There should be an appropriate environment for growth and development. The appropriate, environment pertains to the agencies that organised resources for growth, and the attitudes of the people towards economic activities. If the resources organizing agencies- government, business leadership, labor leadership – are growth seeking, growth is promoted. For example, a good government can frame suitable policies, prepare right kind of plans create opportunities for entrepreneurial abilities to flower. Similarly, progressive business leadership can break new grounds in products, in techniques, in markets etc. No less important are the attitudes of the people towards work, earnings and spending. These can promote growth, if based on economic rationale. A hardworking and honest community has a consciousness that is favorable for rapid progress.
The six characteristics of modern economic growth according to Simon Kuznets are:-
- High rate of growth of per capita output and population.
- High rates of increase in total factor productivity, especially labour productivity.
- High rates of structural transformation of the economy.
- High rates of social and ideological transformation.
- The propensity of economically developed countries to reach out to the world for markets and raw materials.
- Limited international spread of economic growth.
One sense in which the term development is used to imply change the process of economic and social transformation within countries. Traditionally, development meant the capacity of a national economy, who see initial economic condition has been moreover less static for a long time, to generate and sustain an annual increase in its gross national product at rates of perhaps 5 % – 7% or more.
The was looking at development almost exclusively in terms of growth targets, not much thought being given to the beneficiaries of that growth or the composition of output. The raising of income levels is generally called economic growth in rich countries and in poor ones it is called economic development, but this view does not specify the underlying forces which bring about the rise in income levels. Hicks points out that the problems of underdeveloped countries are concerned with the development of unused resources even when their uses are known, while those of developed countries are related worth when most of their resources have already been utilized to considerable extent. In fact, the terms development and growth have nothing to do with the type of economy. The distinction between the two relates to the nature and causes of change.
In recent times, economics development has come to be redefined in terms of the reduction or elimination of poverty, inequality and unemployment within the context of growing economy. Therefore, we may say, “development is a multi-dimensional process involving major changes in social structure, popular attitudes and national institutions as well as the acceleration of economic growth, the reduction of inequality and the eradication of absolute poverty.”
There are three basic core values in the wider meaning of development, namely, life-sustenance, self-esteem, and freedom. The three core components are inter-related. Low levels of life- sustaining result in lack of self-esteem and freedom; this lack of self-esteem and freedom of choice, in turn, act as links in a vicious circle of self-perpetuating poverty producing as they do as sense of fatalism and acceptance of the situation. It is also called accommodation of poverty.