Development is the process of growth, or changing from one condition to another. In economics, development is change from a traditional economy to one based on technology.


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Anthropology, Sociology, Geography, Human Geography, Social Studies, Economics

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Development is when something grows or changes. In economics, it has a more specific meaning. It means when a country's economy becomes more advanced. Often, the economy goes from farming to newer kinds of technology.

A traditional economy is usually about surviving. Families may grow their own food. Or they may hunt and gather. They also make much of what they need. An example of a traditional economy is the Inuit people in the United States' Alaska and Canada.

However, most traditional economies are not in richer countries. Instead, most traditional economies exist inside poorer countries. They are often called "developing countries."

For example, the Maasai tribe practice a traditional economy. Many Maasai live in the country of Kenya. But, Kenya's economy isn't just a traditional one. It is a mixture of traditional and modern.

Developing economies often farm. They may also sell raw materials to developed countries. Some raw materials are oil, coal, iron, rubber, and wood.

Modern Economies Are Big and Complex

Developing countries do this if they don't have the technology to make them into finished products. So, they may sell oil to a developed country. Then they buy finished goods made with the raw materials from developed countries. For example, they buy gasoline or plastic goods made from their oil.

Developed countries have modern economies. Modern economies are more complex. They don't just farm or sell raw materials. Modern economies have more manufacturing. They also have a bigger "service" sector. Anything that isn't a physical good is in the service sector. This includes retail, banks, hotels, real estate, education, healthcare, computer services, recreation, media, and communications. It even includes electricity, gas, and water supply. Modern economies are much larger. People aren't just trying to survive.

There are different ways to identify a developing country. One way is the gross national income (GNI) per person. To measure the GNI, first add up the total value of the goods and services in a country. Then divide that by the number of its people.

Developed nations have much higher GNI per capita. The United States has a GNI per capita of $48,000.

Highly developed countries are very industrialized. People use technology throughout their daily lives. The U.S. is an example of a highly developed country.

People in Developed Countries Live Longer

Developed countries usually have higher literacy rates. Most of the population can read and write.

People in developed countries have a high life expectancy. Life expectancy is how long a person can expect to live. Japan is a highly developed nation. It has the highest life expectancy of any country. The average Japanese citizen lives about 82.7 years. That number comes from a World Health Organization study in 2017.

In developed countries, more people are between 15 and 64 years old. Uganda is a developing country. Half of its population is under 14.

In developed countries, most adults work. Yet in a developing country many people could be without a job. That country would have a high unemployment rate.

Developed countries usually have a large middle class. Middle-class incomes fall between poverty and great wealth.

Electricity Is a Sign of Development

As countries develop they often make more agricultural products. Farming technology improves. Better technology lets farmers plant more grain and grow more fruit. Farmers are able to grow more. People in rural areas earn more.

Another sign is exports. Exports are products made in one country. They are sent, or exported, to another country.

Electricity can also show the level of development. More developed countries use more electricity.

Oil, natural gas, and coal are used to make electricity. These raw materials can be expensive. They can also run out. Some developing countries try to use renewable energy. This kind of energy can't be used up. Solar and wind power are renewable energy.

Newly industrialized countries are growing quickly. They are not as poor as developing nations. Yet they are not as rich developed countries. People also aren't as educated as in developed countries. Newly industrialized countries include India, Brazil, and Thailand.

Fast Fact

Another BRIC in the Wall
The economies of Brazil, Russia, India, and China are sometimes grouped together as "BRIC." These countries are not part of a political or trade alliance. However, they are all large countries with large economies that are growing very quickly. Some economists believe that by 2050, the economies of BRIC countries will be larger than the United States or the European Union. South Korea and Mexico are sometimes compared to BRIC countries.

Fast Fact

The Good Life
The United Nations rates the development of nations using the Human Development Index (HDI). In addition to GNI per capita, the HDI takes into account literacy rates, school enrollment, and life expectancy. According to the HDI, in 2010 Norway was the most developed nation in the world. The United States was fourth.

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Hilary Costa
Erin Sprout
Santani Teng
Melissa McDaniel
Jeff Hunt
Diane Boudreau
Tara Ramroop
Kim Rutledge
Hilary Hall
Mary Crooks, National Geographic Society
Tim Gunther
Jeannie Evers, Emdash Editing, Emdash Editing
Kara West
Educator Reviewer
Nancy Wynne
National Geographic Society
Last Updated

October 19, 2023

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