ECONOMIC GROWTH FACTORS in Asia

1. ECONOMIC GROWTH FACTORS in Asia SS7E10: The student will describe factors that influence economic growth and examine their presence or absence in India, China, & Japan

2. Economic Factors • Human Capital– knowledge and skills that make it possible for workers to earn a living producing goods (or providing services). • Gross Domestic Product (GDP)– the total value of all goods and services produced by a country in a single year “What exactly is GDP?” • Capital Goods– factories, machines, and technology that people use to make products (or provide services).

3. Investing in Human Capital • Companies that invest in human capital through training and education are more likely to have higher profits and more satisfied workers. • Countries where training and education are available have higher production levels of goods and therefore a higher GDP. • Countries that invest in human capital have stronger economies!

4. India • Over half of the population still works as farmers • Most farms are very small and produce only enough food for their families • 25% of India’s GDP comes from farming • In the 1960’s, the Green Revolution program trained farmers in the use of new technologies to improve farming; this program is an example of investment in human capital.

5. India continued… • Modern agricultural techniques have become more widely used since the Green Revolution • India is one of the world’s top ten industrial nations! • India invests in capital goods in order to overcome problems of poverty and overpopulation

6. China • Most economic decisions are made by the central government which still makes China very much like a command economy. • Since the Four Modernizations program: • More modern equipment and seeds have been brought into farming • Modern technology and the investment in capital goods have been brought into industry to allow factories to increase the production of consumer goods that are easier to sell in world markets • Special Economic Zones were set up as trade centers for global trade

7. Japan • Japan’s investment in human capital through education is the highest in the world! • Japanese companies invest in human capital by providing benefits like health care and recreation facilities • Japanese government works with the business community to promote industrial growth by making sure they are keeping up with world markets and trends • Japan has so few natural resources; therefore nearly all of Japan’s GDP (98%) comes from industry and services • Japan’s economy depends heavily on modern industry to stay competitive and so they invest in capital goods

8. Entrepreneurship • Entrepreneurs are creative, original thinkers who are willing to take risks to create new businesses and products • Entrepreneurs think of new ways to combine productive resources (natural, human, and capital) to produce goods to sell at a high enough price to cover costs • They risk their own money to produce these goods in hopes of earning a profit • Only about 50% of new businesses are still operating three years after they begin!!

9. Entrepreneurship inIndia • India has many stories of entrepreneurship • Some of the world’s largest and most successful companies were founded by Indian entrepreneurs • India also has smaller entrepreneurs known as the micro-credit industry • Rural villagers who wish to set up small businesses to help their families have benefited

10. Entrepreneurship in China • Entrepreneurship is new in China as the government has only allowed individual businesses since the late 1970’s. • Many have taken advantage of the new openness and as many as 100 people are billionaires

11. Entrepreneurshipin Japan • Japan is a land of entrepreneurs • Japan’s economic development depends on the creative ideas of the country’s entrepreneurs.