Economic Growth and Sustainable Development

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.