In modern economic science, the intensive and extensive type of economic growth is rigidly distinguished . Let's try to understand the features of these options.
Intensive production growth
Intensive growth is usually characterized by a significant increase in the scale of output. Moreover, it is important that this increase is based on the widespread introduction of qualitatively new, more efficient production factors in production. An increase in the scale of production is usually ensured through the use of various advanced technologies, scientific achievements, more modern technology, a reduction in the expenditure part of production, planned advanced training of workers, and so on. Actually, thanks to precisely these factors , labor productivity, resource conservation and product quality are expected and objectively increased.
Extensive production growth
This type is historically more ancient than the previous one. In particular, extensive growth is characteristic of primitive man. It is associated primarily with
expansion of production, increase in the volume of resources used in
material production: attraction of additional labor, natural resources, expansion of arable land. However, what is important, not with the optimization of work, unlike the previous one. In addition, this type should include an increase in investment. The technological base does not change significantly. Extensive growth at certain stages of development is very progressive. For example, in cattle-breeding societies. However, sooner or later it leads to severe economic crises.
Today's societies and extensive growth
In the modern world, many societies, despite a fairly developed technological base, go on an extensive path. For example, an extensive path often allows you to quickly solve certain problems. For example, attracting more labor to production leads to lower levels of
unemployment and employment. However, this is far from always accompanied by an increase in real volumes of output, which leads to lower incomes and increased social tension. The extensive type allows you to quickly develop natural resources. However, due to the fact that such use of resources is irrational, there is a very rapid depletion of sources: mines,
minerals, arable land and so on. In the end, the problem of the development of raw materials leads to the question of improving the technology and production approaches in the use of irreplaceable raw materials. An important problem of extensive growth is also stagnation, in which even a significant quantitative increase in output is not accompanied by technical and economic progress. This factor led to the
Great Depression in the United States in 1929-1932, and also contributed to "stagnant" trends in the Soviet state.