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What Factors Promote Strong Economic Growth?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 02 September 2016
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Economic growth is important to the well-being of any national economy, and often requires deliberate actions that help to promote that growth. There are a number of factors that can go into the promotion of strong economic growth within a local, regional, national, or even global economy, and many of these factors having to do with the structure of the business cycle and the efforts to improve the standard of living for consumers. Factors such as competition, the cultivation of new markets in emerging nations, innovations in technology, and investment in foreign concerns can all come together to create economic growth.

One of the more common elements that goes into stimulating strong economic growth is healthy competition within the marketplace. Here, the focus is on creating and marketing goods and services that are likely to appeal to consumers, who in turn generate a demand for those products. Manufacturers move to meet that demand with a supply of the products, making sure to balance the need to generate profits off each sale with the necessity of making sure the products are affordable for the targeted consumer groups. The end result is that the economy is stimulated by the brisk sales, more people are put to work making the products, and those employees are able to buy other goods and services thanks to the steady income.

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New technology can also do a great deal to stimulate strong economic growth. Innovations with existing products that help to increase the demand, or even the creation of new products that capture the attention of the buying public can often reverse a downward trend in an economy by creating more jobs and improving the flow of cash throughout the entire economic system. Under the best of circumstances, the gains made with the new or improved products easily offsets the loss of jobs related to other economic sectors that are now considered obsolete, allowing the economy to move forward rather than regressing.

Investments in new markets can also do a great deal to spur strong economic growth. Choosing to invest in emerging international markets can have a very positive effect, especially in terms of promoting both imports and exports that add to the financial well being of all the nations involved. By supporting those emerging markets, the potential for creating allies who in turn enter into mutually beneficial trading situations with the investors can help to provide a great deal of economic stimulation that triggers a trickle-down effect for a number of related industries.

Nations tend to monitor what is happening within the economy and take steps to use legislation in a manner that helps to reverse undesirable trends and promote economic growth. Often, these efforts do not yield results over night, but can make a huge difference in the state of the economy over a period of a few years. By identifying potential threats to the economy, it is possible to create strategies that impact trade and production, ultimately helping to minimize any negative factors while encouraging other factors that aid in strong economic growth.

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