Economic development is a multifactorial process, which can be analyzed only for sufficiently long periods of time. In this regard, economic growth is one of the urgent problems of the economy for any country in the world. According to the dynamics of economic growth, one can judge the development of the national economy, the standard of living of the population, ways to solve the problems of limited resources and others. The essence of economic growth is as follows.
Economic growth is a process of gradual increase in production volumes on a national scale, which occurs subject to an increase in resources used or improvement of technologies and equipment. Factors and types of economic growth are determined by the way the country chooses to accelerate the pace of development of the national economy.
The types of economic growth are as follows: the so-called predominantly extensive and, accordingly, predominantly intense.
The extensive type has historically developed before. This is the path of expanded reproduction. In this way, production volumes expand due to three factors: growth of fixed assets (capital), labor costs and material costs (materials, energy, natural raw materials).
The growth model in the absence of technological progress has the properties of the dependence of the return on the scale of the increase in the volume of individual factors.
Extensive types of economic growth for countries are the easiest way to develop an economy. In this direction, resorting to the rapid development of resources, quickly eliminate unemployment. However, this type of growth also has serious flaws: technical stagnation, lack of progress in the social efficiency of production, production assets are not being updated, new developments are not being introduced. With the rapid development of natural resources along this path of development, there is also a rapid depletion of the arable layer of the earth, mines, and sources of minerals. It is necessary to increase the means of production and labor costs, as a result of which economic growth is costly.
Intensive type is more complex. Its main feature is an increase in the efficiency of the main production factors, which is possible due to technological progress.
Intensive types of economic growth activates the growth of efficiency of all factors of production. With a constant value of costs and growth in aggregate productivity, the size of production also grows.
In this way, the means of production are used more efficiently. Their growth occurs due to the introduction of advanced technologies, scientific achievements, progressive technology, more advanced subjects of labor, advanced knowledge and skills in the production processes. This nature of growth contributes to the improvement of product properties, resource saving, growth of labor productivity, and better use of the material base of the enterprise.
The peculiarity of this type of growth is that it goes along with an increase in the productivity of production conditions, the development of scientific and technical information, and the improvement of the cultural and technical level of working employees. Such development overcomes the barriers characteristic of the extensive type of growth. The development of the economy is being transferred to the basis of continuous economic progress based on resource conservation.
Intensification entails a progressive restructuring of the structure of the economy. However, while ensuring high rates of development and ensuring scientific and technological progress, this path can cause unemployment.
There are several types of intensification: labor-saving, capital-saving and comprehensive intensification. All these types of economic growth are based on the introduction of more advanced technology and scientific developments.