Development is when something changes from one condition to another. It means growth and change. In economics, development is when a country changes from a farming economy to an economy based on newer technologies.
A traditional economy is usually about survival. Families and small communities often grow their own food. Or they may hunt and gather. They also make their own clothing, homes, and goods. An example of a traditional economy is the Inuit people in the United States' Alaska and Canada.
However, most traditional economies don't exist in rich, "developed" countries. Instead, most traditional economies are inside of poorer countries. These are often called "developing countries." For example, the Maasai practice a traditional economy within the country of Kenya. However, Kenya's overall economy is a mixture of traditional and modern.
Developing countries often rely on agriculture and selling raw materials, like oil, coal, and timber. These are sold to developed countries. In return developed countries sell them finished goods, like computers, gasoline, or plastic goods.
Developed countries have modern economies. In a modern economy, many different people do different tasks. Modern economies include manufacturing and what is called the "service" sector. The service sector includes anything that isn't a physical good, including retail, banks, hotels, real estate, education, health, computer services, recreation, media, and communications. It even includes electricity, gas, and water supply. Modern economies are much larger than traditional economies. They also produce a great variety of goods and services.
Reading, Writing and Longer Lives
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 its goods and services in a country. Then divide that by its number of people.
Developed nations have much higher GNI per person. For example, Luxembourg in Europe has a GNI per capita of $69,390. The United States has a GNI per capita of about $48,000.
Highly developed countries have much more industrialization. People in highly developed countries regularly use modern technologies in their daily lives.
Developed countries usually have higher literacy rates. That means the majority of a population can read and write.
People in developed countries have a high life expectancy. Life expectancy is the average number of years 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 82.7 years, according to a World Health Organization study in 2017.
In developed countries, more people are between 15 and 64 years old. Uganda is a developing country in Africa. Half its population is under the age of 14.
Improved Farming Technology
In developed countries, most adults work. In developing countries, there might be many people out of work. The percent of people without jobs is called the unemployment rate.
Developed countries usually have a large middle class. Middle-class incomes fall between poverty and great wealth. Some developing countries have large populations living in poverty. Haiti is a developing country. Nearly six out of 10 Haitians live in poverty.
As countries begin to develop, they make more agricultural products. Farming technology is often improving in the country. Improved technology lets farmers plant more grain and grow more fruit. It lets farmers harvest more food using fewer workers. People in rural areas are able to earn more. Also, people can work in jobs other than agriculture.
Another sign of development is that the numbers of exports increase. Exports are products grown or made in one country. They are then sent, or exported, to another country.
Electricity can also show how developed a country is. Electricity is used in homes, schools, and businesses. Factories use huge amounts of electricity. Putting in electricity is an important sign of a developing economy.
Oil, natural gas, and coal are used to make electricity. They can be expensive and a country could run out of them. Some developing countries, such as Bangladesh, are trying to use renewable energy. These sources of energy can't be used up. Solar and wind power are renewable energy.
Newly industrialized countries are becoming more industrialized. Their economies grow very quickly. Newly industrialized countries are not as poor as developing nations. However, they are not as wealthy or educated as developed countries. Newly industrialized countries include India, Brazil, and Thailand.