Sources of Economic Growth: There are basically six strategic ingredients in the growth of any economy some of these factors are related to the physical ability of an economy to grow and we any call them the supply factors in economic growth. These factors are as follows:
More detail on Economic Growth
1. Quantity and quality of human resources. The rate of economic growth is measured by the rate at which the left side of this equation, at full employment, increase over time. This in turn will depend in terms of the right side of the equations on the rate at which the numerator of the ratio, and full employment, increase in the total real GNP at full employment increases relative to the denominator. The faster the rate of increase in the total real GNP at full employment as compared to the rate of increase in population, the greater the rise in real GNP per capital at full employment and hence in the rate of economic growth.
2. Quantity and quality of natural resources (land):
The economic growth of a nation also depends on the quantity and quality of its soil, minerals, water, timber and so on. These are natural resources, which, in economics, are classified under the general heading of land as a factor of production.
3. Accumulation of capital:
An economy must also forgo some current consumption in order to build capital goods such as factories, machines, transportation facilities, dams, and educational institutions.
5. Rate of technological progress: An important qualitative factor influencing economic growth is the rate of technological progress. This is the speed in which new knowledge is both developed and applied to raising the standard of living.
6. Environmental factors:
It is important to say that the political, social, cultural and economic environment must be favourable if significant growth is to occur. This means, among other things that there must be a banking and credit system capable of financing growth.