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What Causes Rapid Economic Growth?

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  • Written By: Esther Ejim
  • Edited By: Kaci Lane Hindman
  • Last Modified Date: 05 September 2016
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The causes of rapid economic growth refer to the variables that can lead to an appreciable growth within the economy of a region. A number of factors can contribute to rapid economic growth, including general growth in the population and a corresponding growth in human capital. Innovativeness in the development and utilization of technology and its corresponding effects also contribute to rapid economic growth in a region. The presence of natural resources helps in rapid economic growth, depending on the manner in which the natural resources are harnessed and applied toward the development of the economy of the region.

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Human capital is a chief factor in rapid economic growth, and this is represented by the reservoir of knowledge and experience that is deposited within the people who make up the members of the society under consideration. This phenomenon can be seen in the manner in which societies with well-educated and properly trained citizens excel more in different aspects of development, including economic, than regions that do not have these benefits, such as a well-educated populace. Human capital considerations are also apparent in the general health and wellbeing of the members of the society, which leads to a reasonable greater expectation of life and an increase in the number of people in such a society who contribute to its progress. When the members of the society are healthy and well-trained, they will serve as a source on which the economy can depend for the provision of labor, as opposed to societies that lack an adequate supply of labor and have to depend on immigrants or other forms of imported labor.

Another factor that is a vast contributor to rapid economic growth is the discovery of natural resources in the form of minerals or other forms of resources that include precious stones and metals. In this instance, the natural resources will serve as a vehicle for the development of that economy through the sale of the same and the application of the profits derived from that sale toward infrastructural development and other projects that will further facilitate economic growth. For instance, a country that is blessed with an abundance of crude oil might sell the oil and use the money derived from the sale to build good hospitals, build good schools, hire good teachers, develop the communication infrastructure among other approvements that will help the country develop further.

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turquoise
Post 3

If we look at the countries with sustainable and rapid economic growth, it's countries like Germany and Japan. What both have in common is that they're very productive. Germans and Japanese are both extremely hard working. They're innovative and the people put in more work hours than people in most other countries.

Economic growth is about productivity. The more production there is, the more people can spend. Both of these come together to cause rapid economic growth.

serenesurface
Post 2

@SteamLouis-- I don't know but I think that economic growth does tend to be slower in developed nations, for the reason you've mentioned already.

Rapid economic growth, growth that occurs suddenly and quickly is usually caused by better use of natural resources or some kind of innovation. In regards to technology, I think that will always be a factor for rapid economic growth in all countries. But when it comes to resources, it is true that developed nations are already aware of their resources and have figured out efficient ways to use them.

So developing nations will tend to be ahead of others with their annual GDP rates. But it's not permanent, it never is. After a point, growth starts slowing down in general.

SteamLouis
Post 1

Is it true that developed countries can't have rapid economic growth because they already use their resources wisely? Is rapid economic growth specific to developing nations?

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