Top 9 Differences Between Economic Growth and Economic Development

The terms ‘economic growth’ and ‘economic development’ sound similar. However, the two concepts are different. While economic growth is a quantitative concept, economic development is a qualitative concept.

What is Economic Growth?

Economic growth can be referred to as the increase that is witnessed in the monetary value of all the goods and services produced in the economy during a time period. It is a type of quantitative measure that reflects the potential increase in the number of business transactions taking place in the economy.

It can be measured in terms of the increase in the aggregate market value of additional goods and services produced by using economic concepts such as GDP and GNP.

Economic growth is a narrow concept when compared to economic development.

Also Check: Human Capital on Economic Growth

What is Economic Development?

Economic development refers to the process by which the overall health, well-being, and academic level of the general population of a nation improves. It also refers to the improved production volume due to the advancements of technology.

It is the qualitative improvement in the life of the citizens of a country and is most appropriately determined by the Human Development Index (HDI). The overall development of a country is based on many parameters such as the creation of job opportunities, technological advancements, standard of living, living conditions, per capita income, quality of life, improvement in self-esteem needs, GDP, industrial and infrastructural development, etc.

Let us look into the most significant points of difference between economic growth and economic development from the following table:

Economic Growth Economic Development

Definition

It refers to the increase in the monetary growth of a nation in a particular period. It refers to the overall development of the quality of life in a nation, which includes economic growth.

 Span of Concept 

It is a narrower concept than that of economic development. It is a broader concept than that of economic growth.

                                                                                Scope

It is a uni-dimensional approach that deals with the economic growth of a nation. It is a multi-dimensional approach that looks into the income as well as the quality of life of a nation.

                                                                                Term

Short-term process Long-term process

                                                                        Measurement

Quantitative Both quantitative and qualitative

                                                                        Applicable to

Developed economies Developing economies

                                                                 Government Support

It is an automatic process that may or may not require intervention from the government It requires intervention from the government as all the developmental policies are formed by the government

                                                              Kind of changes expected

Quantitative changes Quantitative as well as qualitative changes

                                                                         Examples

GDP, GNP HDI, per capita Income, industrial development

This article helps students gain a broader understanding of the concepts of economic growth, economic development, and the difference between them. For more such interesting concepts, stay tuned to BYJU’S.

4 Comments

  1. Excellent learning app

    1. Yeah, amazing learning app.

  2. It is helpful for me

  3. Amazing points are mentioned here. Easy to understand. Happy to read this.

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