Economic Growth and Sustainable Development

Running head: ECONOMIC GROWTH AND SUSTAINABLE DEVELOPMENT 1
Economic Growth and Sustainable Development
Name
Institution

ECONOMIC GROWTH AND SUSTAINABLE DEVELOPMENT
2
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.
Moreover, the factors of production are also interpreted by countries as machines, management,
labor, materials, knowledge and technology. Scholars as being probable production factors
causing economic disparities between countries have lately considered each of these factors of
production. The current description of production factors is drawn from a neoclassical standpoint
of economics. 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 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

ECONOMIC GROWTH AND SUSTAINABLE DEVELOPMENT
3
land can is a crucial element of majority of the countries, its significance can increase or
diminish according to an industry (King, R. G., & Rebelo, S. 2013). 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 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 (Aisen, A., & Veiga, F.
J. 2013). 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. Another
crucial element of the labor market is the employee’s mobility that it entails. In theory,
individuals in the USA travel anywhere to train or find for a new position. The mobility is crucial
when workers complement their skills to the openings of jobs (Rebelo, S. 2011). In practice,
nevertheless, individuals in a country may be reluctant to train for a new career. In these
scenarios, the output of the economy and the mobility in the labor market decelerate in a county
as jobs go unfilled and people remain unemployed. The market of labor functions to discover
better matches between jobs and employees (Lopez, R. 2014).

ECONOMIC GROWTH AND SUSTAINABLE DEVELOPMENT
4
Employees in a country look for positions that offer desirable characteristics and better
salaries; whereas employers in a country pursue employees who will work for the salary offered
and will search for workers who are productive. Particular conditions of the economy in a
country can make it hard for businesses and people to match their labor market searches (King,
R. G., & Levine, R. 2014). In a country that has a swiftly growing economy, for instance, some
countries may experience hardship in getting adequate people with the correct skills to meet up
with the intensifying demand leading to disparities in the economy. The issue of unemployment
is crucial in a country and the labor market. To be legitimately recognized among the
unemployed in the United States, an individual is supposed to be actively looking for a job, out
of work and ready to accept a job according to the salary being provided. The rate of
unemployment in a country determines greatly the economic growth of a country and can lead to
economic disparities between countries.
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 GROWTH AND SUSTAINABLE DEVELOPMENT
5
economic disparities between countries. Whereas entrepreneurship is significant for the growth
of the economy in different countries, the effect of diverse forms of entrepreneurship pointers on
the Growth Domestic Product is not even. For example, the activity of entrepreneurship
(consisting of business indicators necessity and formations based entrepreneurship) has an
adverse impact on growth in low or middle-income nations. Nevertheless, entrepreneurship
attitudes (intentions, perceptions and role models) have positive influence on the Growth
Domestic Product in countries that have high income. This difference between developing and
developed economies causes economic disparities between countries. Entrepreneurship attitudes
are insignificant in explaining economic growth in the middle/low income economies but
positive and important for high-income economies. High-income economies entrepreneurs may
be more internationalized, innovative and growth focused than low or middle-income
economies’ entrepreneurs. Necessity entrepreneurs, normally borne from a lack other options of
employment, are dominant in low or middle-income countries. Moreover, the unemployment in
the United States is lower than in Zimbabwe with only individuals that have not attained
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

ECONOMIC GROWTH AND SUSTAINABLE DEVELOPMENT
6
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 (Mattoo et al, 2019). 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.
Table 1 shows the labor force in the United States. According to the table below the rate
of unemployment is lower, with six hundred and ten being the highest for individuals that have
undergone less than high school diploma. As the level of education goes higher, the probability
of employment goes high (Lehrer, E., & Nerlove, M. 2016). Most of the population in the United
States have attained the minimum required education, which is the high school level (Juhn, C., &
Potter, S. 2016). 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