In this article, we discussed the meaning of development, underdevelopment. We also talked about the developed and under in Economy countries.
Definition
What is development?
Developed countries are those occupying leading places in modern world economy and politics. All of them have such main common features: high living standards, open government, the rapid science development, the free active introduction of high technologies within the production, agriculture and other spheres of life and human activities. Economically developed countries unlike the underdeveloped ones are countries with a market economy and the highest living standard of their citizens.
Among all the developed countries, the “group of seven (G7)” most developed countries are famous. These include the United States, Japan, Canada, France, Germany, the United Kingdom, and Italy.
What is under development
The underdeveloped countries are described as those which are subjected to significant social and economic transformations, especially industrialization and modernization. The underdevelopment means the process under which the country, especially its economy, changes under the influence of other leading countries.
What are the main differences between development and underdevelopment.
The main characteristics of development and underdevelopment within the country economy are the following:
Capital
The first characteristics of underdeveloped countries worth speaking about is a low human capital, providing the labor force to have poor skills, which leads to poor labor productivity.
While for developed countries typical are high levels of human capital, providing the labor force to be significantly educated and skilled. This makes it easier to engrain new technology continuously, causing high labor productivity.
Social Infrastructure
Another important aspect which influences the economy a lot is a social infrastructure, roads, bridges, etc. Bad infrastructure in the underdeveloped countries can cease goods and services production, limit the market’s growth on selling these products, causing low labor mobility and productivity.
While the developed countries’ infrastructure is advanced and can both meaningfully simplify productivity as well as provide a fast market growth.
Financial Infrastructure
financial infrastructure, which is badly developed with a primitive banking sector in the underdeveloped countries.
But it is modern and well established with all the modern, effective banking means in the developed countries. Therefore, the developed countries present rapid financial transactions, which reduces the unit trade cost accordingly.
Educational Sector
An educational sector, presented by educational institutions, labor training institutions and others, which are not in a sufficient amount for underdeveloped countries. That is why people there do not have an opportunity to learn the modern economic techniques of goods and services production and distribution.
The political systems
The political systems, as well as the general political, social, cultural and economic situation, are not stable in the underdeveloped countries. All these prevent the successful growth and development of the economy in such countries.
While in well-developed countries the political systems alongside the political, social, cultural and economic environment are stable providing the well-established democracies.
Modern Technology
Here let’s compare how modern technology is researched and developed. In most underdeveloped countries there can be some researches and practices committed at a low level, but nothing more.
But the developed countries technology sector is shown to be significantly highlighted and advanced in for a wealthy future.
Export
Export in these two economies is also greatly different. While undeveloped countries export their primary agricultural goods and other raw materials for a high weight to price ratio with earning a very little money for it.
The developed countries export high technology goods, such as planes, or others advanced electronic goods for a low weight to price ratio with earning a lot of money.
Importing new Goods
Therefore, all these reduce the capability of underdeveloped countries to import new goods and services, making it impossible to come out of the vicious poverty circle.
But everything is slightly different within the developed countries. They can import fresh goods and services, and it makes them stay afloat within the economic prosperity of their country.
Inconclusion: The economies that have high per capita income and support a high standard of living are referred to as developed economy and, on the other hand, economies that have low per capita income resulting in a low standard of living is referred to as underdeveloped economy.