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Social determinants of Economic Development

Economic development implies two things: Economic growth which leads to increase in production and generation of income and equitable distribution of this income among the population to improve the quality of life. Although economic development does not necessarily imply industrialization there is no historical precedent for substantial increase in percapita income without diversion of both capital and labour from agriculture. Economic development is synonymous with industrialization. Economic development is very much influenced by various social factors. Nation states are created with common language and culture. Economic development of any country hinges on the efficient employment of factors of production such as labour, land, capital and organization. There is commercialization of production with monetization of economy. The employment of factors of production is conditioned by cultural and social factors. The people must have the required ability, experience and knowledge to make the best use of the facilities that are made available. There is decline of the proportion of the working population engaged in agriculture. The technology plays very important role when appropriate social conditions are present.

There is trend towards urbanization of society with growth of scientific knowledge. A new value system emerges which emphasis individual initiative and responsibility and enables the individual to function without any control. The exclusiveness of clan, kin or caste breaks down and provides norms of behavior suited to the secondary group type of relationship characteristic of an industrial society. There is widespread spread of education. The social stratification emerges based on achievement criteria and permitting occupational mobility.