Extensive growth in the economy

In modern economic science, intensive and extensive type of economic growth are rigidly distinguished . Let's try to understand the features of these options.

Intensive production growth

Intensive growth is usually characterized by a significant increase in the scale of output. At the same time, it is important that this increase is based on the widespread introduction of qualitatively new, more efficient production factors in production. The increase in the scale of production is usually ensured through the use of various advanced technologies, scientific achievements, more modern technology, reducing the expenditure part of production, planned upgrading of workers, and so on. Actually, thanks to these factors , labor productivity, resource saving and product quality are expectedly and objectively raised.

Extensive production growth

This type is historically more ancient than the previous one. In particular, extensive growth is characteristic of primitive man. It is connected, first of all, with Expansion of production, increase in the amount of resources used in material production: attraction of additional manpower, natural resources, expansion of arable land. However, what is important is not with the optimization of the work, unlike the previous one. In addition, this type should include an increase in investment. The technological base does not change significantly. Extensive growth at certain stages of development is very progressive. For example, in cattle breeding societies. However, sooner or later it leads to severe economic crises.

Today's societies and extensive growth

In the modern world, many societies, despite a sufficiently developed technological base, go extensively. For example, an extensive path allows you to quickly solve certain problems. For example, attracting more labor to production leads to a lower level of Unemployment and employment. However, this is by no means always accompanied by an increase in real output, which leads to a reduction in the incomes of the population and an increase in social tension. Extensive type allows you to quickly master the natural resources. However, due to the fact that such use of resources is irrational, there is a very rapid depletion of sources: mines, minerals, arable land and so on. In the end, the problem of developing raw materials leads to the question of improving technology and production approaches in the use of irreplaceable raw materials. An important problem of extensive growth is also stagnation, in which even a significant quantitative increase in output is not accompanied by technical and economic progress. This factor led to the Great Depression in the United States in 1929-1932, and also contributed to "stagnant" tendencies in the Soviet state.