10 Characteristics of Economic Development, its Features and Benefits

We explain what economic development is, the advantages that this increase in well-being brings and what are its main characteristics.

What is economic development?

Economic development refers to the persistent increase in the well-being of a population , which in turn depends on the sustained increase in aggregate production over time .

The latter is known as economic growth, and in fact economic development and economic growth are often expressions that are used interchangeably, but it is worth noting that they are not identical concepts, since economic development is somewhat more complex since it includes the quality of life , especially the satisfaction of the needs of the members of that community .

In other words, economic development is the ability to generate wealth in order to promote and maintain the prosperity of the inhabitants of a country or region.

Characteristics of economic development :

1. GDP increase

The Gross Domestic Product is a fundamental economic indicator, which marks the monetary value of all final goods and services . When there is sustained economic development, GDP grows.

2. Increase in income or income per capita

This economic indicator represents the gross domestic product (GDP) divided by the total number of inhabitants of a nation . In countries with high population growth, GDP must grow at an even higher rate to allow economic development.

3. Importance of industrial production

In general, industrial activity has a multiplier effect on the economy , so this is the activity that pushes the most towards economic development.

You may be interested in: Manufacturing industry .

4. Lower weight of primary production

On the other hand, international prices are often determined by pressure from competitors and buyers, so there is usually more uncertainty for their commercialization.

5. Changes in the social structure

In developed economies there is a growth of the middle class , in which most of the subjects that support the economic-productive system based on the permanent consumption of goods and services are inserted , often through credit mechanisms.

6. Technological changes in production processes

Economic development requires investment in research and development , companies are interested in maximizing the efficiency of their production processes, in order to lower unit costs. Technological improvements are incorporated quickly, since there is an expectation of recovering the investment in the medium term.

7. Greater access to health and education

When there is economic development, society all benefits from economic growth , and if this is accompanied by adequate policies in terms of managing funds, it is possible to strengthen the health and education infrastructure , allowing all inhabitants to reach it.

8. Equal opportunities

When there is greater access to education and incentives for advancement, people are trained and in the long run improve their employment possibilities , of course, if this is accompanied by policies that encourage the creation of jobs . The educational level tends to present fewer asymmetries and opportunities tend to equalize when there is economic development.

9. Absence of unsatisfied basic needs

From the data taken in the national censuses, this index can be estimated, which considers the minimum needs in terms of housing, health services, basic education and minimum income. When there is economic development , the proportion of people with UBN is reduced .

10. Access to credit

To promote economic development, it is essential today to have access to credit . Legal certainty and clear and sustained economic policies are decisive to promote the taking of credit and investment.

The above content published at Collaborative Research Group is for informational and educational purposes only and has been developed by referring reliable sources and recommendations from technology experts. We do not have any contact with official entities nor do we intend to replace the information that they emit.