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Economic development is the process of increasing output per capita, so potentially improving economic well-being. It is potential because well-being depends upon what the greater productivity is used for. Given the land area of a country, economic development can occur with increases in the quality and quantity of capital goods, and the quality of the labour force. Education and technological change are great driving forces of economic growth.
Less-developed countries can experience great strides in economic development by acquiring more and better capital goods as well as by more education and training of the labour force. They usually lack social-overhead capital, such as efficient transportation and communications systems, and need more as a prerequisite for growth. Economically developed countries already have a substantial capital base and tend to rely more upon invention and discovery, translated into innovation, as the sources for further development. TF
Further reading Alexander Gerschenkron, Economic Backwardness in Historical Perspective; , W.W. Rostow, Stages of Economic Growth. |
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