Types of economic growth: fully explained

Types of economic growth

What are the types of economic growth? To date, the scientific literature has not developed a unified approach to the definition of the term “economic growth“.

In the most general sense, it is customary to understand e economic growth as a special type of economic dynamics, characterized by an increase in indicators of national production.

One way or another, there are two most common interpretations of this term:

  • Economic growth as a process of increasing the value of material goods and improving their quality in accordance with the structure of the growing needs of society; and
  • Economic growth as the improvement of the social product (qualitative and quantitative) over a certain period of time.

Also, economic growth can be viewed in a narrow and broad sense. 

In the first case, it is identified with the indicator of economic development, which is the main trajectory of social development

In the second case, economic growth is viewed as a process that leads to a qualitative and quantitative change in the productive forces, an increase in the volume of the social product as well as an increase in the general welfare of the nation.

The fundamental goal of economic growth is to increase the quality of life, improve material well-being and ensure the national security of the state. 

One way or another, the problem of economic growth is one of the fundamental problems of any national economy.

Types of economic growth

In economic theory, there are two basic types of economic growth:

  1. Intensive economic growth. 
  2. Extensive economic growth.

Intensive economic growth

Economic growth of an intensive type is aimed at increasing the efficiency of production and increasing the return on all factors used in production, even though the amount of capital used and the amount of labor used may remain unchanged.


This type of economic growth is focused on an increase in the social product due to the quantitative growth of factors of production associated with the involvement of additional capital, labor resources, land, etc. into production processes. 

At the same time, there are no changes in the technological base of production.

Extensive economic growth

Extensive economic growth is the simplest way of expanded reproduction. Its main advantage is the ease of ensuring the growth of the rates of development of the national economy. 

This type of economic growth provides a high rate of development of natural resources and relatively quickly allows to reduce the level of unemployment, providing employment for the population.

At the same time, it is characterized by technological stagnation, which is characterized by an increase in the output of products not supported by economic and technical progress. 

In addition, extensive economic growth is associated with the presence in the country of a sufficiently large amount of natural and labor resources, through the use of which the economy is expanding.

In this case, the deterioration of production conditions necessarily occurs.

All these are the main disadvantages of extensive economic growth.


Types of economic growth overview

Economic growth of an intensive type is characterized by an increase in the scale of social production based on the use of qualitatively improved and more efficient factors of production.

In this type of economic growth, the scale of production grows as a result of the use of advanced technologies, the use of more advanced technology and more economical resources, an increase in the level of training of workers, etc. 

Thanks to this, an increase in resource conservation and labor productivity is achieved, and the quality of the final product increases.

Thus, if extensive economic growth is based on a quantitative change in production factors, then intensive economic growth is based on their qualitative improvement. 

The long-term orientation of the predominantly towards the extensive path of growth of social production can lead to the emergence of problems in the national economy.

Therefore, it is important to ensure an adequate combination of various types of economic growth, depending on the goals and resources of the national economy. 

Alternative types of economic growth

In addition, in the scientific literature, there are other approaches to the typology of economic growth. 

So, for example, from the point of view of productive forces, production technology and the technology used, there are three main types of economic growth:

  1. Pre-industrial;
  2. Industrial;
  3. Post-industrial.

The pre-industrial type of economic growth was based on the extensive development of the agricultural economy. 


The industrial economic growth that followed was based on the intensive growth of industry, due to the revolution in the material basis of production.

Finally, the post-industrial type of economic growth, characteristic of the current stage of social development, puts a person with his needs at the center of the economic system.

From the standpoint of social needs and opportunities, economic growth is subdivided into:

  • natural, 
  • guaranteed, and
  • actual.

The first is ensured by population growth, the second is supported by entrepreneurs and meets their expectations, and the third is ensured by the impact of the first two types.

These are all the types of economic growth and what they entail. 

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