To begin with, successful countries need not follow the same path. Britain, for example became the world economic leader in the 1800s by pioneering the Industrial Revolution, inventing steam engines and railroads, and emphasizing free trade. Japan, by contrast, came to the economic growth race later. It made its mark by first imitating foreign technologies and protecting domestic industries from imports and then by developing tremendous expertise in manufacturing and electronics.
Even though their specific paths may differ, all rapidly growing countries share certain common traits. Indeed, economists who have studied growth have found that the engine of economic progress must ride on the same four wheels, no matter how rich or poor the country. These four wheels or factors growth are:
1. Human resources include labor supply, education, discipline and motivation.
2. Natural resources include land, minerals, fuels and environmental quality.
3. Capital formation, which includes machines, factories and roads.
4. Technology, which include science, engineering, management and entrepreneurship.
Often, economists write the relationship in terms of an aggregate production function, which relates total national output to the inputs and technology.
Even though their specific paths may differ, all rapidly growing countries share certain common traits. Indeed, economists who have studied growth have found that the engine of economic progress must ride on the same four wheels, no matter how rich or poor the country. These four wheels or factors growth are:
1. Human resources include labor supply, education, discipline and motivation.
2. Natural resources include land, minerals, fuels and environmental quality.
3. Capital formation, which includes machines, factories and roads.
4. Technology, which include science, engineering, management and entrepreneurship.
Often, economists write the relationship in terms of an aggregate production function, which relates total national output to the inputs and technology.