Economic growth is measured either in a specific country or in a geographical area that includes several countries, such as the European Union, and economic growth means an increase in the production of goods and services during a specific period of time compared to the previous time period, and this is usually calculated either annually, semi-annually, or quarterly. If the country is going through a state of economic growth, it is necessary to calculate the gross domestic product, which is the value of all goods and services that were produced inside the country, whether they were sold inside or outside, and all the country’s imports are subtracted from it, and this is in its simplified sense, where it can be By comparing the value of the GDP for a certain period with the period preceding it, you can tell whether there is economic growth or not. It is worth noting that economic growth does not occur on its own, as there are several factors that help make this happen, and this will be the topic of our article.
What are the factors causing economic growth?
The following are the most important factors that affect economic growth, whether positively or negatively:
Human resources
Human resources are considered double-edged factors, as the availability of a large number of highly qualified workers can lead the economy to growth, and their abundance leads to an increase in production, while the presence of highly qualified labor and excellent experiences increases the quality of products and consequently higher sales. On the other hand, if it is not available, as we mentioned, the economy is subjected to deflation and decline.
Natural Resources
It means all the resources that are obtained, whether they are on the surface of the earth or inside it. Examples of the resources on the surface of the earth are water, plants, and vast natural spaces. As for the resources that are below the earth, they are represented in oil, natural gas, minerals, and non-metallic materials that are used in industries, and it is worth noting that natural resources have a significant impact on the economic growth of any country. helping economic growth.
Technological development
Technology is no less important than natural and human resources in terms of economic growth, where technological progress helps to increase production within the country in addition to producing goods and services of high quality. Technological development is intended to use the application of science in the production process, which may be represented in the machines used. or modern farming methods, etc.
Social and political factors
The nature of society is greatly reflected on economic growth from several aspects, and this can be illustrated through a simple example. Assuming that society is based on simple and traditional beliefs and tends to believe myths, it is usually strongly opposed to development and living in modern ways, and this in turn is reflected in the development of the economy. On the other hand, the state’s massive intervention and the issuance of laws restricting production operations and the wheel of the economy are among the most prominent factors that impede economic growth, while the government’s tendency to liberate the economy from restrictions contributes to its prosperity and growth.
Infrastructure
Infrastructure is the basis for the development of the state as a whole, especially the economy, as the state’s possession of a good infrastructure that meets all the requirements of economic work within it helps and supports economic growth. Examples of infrastructure that supports the economy are the road and transportation network, communication networks, oil refineries, and health care. health, financial institutions, and education.
Read also: The types of expenditures of the Islamic state?