Extensive Growth

September 22, 2009

Economic development entails the increase in the living standard of a nation’s population connected to sustained growth from low-income economy to an up to date, high-income economy. The scope of economic development entails the policies and processes that are involved to improve the political, social, and economic well-being of the citizens. As such, extensive growth, in relation to economic development is based on the increase of quantity of inputs to be able to increase the quantity of outputs. In other words, it’s the use of more resources such as labor, land, capital that makes extensive growth achieved, which is the opposite of intensive growth.

Extensive Growth Vs. Intensive Growth

While extensive growth uses more resources, intensive growth uses a certain amount of resources in a more efficient manner to achieve an economic growth. Intensive growth will need development. As such, extensive growth is viewed as a potential subject for diminishing returns hence is thought to have no tangible effects on per-capita scale in the long-run.

When an economy relies on extensive growth on a long-term basis, it can be adverse as it will end up exhausting all resources. For economic development and growth to be maintained in the long-run, particularly on a per-capita basis, it’s advisable for each particular economy to have an intensive growth, for instance making improvements in various organizations as well as in technology. This way, the economy will be able to expand the entire production possibilities boundary.

Examples of the application of Extensive Vs. Intensive Growth
In most cases, leftists (non-economists) will be heard complaining about the growth of an economy arguing that growth is not desirable for the environment. To some extend it can be true and to some extend not true. There are two kinds of growth .i.e. intensive and extensive growth which is kind of more of the same. For example, a lumber company cutting down trees at a double rate is said to be growing extensively.

On the other hand, intensive growth entails having a company do more with very little. For instance, lumber companies are known to cut down the trees and then slice them up into lumber. As such, the companies grow in an intense manner by utilizing the same tree. This is because the sawdust extracted from the process of making lumber is reused and not discarded as a waste product. Even so, the sawblades used are thin ensuring less wood results as sawdust. Equally, the saw is controlled by a computer hence the sawyer grades the cuts automatically while cutting the boards using sawmill. The limbs that become chipped are made into chipboard. Twisted parts of the tree which cannot be made into lumber are turned into flakeboard.

Conclusion

Economic development entails technological and social progress which brings a change in how goods and services are produced. As such, production is not measured by the change achieved while using old production methods on a wider scale. Economic development involves only an increase in quantitative output and may or may not involve development.