Concepts of Economic Development - Economic Growth
The production of goods and services in a nation during a given period (usually one year) is termed as its Gross Domestic Product (GDP). This product is composed of contributions from agriculture, industry, services and the management sectors. They are referred to as the primary, secondary, tertiary and quaternary sectors. Any increase in the production of commodities and services in any of these sectors from one year to the next year is known as sector-specific growth. The overall increases from all sectors to the economy is known as economic growth. Hence, economic growth is the increases in GDP from one base year to the next year.
Note:
1) Land, labour, Capital and Organisation along with technology are considered to be the factors of production. A higher level of technology is mediated through a higher volume of skills in the labour force. Higher the skills in the economy, higher is the level of production. For the same time spent by labour, efficiency of production increases with increasing skills. This is how education contributes to economic growth.
2) If there is no increase in production from one year to the next year and alternatively if there is decrease in total production, it is termed as negative growth.