The main goal of any country is to achieve a stablegrowth in the economy. Stimulating economic growth is a top priority for the government. After all, a high level of economy is the accumulation of wealth in the country, as well as an increase in the well-being of citizens. At the same time there are two ways to achieve this goal - growth is intense and extensive.
Definition
Экстенсивные факторы экономического роста – это conditions that affect the economy due to a quantitative increase in resources. For example, this may occur due to an increase in the number of employees of the enterprise or factory workers. But at the same time, the very amount of labor productivity of a single employee does not change. This technique was used at most domestic enterprises in the early and mid-90s. But at present, the economy is increasingly rejecting such growth methods, preferring more productive methods.
The researchers deduced the pattern:Extensive factors are characterized by a decrease in return from a resource with its increase. If the manager has increased the number of employees in the enterprise, he can expect a decline in the quality and productivity of their labor. That is why it is very important to have an understanding of the factors that influence the growth or decline of the economy. All over the world, economists are developing various mathematical models with which one could describe all stages of economic development under various conditions.
Main features
What are the main characteristics of extensive factors? In general, their main feature is an increase in production without any emphasis on quality indicators.
- Employees may be hired, howevertheir real qualifications are not given due attention. Some experts note that this indicator can characterize both intensive and extensive factors. Even the most developed companies at the beginning of development may have difficulties with recruitment, recruitment of actually qualified employees. Such companies first have to hire as many workers as possible, thereby enhancing extensive growth.
- When the number of staff increases, the capacityproduction begins to be missed. Production consumes several times more resources than is actually necessary. At the same time, the real efficiency of the enterprise remains at the same level, in some cases, sometimes even becoming lower.
- Enterprise owners gradually come tothe conclusion about the need to attract third-party funds. However, these funds are not used for the introduction of new technologies that could optimize production.
- The same thing happens with staff productivity: it can either remain at the same level, or fall even more.
Aspects of extensive development
Scientific and technological progress is the basisextensive development. Specialists separately distinguish the following factors of this type of growth, which are based on technological improvement of production:
- The increase in time spent on production.
- The increase in the duration of the main production assets of the enterprise.
- The increase in turnover of productive assets.
- Elimination of non-productive use of funds and objects of labor, as well as labor.
- Optimization of the process of using production resources.
Factors of extensive and intensive growth: the main differences
The main difference of intensive economicgrowth is that the company dramatically increased the ability to assimilate resources. Labor productivity rises significantly. In contrast to the extensive growth, with intensive there is an active introduction of new technologies. Some economists believe that this is the main definition of intensive growth - the introduction of new production technologies in the daily life of an organization.
При интенсивном росте, в отличие от extensive, there is a gradual improvement in the internal structure of the enterprise. Relations with existing suppliers are strengthened, and new ones are being created. The managerial apparatus is becoming more and more healthy, and those managers who have not proven themselves well, are gradually retiring. With extensive growth factors, there is an increased consumption of resources. With intensive - on the contrary: the yield of finished products increases, but resource consumption remains the same, or even decreases. Employees of those enterprises that have chosen the second path of economic development usually have a very high level of well-being.
Development: extensive or intensive?
Economists believe that all those factors thatultimately affect the process of improving the performance of the enterprise, can be divided into three broad categories: the volume of supply, demand factors, and the volume of distribution. But in reality, the attention of the management of the enterprise is always paid to the supply factors. After all, they allow you to influence the activity of buyers. Therefore, the following factors will influence whether an enterprise chooses a path of intensive rather than extensive development:
- Increase or decrease in prices for the main production resources.
- Changes in performance.
- Adoption of new laws regulating production relations.
Economic reality
Of course, in practice it is very rarepure form "this or that type. More often extensive factors are combined with intense. For example, if the latter are characterized by the adjustment of production, the purchase of more modern and technologically advanced machines, then often the enterprise is forced to hire more employees, not all of whom are quite qualified. On the other hand, the use of new equipment may require additional training even for those workers who have good experience. During training, productivity will inevitably decline.
