The world has been divided into developing, under-developed and developed countries. And the race has been always to move from under-developed to developed counties. But the confusion lies herein in this process of movement from the under-developed/developing countries to developed countries. When should a country consider itself to be moving in the right direction i.e. towards its goal of being a developed country? Surveys are made and reports being churned out that state the economic growth of a nation. Does the rate of this economic growth a true indicator in this regard? If that is true why is it then that even in the 21st century decades after the industrialization and years after globalization the proportion of developed countries to under-developed countries is still wide enough? The answer lies in the economic development of these countries. If the gross domestic product or national income of the country is increasing then it implies that the country is experiencing an economic growth, which in fact is a positive symptom. But can we equate this economic growth with the country’s development? Does economic growth necessarily and obviously lead to economic development? The answer is ‘no’, because economic growth and economic development are not synonymous and economic growth does not automatically lead to economic development. That’s the reason why despite a growth in GDP in the under-developed or developing countries they have still not reached the level of developed ones in several aspects. The objective of this paper is to understand these two concepts and analyze their factors, the factors that are widening the gap between growth and development. Also an attempt would be made to understand the strategies through which economic growth can be converted to economic development of a nation. Relevance of understanding
The world first witnessed mercantilism, then industrialization and then colonization followed by liberalisation and globalisation. Countries became interdependent on one another and the market also became international. There is a tough competition among various nations to become the leading economic power. And the economic viability of nations are being frequently monitored and compared on basis of the economic growth of the nations i.e. the Gross Domestic Output. But a nation can in the true sense become an economic power only if it has achieved economic development along with economic growth and not just increasing the production of output. So it is necessary to understand these two concepts in today’s time. Economic growth and development
Economic growth and economic development are two different aspects that are often mistaken to be synonymous. But actually they are two different terms implying two different concepts and at the same are interrelated. Economic growth is the measure of the value of output of goods and services within a time period. On the other hand, economic development is the measure of the welfare of humans in the society. So while economic growth is merely an economic phenomenon, economic development is a multi dimensional process involving reorganization and re-orientation of the entire economic and social system. To understand the differences better let’s look into both of these concepts in detail. Economic growth:
Continuing rapid economic growth enables advanced industrial countries to provide more of everything to their citizens- better food and bigger homes, more resources for medical care and pollution control, universal education for children, more resources for the military and public pensions for retirees. Because economic growth is so important for living standards, it is a central objective of policy. Countries that run fastest in the economic-growth race, such as Britain in the nineteenth century and the United States in the twentieth century, serve as role models for other countries seeking the path to affluence. So...