Development 101

Economic Development

When referencing the term “economic development,” one must first understand the difference between development and growth. The term growth is more associated with gross domestic product (GDP) and how the GDP relates to institutions or governments. The means to indicate growth are focused on the macro level indicators such as, national income or per capita income. According to the Organization for Economic Co-operation and Development, “sustainable economic growth in operational terms is the upward trend in environmentally adjusted net domestic product (EDP) under certain conditions and assumptions.”

Development, on the other hand, focuses, not only on institutional statistics, but a variety of means: micro and macro. Development indicators focus more on improving the standard of living, which can be measuring by using gauges such as: literacy rates, life expectancy, infant mortality, and poverty rates. GDP does not account for micro indicators such as leisure time, environmental quality, freedom, or social justice. The World Bank states, economic development, or “local economic development (LED) offers local government, the private and not-for-profit sectors, and local communities the opportunity to work together to improve the local economy.  It focuses on enhancing competitiveness, increasing sustainable growth and ensuring that growth is inclusive.  LED encompasses a range of disciplines including physical planning, economics and marketing.  It also incorporates many local government and private sector functions including environmental planning, business development, infrastructure provision, real estate development and finance.”

Among other things, the contemporary social scientific study of economic development encompasses broad theories of the causes of industrial-economic modernization plus organizational and related aspects of enterprise development in modern societies. It embraces sociological-type research relating to business organization and enterprise development from a historical and comparative perspective; specific processes of the evolution (growth, modernization) of markets and management-employee relations; and culturally related cross-national similarities and differences in patterns of industrial organization in contemporary Western societies. On the subject of the nature and causes of the considerable variations that exist in levels of industrial-economic growth and performance internationally, it seeks answers to such questions as: "Why are levels of direct foreign investment and labour productivity significantly higher in some countries than in others?" (1)

1. ^ Lewis F. Abbott, Theories Of Industrial Modernization & Enterprise Development: A Review, ISR/Google Books, revised 2nd edition 2003, pages 1-2.

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