the have recorded a two –extended influence of entrepreneurship on the
individual income, in the entrepreneurship literature, debating that entrepreneurship is a
source of improved mobility of income for some countries but translates to a lesser –than
average incomes for the broader portion of the workforce that is self-employed.
• Nevertheless, attentiveness to the probable implications of the patterns for a macro level
distribution of income has been negligible in the in the literature of entrepreneurship.
Entrepreneurship is a progressively prevalent professional choice in economies of many
countries that leads to economic disparities between countries.

Technology
• Change in technology is the “growth engine” in developed countries. Moreover, the
uninterrupted increasing rate of evolution on technology is another issue that leads to
economic disparities between nations. Thus, the contending explosive hoarding of capital
and stagnation of production is the second greatest characteristic of many countries.
• Technology unlocks the predicts for a country’s welfare: it generates extra possibilities for
producing new products and services, strengthens automation, enhances the efficiency of
information communication and management, and reduces transportation costs, thus
leading to economic disparities between countries.
• Generally, technology intensifies labor productivity straightforwardly or not, resulting at the
same time to the inauguration of present markets, spatially and in form of the
differentiation of product in a country. Intensified labor sharing and increased productivity
expedited by the increasing of global trade broadens the prospects for social and personal
progress within a country.

Continuation
•Countries engaged on an economy that is globalized may become
more, richer, successful and educated.
•Moreover, the development of artificial robots and intellect and the
progress on technology provoke an exaggerated reduction of the
intensity of labor and increase exponentially the productivity of labor.

Part B: Application of
theoretical insights to a pair of
countries.
•The two countries that will be discussed in this paper are Zimbabwe and the United States. Zimbabwe is a poor country with Growth Domestic Product being
very low while United States is a rich country with its Growth Domestic Product being extremely higher than that one of the United States.
•The economic growth of the United States is innovation driven. The country has a Growth Domestic Product of fifty-two thousand six hundred and seventy six.
United State is placed as the first country in the World in terms of economic growth
•Most of the population in the United States have attained the minimum required education, which is the high school level . This implies that most of the
population are employed in white-collar jobs that are well paying leading to a higher economic growth in the United States than in Zimbabwe where the percentage
of people who have attained high school education is minimum. The participation rate in the labor force in the United States is extremely high in the United States
with figures ranging from 40-50 percent of the population.
• This increased involvement of workers in the United States in its labor force ensures there is adequate workforce to steer the economy of the country ahead. For
Zimbabwe, the participation rate of works in labor force is slightly minimum compared to the United States due to increased rates of unemployment in the country.
• This makes USA to experience a higher economic growth than the United States thus causing the disparities in the economy between the two countries

Continuation
• . For the population that is economically active in Zimbabwe, the
greatest percentage of the labor force (fifty-four %) comprised of
workers involved in farming and communal work followed by paid
workers that were on a permanent basis at fourteen%.
• Forty-nine % of the labor force that comprised of males were own
account employees (resettlement and communal farming) twelve %
were own account employees (other) and twenty percent were paid
workers in job that are permanent.
• Concerning the female in the labor force in Zimbabwe, fifty-nine percent
were own account employees (resettlement and communal farming)

Continuation
• When it comes to technological advancement, Zimbabwe Statistic Agency presented a report that indicated that
surveyed 7955 institutions around Zimbabwe.
• Of the institutions surveyed 2341 were secondary schools, 5569 are primary schools and sixteen are universities.
• The survey indicated that the level of access to mobile phones considerably low in Zimbabwe. Out of the 7955
institutions surveyed, only three thousand four hundred and ninety four institutions had access to a mobile
phone. That denotes forty four percent of the institutions in the Zimbabwe, which is considerably minimal.
• In the United States of America, smart phones, cell phones, tablets, social media, and other inventions from the
current era all portray a rapid rate of adoption of technology in the United States. The tablet computer that went
from about zero percent to fifty percent adoption in 5 years was the most standing out technology in the United
States (National Center for Health Statistics US. 2010).
• In the United States, the rate of adoption of a technology is faster which is because the current technology
experts require minimal infrastructure in contrast with cable lines, electricity grids, water pipes and telephone
wires that had to be fitted throughout the twentieth century. The high rate of technological adoption rate in the
United States makes the rate of economic growth in the country to grow at a faster rate as compared to
Zimbabwe

Continuation
• United States is positioned first out of one hundred and thirty seven organizations registered on GEDI (Global
Entrepreneurship and Development Index) according to a study conducted in the year 2018. In most instances,
entrepreneurs are innovators, and large majorities of Americans always desire to commence a business every year
notwithstanding the risks in the United States.
• This makes the country to experience a rapid economic growth since most of its population is composed of entrepreneurs.
Nearly 21.9 percent of the small entrepreneurial ventures in the United States have utilized family and personal savings to
start their ventures whereas 5.7 percent have utilized entrepreneurial assets and profits, and eight percent have utilized
business credit cards and loans from the banks in the United States.
• Zimbabwe is a nation with wide resources usually referred as “the land flowing with milk and honey”, however, the nation
has many prospects that are yet to be exploited.
• Notwithstanding the fact that many individuals in the nation are suffering from high rates of literacy rate, most of the youths
carry on to endure devastating standards of living linked with immorality and a bedrock of unemployment. Entrepreneurs in
the country continue to undergo the following challenges when it comes to entrepreneurship, which include cultural and
social attitudes, mismatch between skills and industry requirements, limited start-support schemes, regulatory and complex
legal environment and limited access to affordable finance
• All this challenges makes it difficult for the population in Zimbabwe to undertake entrepreneurship easily. Therefore, this
affects the rate of economic growth in Zimbabwe making it to move slowly as compared to the United States that experience
a rapid rate of economic growth.

Part C. Policy Recommendation
•To ensure Zimbabwe is in the same position as United States in terms of technology, the government of Zimbabwe should invest greatly on
technological infrastructure such as expanding its internet access for to reach more people in the country and ensuring most of the places in the
country are connected to electricity.
• This makes it easy to utilize technological equipment when electric power is available . The government can also try to offer lower price
mobile phone to its citizens so that even individuals that are not financially stable can be able to purchase.
•The government of Zimbabwe should also strive to ensure it provides its citizens with a good environment to allow its citizens start
entrepreneurial ventures. The government should try to eliminate mismatch between skills and industry requirements, limited start-up support
schemes, regulatory and complex legal environment and limited access to affordable finance.
• By eliminating this, the citizens in Zimbabwe will be able to engage in entrepreneurial ventures and thus will lead to an increased economic
growth similar to that one of the United States

References
• Aisen, A., & Veiga, F. J. (2013). How does political instability affect economic
growth?.
European Journal of Political Economy,
29, 151-167.
• Chitsike, C. (2018). Culture as a barrier to rural women's entrepreneurship: Experience
from Zimbabwe.
Gender & Development,
8(1), 71-77.
• Dixon, R. B. (2012). Women in agriculture: Counting the labor force in developing
countries.
Population and Development Review, 539-566.
• Fallon, P. R., & Lucas, R. E. (2011). The impact of changes in job security regulations in
India and Zimbabwe.
The World Bank Economic Review,
5(3), 395-413.
• Juhn, C., & Potter, S. (2016). Changes in labor force participation in the United
States.
Journal of Economic Perspectives,
20(3), 27-46.
• King, R. G., & Rebelo, S. (2013). Public policy and economic growth: developing
neoclassical implications.
Journal of Political Economy,
98(5, Part 2), S126-S150.