We live in an era of technology, which demands the complexity of business environments. Technology has slowly changed the world into a global village, where it became vital for each country to grow. The only way to live in peace and harmony is when each country struggles to grow and develop its economy. Growth can be defined as the increase in the per capita income of a nation. The development of a country is more complexed to understand compared to the growth of a country.
The variation in the economy of a country affects its prosperity. So, the economy of a country holds the most significant importance. The economy can help us to evaluate if a specific country is thriving or facing depression. When we generally talk about growth and development, it seems pretty similar to words. But when we add economy with these words, the meaning is changed for growth and development. Countries depend on the results of economic growth and development. Hence it’s vital to know how they work.
Quantitative Concept and Economic Development
A country’s economy usually refers to the growth in income and rise in consumption, saving, and investment. The income growth is just a reference to explain economic development in simple words. But there is much more than it in the economy of the country. Although “economic growth” and “economic development” sound similar, growth is a quantitative concept, and economic development is qualitative.
Today in this blog, we will find out the actual meaning/characteristics of growth and development, their functions, and differences.
What are growth and development?
Economic Growth is the rise in the production of goods and services per person in a country. This rise and fall can be measured to compare the economic growth from one time period to another. Economic growth also considers an increase by various factors like technology, human capital, labor forces, capital goods, and new territories.
Economic development of nations compares the living standards of a low-income economy nation and a high-income economy nation. Apart from calculating economic growth, economic development includes many other factors like market conditions, working conditions, health, education, and policies. The story of countries is poorly affected due to pandemics, wars, and several other factors. e.g., the recent coronavirus pandemic of 2019 is continuously affecting the development of countries till now.
What are the differences between Economic growth and economic development?
Let’s have a look at those bases on which we can compare economic growth and economic development.
1. Concept
Economic Growth is a smaller approach than economic development, which has a broader concept. Growth is an increase in the monetary value of an economy at a specific time. We can assume economic development as a sum of Economic growth as the standard of living.
2. Scope
The development is acknowledged as a Multidimensional aspect of an economy. The development concentrates more on the income of people and the enhancement of their living standard in a country. In contrast, the Growth of a country is viewed as a single-dimensional phenomenon as it just calculates the income of people in a country.
3. Term
The development of an economy is a long-term process compared to the growth of a country that looks at short-term effects.
4. Measurement
Economic growth is a quantitative measure, e.g., the actual gross domestic product. Economic Development is both quantitative and a qualitative measure. The examples are the human development index, literacy rate, infant mortality, poverty index, and gender index.
5. Related to
Economic development primarily focused on underdeveloped and developing countries. The developed countries look for economic growth.
6. Effect
The qualitative and quantitative development measures improve the life expectancy rate of infants, literacy rate, poverty rate, and mortality rate. These measures affect and have a significant impact on the economy of a country. Quantitative measures like per capita income and GDP have a substantial effect on the economy of developed countries.
7. Process tenor
The development of the economy is a continuous process, whereas the growth of an economy is for a specific time.
8. Government support
Developing an economy doesn’t require any support from the government as it is an automatic process. However, economic growth requires support and interference from the government as all the rules and policies related to development form by the government.
As we saw earlier, if you want to calculate the progress of a country, then studying its economic development tells a lot. However, clear and specific statistics of development can calculate the Economic growth of developed countries. There is not any comparison to both as they serve their target audience differently. Financial results show the condition and growth in developing countries whereas, economic development measures the progress of developed countries.
Economic development
Developing countries consider their Economic development as a vital part of the prosperity of their country, although they know it’s a long process. Developed countries prefer to look into their economic growth as they demand regular statistics for their nation’s income change. However, both functions measure the development of a country. But they choose different ways and mediums to calculate it. They are very similar and very different at the same time.
Countries often use economic calendars to measure economic growth and development together. It is essential to calculate economic growth as the calculation for economic development depends on it. Besides that, economic growth is not dependent on action.
Income and GDP
Considering this blog, we can say Economic growths is a part of Economic developments. Economic developments broader concept compared to growths. Because growth easy calculated with few indicators like income and GDP etc. A country always looks into its economic development for the well-being of its residents. In the end, we would
Like to clear this point of view that economic growths are not the only measure to describe the developments of a country. There is more to it.
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