importance of non economic factors in economic development

It has resulted in increased production of both consumer and industrial (Capital goods and services). Accordingly, Prof. Samuelson rightly observed that “High Invention Nation” normally attains growth at a quicker pace than “High Investment Nation”. In order to determine an optimum investment pattern, it is essential to consider various fruitful avenues of investment available in these countries. Home » Non-Economic Factors In India’s Economy: Great Adventures Of Modi Government Seen From Faraway Rome – OpEd. Prof. Krause has observed that, “Education brings revolutions in ideas for economic progress.” Education provides stimulus to economic growth as it teaches honesty, patriotism and adventure. Investing time and effort in an effective booklet to attract quality suppliers is an important task undertaken by purchasing-design teams. Growing population also results food problem, unemployment problem which forced the country to divert its scarce resources to meet such crisis. Moreover, due to the lack of spirit of experimentation and proper Research and Development (R&D) facilities, these underdeveloped countries fail to transform their production system to the desired level. On the other hand, the share of total labour force engaged in the services sector remained almost constant and relatively poor in the countries like Australia, Great Britain, Sweden and Belgium. This in-house relationship is essential for continued support and business by the suppliers. This is a simplified version of Harrod-Domar Model. It is spirit itself that builds the body.” Prof. Ragnar Nurkse has further observed, “Economic development has much to do with human endowments, social attitudes, political conditions and historical accidents.”. Economic factors alone are not sufficient for determining the process of economic development in a country. Removal of market imperfections is considered a very important pre-requisities for economic development as such imperfections create a lot of obstacles in the path of economic development of underdeveloped countries. The buyer should share information on projected annual quantities along with the products’ projected life cycle with the suppliers in order to develop the best manufacturing methods and processes. One of these triumphs lasted so long, and he was so bored, that he declared to his friends, “it is the revenge of my peasant ancestors for having had the bad idea of ​​having accepted the triumph”. Pre-Requisites or Need 5. Others have suggested that really four distinct types of economies can now be found among the developing nations of the world: (a) newly industrialized nations in Asia, (b) relatively highly educated Latin American nations, (c) large continental economies such as India and China, and (d) marginal rural economies found in Asia, Africa, and Latin America. Thus Prof. Ragnar Nurkse has rightly observed, “The meaning of capital formation is that society does not apply the whole of its current activity to the needs and desires of immediate consumption, but directs a part of it to the making of capital goods—tools and instruments, machines and transport facilities, plant and equipment.”. Some economists have recommended that dualistic models be created to address adequately the many distinct differences between economies on the two extremes of the development spectrum. Share Your PPT File, Public Sector Enterprises or Undertakings in India. Economic historians have pointed out that the personality type and behavior characteristics of last-century business leaders bears little resemblance to their counterparts of today. Firstly, population provides labour and entrepreneurship as an important factor service. But the economy of underdeveloped countries is now facing serious threat from large scale disorder, terrorism, disturbances in the international border etc. In this respect population is working both as a stimulant as well as hurdles to economic growth. 0000000016 00000 n Economic development implies an improvement in economic welfare through higher real incomes and other welfare indices such as improved literacy, better infrastructure, reduced poverty and better health care. T.W. @�JL Naturally, in the initial period, it is not possible to step up the rate of capital formation at the required rate by domestic savings alone. The key to development lies in men’s minds, in the institution in which their thinking finds expression and in the play of opportunity on ideas and institution.”, Again Prof. Macord Wright writes, “The fundamental factors making economic growth are non-economic and non-materialistic in character. The quality … For example, it is estimated that only about half of the GNP in developing nations is comprised of the share of earnings from labor vs. a range of 60–70 percent in highly industrialized nations. Other social scientists, mostly sociologists, social-psychologists, business historians, and anthropologists, tend to see entrepreneurship as a more problematic phenomenon, deeply embedded in societies and cultures; they focus on the influence of, and the mutual interplay among noneconomic factors, such as cultural norms and beliefs, class relations and collective action, state intervention and control, organizational structures, bounded solidarity and trust, deviant behavior and marginality status, and motivations for achievement. ECLA, the Economic Commission for Latin America, has repeatedly flagged the importance of land reform in the process of poverty-reducing agriculture and rural development. 0000002491 00000 n Essay # 1. In the long-term, non-economic factors may be the pivotal factors; (b) identifying mutual problems and arriving at reasonable and usable solutions. Again Mrs. U.K. Hicks opined, “Economic Development deals with the problem of underdeveloped countries whereas ‘Economic Growth’ deals with the problem of developed countries. Share Your Word File Moreover, capital-output ratio along with national savings ratio can determine the rate of growth of national income. %%EOF <<3df1ad86ac67a44a8c64bce816e21e9b>]>> Planning is also essential for mobilisation of resources, capital formation and also to raise the volume of investment required for accelerating the pace of development. How to distribute resources in society. Free market economists, such as Milton Friedman argue the openeness of an economy is important. 0000001344 00000 n Being a technologically backward country, India has decided to permit foreign direct investment in order to imbibe advanced technology for attaining international competitiveness under the present world trade and industrial scenario. Jacob Viner stated in this connection, “Population growth in a backward country does not induce capital widening investment or innovation. Produced naphtha is used to produce petrochemicals, for example, para-Xylene (PX), which is also an important factor on the supply of naphtha. 0000007058 00000 n Moreover, market created in the foreign country is also working as a useful stimulant for the expansion of both primary, secondary and tertiary sector of the country leading to its economic development. But Vespasiano, despite having been the initiator of a dynasty, those of the Flavians, is remembered for a revolution of enormous economic significance that economy history books do not mention: the institution in the Eternal City and everywhere in the empire of toilets.

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