Economic development not simply depend on economic factors like prices, demand and supply but different non-economic factors that play an important role in relative with one another. Hence economic and non economic factors of economic development in brief are given below.
- CAPITAL ACCUMULATION
Most theories of economic development emphasis that capital accumulation is a fundamental part of the development. So Capital accumulate ion or capital formation refers to the process adding to the stock of capital. This excludes land (though no improvements made for its productivity) and includes building equipment stocks of the production process.
- WATER AND POWER RESOURCES
In a modern economy, powder particularly electric power play a key role in development process .In agriculture, industry and in transport, Electric power is development is a basic requirement for agriculture.
Labour as a factor of production is relatively more mobile and heterogeneous in nature; Economic development of a country is influenced by quantity and quality of labour force. Hence If major proportion of population is working force, if they are hard working and efficient there is an increase in national income. Natural resources, and capital good are only useful when labour force is available to us. Agriculture, industry minerals, services, means of transport and communication and modern technology all depend on human.
- HUMAN CAPITAL
Human capital refers to the productive qualities embodied in the labour force. Productive qualities are education, training, health, skill and nutrition of the labour. So If people of a country are more educated, trained, healthy, skilled and well nourished it is said to have more human capital and greater is the similar to having more material capital to work with them.
Technology is the pool of technical knowledge. This is a human heritage available to all countries irrespective of the country which first developed particular technologies.
- EDUCATION AND TRAINING
Education, including training (with implies imparting of particular skills for particular jobs), is a process resulting in the building up of human capital. This is now regarded as more important than physical capital accumulation.
Natural resources play an important role in economic development. National income of a country depends on the existence and utilization of natural resources. If natural resources are more national income increased e.g. a country where minerals, forests, rivers, mountains, sea ports, oil and gas are more their national income is greater and vice versa.
Government plays a pivotal role in economic development .The degree of the role of government in economic development may vary from country. Govt. action is necessary to accelerate development in the developing countries. Government enterprise is needed in those fields where profits are too low or risks are too large to attract private enterprise. Government action needed to promote external economies and more generally balanced growth.
- TRANSPORT AND COMMUNICATION
A developed system of transport and communication is an important part of which called infra structure infra economy. So it is the foundation on which structure is build. Hence Developed means of transport and communication stimulate national and international trade; goods exchanged between rural and urban areas and make available improved agriculture inputs at the door step of farmer. Mobility of labour, organization and working capital increased. It helps in stabilizing prices and facilitates balanced growth.
Banks play a very important role in the economic life of a nation. A well developed Banking System is indispensable for the soundness and development of an economy. It indeed difficult to conceive how modern economic system can function properly without many of their services. The role of banking system in developing countries like Pakistan is of particular importance. The rate of savings in these countries is very low but to finance development projects they need large funds. Expanding industry, progressive commerce and agriculture in developing countries place great demand on the resources of Banks. It is by mobilizing savings that banks are able to meet these demands.