Economic growth is important for people around the world, and it’s a priority for most governments and multilateral organizations. It means more people can fulfill their basic needs, such as food, shelter, and healthcare, than ever before. It also helps them enjoy higher standards of living and, in turn, contribute to society.
But the benefits of economic growth aren’t always so clear-cut. It can lead to rising consumption and the potential for a decline in quality of life as people try to maximize their hours spent working, for example. It can also increase inequality and even result in social instability, as evidenced by the 2008 financial crisis. And it isn’t always good for the environment or people’s health.
The most straightforward type of economic growth is extensive, which happens when there’s an increase in resources used to make products. An example would be the discovery of oil, which could create new jobs and improve living conditions for people. But there are other forms of extensive economic growth, too. For instance, Johannes Gutenberg’s invention of the printing press allowed books to be made more quickly and cheaply. And there are many other ways that technology can improve production.
Another type of economic growth is intensive, which happens when there’s an increase of the productivity of the workforce. This can be accomplished through technological innovations, such as the steam engine or the airplane, but it can also happen by reducing wasted labor and energy. An example would be a worker who can use less water or electricity in a process.