To ensure and implement the production process directly , certain conditions are required - production factors. Sometimes they are also called resources. Resources include all the elements that are necessary for the production (creation) of economic goods. Depending on the type of production, one or another set of factors is used. But some factors of production are the same and of the same type, they are still classified as the main factors of production. Otherwise, all factors are divided into certain classes and classifications, associations and groups.
The classification process is based on various approaches. For example, Marxist theory divided economic resources and factors of production into only two main and large groups - material and personal. Under personal factors, as a rule, we mean labor force from the standpoint of the person’s intellectual and physical abilities to work in the aggregate. And material factors mean a combination of objects and means of labor and natural conditions. But for modern science, such a division of production factors is not suitable. Therefore, in the second half of the 19th century, this theory significantly expanded the concept of the factor of production and their classification, which consists of three factors, but at the beginning of the last century another fourth was added to the first three. And such a classification is still used today with minor modifications and modernizations; this scheme is also called classical.
So, the main factors of production according to the latest classification are divided into labor, land, capital, and entrepreneurial ability. Consider the main factors of production separately and give a characteristic.
Labor from the point of view of production is a physical or intellectual activity of a person, which is aimed at creating some kind of economic benefits. Recently, this factor has been transformed into the concept of "human capital" which implies the consideration of the labor of an educated and skilled worker as one of the main factors of production.
As for land, it refers to the concept of the main factors of production, because it includes not only the plot of land, but also water resources, forests, minerals and natural resources that are necessary for the production process. And in this case, in the aggregate of all factors, land is one of the fundamental resources of production.
Capital (meaning physical) - is an economic resource defined by a combination of technical, monetary and material means that are necessary for the production of various economic goods. It is divided into two types: monetary and natural. Money capital, in fact, is not an economic resource; it represents, as it were, an intermediary factor which is necessary for attracting (acquiring) human and physical capital.
Entrepreneurial abilities are the main factors of production which, in essence, are the properties of labor but not its executive component but managerial and organizational. Despite the similarity in nature of this factor with performing work, this factor allows you to create your own form of income - entrepreneurial income. The minimum border of such income is profit. Other factors do not have their own types of income. Here, science can be attributed to this factor as a specific form of human activity.
Information also applies to this group or type of factors. Since it allows the collection and processing of various knowledge, their systematization for further use in the industrial and economic sphere of human activity. All of the above factors are often referred to as constant factors of production.