Economic development is an important topic of discussion for academics, business leaders and government staff. Without a strong economy the country becomes subject to the powerful economic forces of other nations. Maintaining America’s dominance in economic influence is every bit as important as having a strong military. Proper labor and capital management can lead to higher levels of national productivity.
Productivity is a process of creating output with value that adds to the economic strength of the nation. Because we exist within a global world that economic return is generated by selling products increasingly overseas. A nation can focus on the amount or value of products in order to generate wealth back to their home countries that leads to more jobs and the raising of standards of living.
There are a number of ways an economic system can produce more value and create higher levels of national relevancy in the world. According to John Kenneth Gabraith in his book The Affluent Society (1958) the output of the economic system can be improved in five different ways:
1. More engagement of productive resources such as labor and capital (including materials) by eliminating idleness.
2. Labor and capital can be combined in a way that can better meet consumer tastes in products and services.
3. The supply of labor can be increased.
4. The supply of capital can be increased.
5. Technological innovation can be better used to improve labor and capital.
National systems should seek to enhance their economic engines through fostering international investments in local companies that lead to better use of resources, capital, and labor in a way that enhance the value of regional outputs. Capitalizing on core competencies through education and technology puts resources to better use to generate higher levels of income, jobs and government revenue.
Galbrath, J. (1958). The Affluent Society. NY, ON: A Mentor Book