107. Sources of Economic Growth

A Mancosa Learner should be ready yo answer the following question (as it appeared in the January 2016 B.Com/BBA Eco 1B supplementary examination: "Describy ANY THREE (3) sources of economic growth of an economy.

To answer the question, you may want to look at these resources:

1. Economic freedom has been shown in numerous peer-reviewed studies to promote prosperity and other positive outcomes. It is a necessary condition for democratic development. It liberates people from dependence on government in a planned economy, and allows them to make their own economic and political choices. For information on the effects of economic freedom: http://www.freetheworld.com/

2. Here is what DFID in the UK had to say in their summary of the prospects for economic growth in that part of the world:

Firstly they defined the concept as follows:

Economic growth is the continuous improvement in the capacity to satisfy the demand for goods and services, resulting from increased production scale, and improved productivity (innovations in products and processes).

Another definition is: "an increase in the amount of goods and services produced per head of the population over a period of time."

 Factors improving productivity are particularly important sources of growth for developed economies with mature industries, but facing increasing global competition and rapid technological progress.

 Consumption has made a strong contribution to the growth of UK demand in recent decades, but the negative impact of the global financial crisis on consumer expenditure will persist for some time. Business investment is likely to become an increasingly important driver of growth. The UK’s net trade position is expected to improve.

 Specialised and knowledge-intensive service and manufacturing sectors are likely to contribute strongly to future growth, building on the UK’s relative specialisation in Finance, Business Services, Communications, and Computer and Information Services.

You can read the full article here

When looking at South Africa there are other particular possible sources where we have a possible advantage - tourism springs to mind (if the SA govt. can sort out the onerous visa requirements in 2016; then we are to some extent the gateway into Africa with regards to our banking and financial services infrastructure as well as from a logistics and transport point of view. (9 marks)