Question

International Marketing Management

Explain the concept of economic development. Define and detail the aggregates used for measurement (what the calculation entices). Provide examples of countries that experienced economic development in the last 20 years. What were the drivers?

Answer 1

Economic development can be defined as the process by which the quality of life of a nation, region or local community and economic well being of the individuals and the country all together is improved according to targeted goals and objectives set by the concerned authorities for achieving sustainability and development for the nation. Economic Development is a wider concept which includes economic growth in it. Aggregates to measure the Economic Development of a country are:

1 Human Development Index: The Human Development Index (HDI) is a life index quality that is prepared by the United Nations Development and Growth Program. It is a composite index of life expectancy, the income level and the level of education and schooling being provided to any country's individual as a whole. Thus the three composites determine the HDI index and tells what the population's development index is.

2. Gross Net Product: Gross National Product (GNP) is an aggregate which measures the economic output and produced of a given country at a particular amount of time. GNP can be used to measure the increase in real national income over a given period of time. It tells how much products are being produced at all. Although, it has its own limitations of double counting and including false statements within it.

3. Per Capita Real Income: (PCRI) Per Capital Real Income is a measurement of income which also factors in population. It works on the basis of calculating and estimating the real income level of every individual in the particular country's population to determine the inequality and poverty standards of that individual's income level.

4. Physical Quality Life Index: (PQLI) Physical Quality of Life Index is a measurement for the most basic and standard needs of the people. It factors in a wide range of indicators such as health, sanitation, water conditions, nutrition and education of individuals and the country all together to see it the country's population is able to fulfil the basic needs or not.

Examples of countries that experienced a rapid economic development in the last 20 years are Dubai, India, US, Russia, China, Japan, France and UK. The reasons and the main drivers that supported their economic growth were the globalisation, liberalisation and privatisation factors. Technological growth made such impact in the industry causing immense industrial growth in these countries creating and maintaining a life standard for every individual. Infrastructure and Service sector started booming and thus lead to the modernisation of these industries and countries achieving super power title and growth.