Economic development: Understanding, indicators, factors, impacts, and objectives

In fact, what is economic development? This topic is quite often discussed on various occasions. This article will be a bit of a review on the understanding of economic development, objectives, influencing factors, and the impact for a country.

Development in economics is an economic process that aims to increase the income of the Percapita population or society in a country in the long term, accompanied by fundamental changes in economic structure and equitable Income for a country's inhabitants. The Economic development will make changes to the community, whether it is in the technological side, community mindset, or institutional.

According to Wikipedia, the sense of economic development is a process of raising total and per capita income through the calculation of population growth by a fundamental change in the economic structure of the country and Revenue equality.

Simply, economic development is a series of processes to improve the economic welfare of a country. Economic development is important for a country to avoid the social gaps that are also not detached from economic growth.

Economic development according to experts

Some economics experts have explained about economic development, including:

1. Sadono Sukirno (1996)
According to Sadono Sukirno, the sense of economic development is to increase the percapita income by way of processing the strength of potential economies into a real economy by investing, using technology, adding knowledge, Improved skills, organizational additions, and management.

2. Adam Smith
According to Adam Smith, economic development is a process of fusion or combination of population growth and technological advancement.

3. Prof. Meier
According to Prof. Meier, economic growth is the process of increasing percapita real income for a long period of time.

4. Schumpeter (Suryana, 2000:5)
According to Schumpeter, economic development is a change in industry and trade fields relating to the national income and income in which the process occurs spontaneously and is not intermittent.

5. Irawan (2002:5)
According to Irawan, economic development is a variety of efforts to improve the living standards of a country that is measured by the high low per capita real income.

Components in economic development

Development in the economic field generally has three components to be fulfilled. These three components include:

1. Building part of a process

Development is part of the process, which means that in economic development it requires the stages that a country must undergo. The intended stage could include justice, prosperity and the authenticity of a nation's inhabitants. The nation that builds its economy is a nation that is willing to process.

2. Development oriented to increase revenue

The main mission in economic development is to increase the Percapita income by active action. Therefore, it takes good cooperation between the Government, the community and other elements in the country to participate in economic improvement.

It is important as an effort to reflect the welfare of society through the increase in the Percapita income.

3. Long-term revenue increase

A country can be said to have been through the process of economic improvement if within a certain period of the income of the ship tends to increase or continuously increase.

Economic development should be able to demonstrate the signification of changes annually even when certain disorders such as natural disasters are caused. The most important thing is that it can show that every year there is an increase in the per capita income.

Economic development indicators

Economic development benchmark of a country based on several indicators that must be fulfilled in order to be used as a representation that the country is going through the process of economic development. These indicators include economic and social indicators.

Economic indicators include the rate of economic growth as a process of increasing the per capita output over a long period of increasing the gross national product per capita.

Its social indicators are the index of its Human resource development (life expectancy, education and decent standards of living) and the Quality of life index (mortality rate and life expectancy at age one).

Economic development Goals

Economic development has several objectives to achieve welfare to the income of the ship, namely:

  1. To improve the economic quality of society with equitable income
  2. Increase job opportunities by adding work areas that can absorb a lot of labor
  3. Improving the quality of education to improve human resources
  4. Improving public understanding of the culture of values – noble values including social, religious and cultural so as not to be easily affected by other cultures that do not conform to the prevailing norms in a country
  5. Avoiding possible inflation
  6. Positive impacts on economic development and negative impacts
  7. Economic development does not necessarily have a positive impact on the country. It could be that ongoing development provides certain negative side effects. The following is the positive and negative impact of development in the economic field:

Positive impacts of economic development

Improving and launching a country's economic growth process
Reduce unemployment by increasing the number of jobs that affect national income

Economic diversity of countries

  1. Improving the quality of human resources due to the demands of education and technology
  2. Negative impacts on economic development
  3. Unplanned Economic development may result in environmental damage
  4. Development in the economic field is often oriented to the development of the infrastructures and industries that can lead to reduced agricultural land and green open.
  5. Factors influencing economic development
  6. There are two factors that influence development and economic growth, including:

1. Economic factors
Some of the things that affect economic growth based on economic factors are human resources, natural resources, expertise, and entrepreneurship.

Human Resources (HR) strongly determines the success rate of national development through the quality and quantity of products.

Natural Resources (SDA) includes soil fertility, climate/weather conditions, seafood, and mining results, which are associated with the provision of production raw materials and greatly affect the growth of a country's industry.

Entrepreneurship/entrepreneurship and expertise are indispensable in the management of natural raw materials into something of high value.

2. Non-Economic factors
Not related to resources and expertise, but it can affect the economic growth of a country. These factors are the social culture condition of a country, political, institutional, and developing and prevailing systems in the community.

Barriers to economic development

In practice, economic development can occur barriers to the process. This is a natural thing that can arise at any time both from internal and external. Obstacles that can occur include:

  • Economic dualism. Industrial gaps can occur only in urban orientated areas.
  • There is still a culture that is not as economical as custom that does not support the full use of human resources to improve its life levels such as the social status of residents, hereditary habits and philosophical barriers.
  • Still many unemployment due to high birth rate
  • Revenue is not distributed evenly.

Development in the economic field is generally always accompanied by economic growth, but can not be otherwise. Some countries claim to be developing economic development, but in practice only meet economic growth indicators. That's a bit of information about the understanding of economic development and its components