Why is sustainable development essential for economic growth andrelationship between economic growth and economic development?
Sustainability is a key to every sector as the problems faced by the world need permanent and more sustainable solutions. Sustainability is therefore important for economic growth as the growth needs to be sustainable to avoid un predictable changes.
Sustainable development is important for economic growth because: (i) Environment must be conserved while development is taking place. (ii) Resources must be used in such a way that something is conserved for future generations. (iii) The standard of living of all people must be raised. Sustainable economic development in business means effective production while considering the environmental future. Sustainable economic growth ensures that there is an emphasis on the quality of life. In a sustainable economic growth, future generations must be considered. Economic development is a critical component that drives economic growth in an economy, creating new job opportunities and facilitating an improved quality of life that includes increased access to opportunities created by economic growth for existing and future residents.Sustainable economics is about making decisions to safeguard our natural resources for future generations while still promoting economic growth. It's about the long game rather than short-term wins. After all, without resources for the future, there will be no economy to grow. Economic growth increases state capacity and the supply of public goods. When economies grow, states can tax that revenue and gain the capacity and resources needed to provide the public goods and services that their citizens need. Economic growth can be achieved through capital accumulation, while economic development necessitates investment in human capital. Economic growth can lead to income inequality due to unequal distribution of resources, whereas economic development aims to reduce income disparities. Economic growth is the process that happens automatically as the changes are made in the economy over time. Economic development is the process in which certain changes are made regularly for acquiring desired results. Sustainable development means “meeting the needs of the present generation without compromising the needs of future generations”. Thus, economic growth will be sustainable if fixed assets, including land, remain constant or increase over time. Both economic growth and economic development are important, but they serve different purposes. Economic growth focuses on increasing the size of the economy, while economic development aims to improve the overall well-being and quality of life for individuals within the society. Economic growth is considered one dimensional as it focuses only on income. Economic development is a 'Multidimensional' concept as it focuses on income, social welfare and other dimensions. It is possible even without economic development. Economic development cannot be achieved without economic growth.
Sustainable development balances social and economic growth with environmental protection, social equity, and well-being, ensuring long-term prosperity. Social and economic growth focused solely on short-term gains depletes natural resources and widens inequalities, undermining future growth potential and well-being. Sustainable practices enhance resource efficiency, drive innovation, and create new social and economic opportunities aligned with evolving consumer demands. Social and economic development considers broader quality-of-life factors beyond just GDP, encompassing health, learning, training, environmental quality, and well-being. Sustainable development harmonizes social and economic growth with these vital development goals for holistic, enduring progress and improved well-being.
Sustainable development “meeting the needs of the present generation without compromising the needs of future generations”. Thus, economic growth will be sustainable if fixed assets, including land, remain constant or increase over time. Economic growth increases state capacity and the supply of public goods. When economies grow, states can tax that revenue and gain the capacity and resources needed to provide the public goods and services that their citizens need, like healthcare, education, social protection and basic public services. Both economic growth and economic development are important, but they serve different purposes. Economic growth focuses on increasing the size of the economy, while economic development aims to improve the overall well-being and quality of life for individuals within the society. Economic growth can occur without significant improvements in social and environmental conditions. Economic development, however, emphasizes sustainable growth that balances economic progress with social equity and environmental conservation. Economic growth is a short-term process. Development is a long-term process. It is the improvement in the quantitative aspects. It is an improvement in both the quantitative and qualitative aspects.Natural resources are the basic condition for development; human resources are the basic condition for sustainable development. Development in connection with the environment is oriented toward exploitation and reclamation, whereas sustainable development is oriented toward conservation and reasonable usage. The link between economic growth and social development is that both capture some aspects of well-being. The economic measure of GDP focuses on households' financial abilities; while social indicators are able to reflect public services, like education and health, and how those change in the development process.
Sustainable development is crucial for long-term economic growth for a few key reasons:
- Preserves resource base: Unsustainable practices can deplete natural resources like clean water, fertile land, and minerals. Sustainable development promotes using resources efficiently and finding renewable alternatives, ensuring a steady supply for future economic activity.
- Reduces environmental costs: Pollution and environmental degradation from unchecked growth can lead to expensive cleanups, healthcare problems, and lost productivity. Sustainable practices minimize these costs, freeing up resources for further development.
- Boosts innovation: Sustainability often requires innovation in areas like clean energy, resource management, and efficient production. This innovation can lead to new industries, jobs, and economic opportunities.
Economic growth vs. economic development:
Economic growth refers to an increase in a country's total output of goods and services, often measured by GDP. Economic development, on the other hand, is a broader concept that encompasses not just growth but also improvements in living standards, education, health, and equality.
Sustainable development promotes both economic growth and development. By ensuring long-term resource availability and reducing environmental costs, it creates a foundation for sustained economic growth. Additionally, by focusing on social equity and environmental well-being, it fosters a more inclusive and resilient society, which is a key factor in economic development.
In short, sustainable development is like living on a budget – it ensures you don't spend your resources all at once and have enough for the future, while also investing in your well-being for a better quality of life.
Natural resources are the basic condition for development; human resources are the basic condition for sustainable development. Development in connection with the environment is oriented toward exploitation and reclamation, whereas sustainable development is oriented toward conservation and reasonable usage. Ecosystems provide the factors of production that promote economic growth: land, natural resources, labor and capital (created by labor and natural resources). Sustainable economic growth is about managing these resources so that they are not exhausted and remain available for future generations. Sustainability focusses on equal economic growth that generates wealth for all, without harming the environment. Investment and an equal distribution of the economic resources will strengthen the other pillars of sustainability for a complete development. Economic growth increases state capacity and the supply of public goods. When economies grow, states can tax that revenue and gain the capacity and resources needed to provide the public goods and services that their citizens need, like healthcare, education, social protection and basic public services. Both economic growth and economic development are important, but they serve different purposes. Economic growth focuses on increasing the size of the economy, while economic development aims to improve the overall well-being and quality of life for individuals within the society. Economic growth is a short-term process. Development is a long-term process. It is the improvement in the quantitative aspects. It is an improvement in both the quantitative and qualitative aspects. Economic growth is the short-term process. Economic development is the long-term process. Economic growth is the process that happens automatically as the changes are made in the economy over time. Economic development is the process in which certain changes are made regularly for acquiring desired results. Economic development often (but not always) depends on utilization of natural resources like oil or timber, which is not sustainable. By contrast, sustainable development might involve renewable resources, like wind power, or controlled harvests of wildlife. Increased economic activity leads to increased demand for energy, which can lead to increased pollution. Deforestation to make way for agriculture or development can contribute to climate change. Overfishing can deplete fish populations and damage marine ecosystems.