Phases of Economic Development PDF

PHASES OF Chapter 2: Lesson 2 ECONOMIC Differentiate the phases of economic development and its impact on the business environment (ABM_AOM11-Ic-d-8). DEVELOPMENT And their Impa...

PHASES OF Chapter 2: Lesson 2 ECONOMIC Differentiate the phases of economic development and its impact on the business environment (ABM_AOM11-Ic-d-8). DEVELOPMENT And their Impact on the Business Environment Introduction to Economic growth and Social Economic Development Progress Economic development focuses on improving the quality of life. It includes sustainable practices to ensure future generations' needs. Business managers play a crucial role in this process. Sustainable economic development type of economic development that seeks to meet the needs of the present without compromising the ability of future generations to meet their own needs. It focuses on creating a balance between economic growth, social development, and environmental protection. The Millennium Development Goals (MDGs) A blueprint for global development. Adopted in September 2000 by world leaders. Aimed at reducing extreme poverty and promoting sustainability. Included 8 specific goals to be achieved by 2015.  Philippine Development Plan (PDP) 2011-2016 A roadmap for inclusive growth and development. Focuses on inclusive growth and poverty reduction. Aims to generate mass employment. Covers economic, social, and environmental goals. AmBisyon 2040 The Philippines' current development plan is the AmBisyon 2040. It's a long-term vision for the country, aiming to transform the Philippines into a "prosperous, inclusive, resilient, and united nation." It outlines the country's desired state by 2040. Rostow's Stages of Economic Growth Developed by economist Walt Rostow. Describes five stages of economic growth. Helps understand the development process of countries. Traditional Society STAGE 1 Economy based Impact on Business: on subsistence Businesses are small and mostly agriculture. family-run, serving local needs with Limited limited growth potential. technology and There is little infrastructure to static society. support large-scale businesses or Focus on basic industries. survival needs. Preconditions for Take-off STAGE 2 This stage involves the development of infrastructure, education, and technology, preparing the country for economic growth. Businesses begin to explore new opportunities as infrastructure develops, and there are more chances for trade and industrial growth. Entrepreneurs and investors start emerging, seeing potential for future economic growth. Take-off STAGE 3 Rapid Impact on Business: industrialization and Businesses expand rapidly, especially in economic growth. manufacturing and industrial sectors. Increased There is a higher demand for labor, and productivity and factories become common. investment. Economic growth becomes self- Development of new sustaining as profits from industries. industrialization are reinvested. Drive to Maturity STAGE 4 The economy diversifies beyond the early industries, developing new sectors like technology, finance, and services. The economy becomes more complex and integrated into the global market. Businesses in a wide variety of industries emerge and grow, from advanced manufacturing to financial services. Businesses benefit from skilled labor, technology, and access to both domestic and global markets. International trade becomes more significant, and industries produce more complex goods. Age of Mass Consumption STAGE 5 Economy focused on Impact on Business: consumer goods and Businesses shift their focus to consumer services. goods, like electronics, automobiles, and High levels of income luxury items. and widespread Companies benefit from a strong domestic prosperity. market and increased consumer spending. Increased focus on There is significant growth in the service social welfare and sector (retail, entertainment, finance, quality of life. healthcare). Rostow’s model suggests that all countries go through these stages in a linear fashion, from traditional to advanced economies. Each stage brings new opportunities and challenges for businesses, shaping how they operate, grow, and interact with their environment. IMPACT OF ECONOMIC DEVELOPMENT ON BUSINESS ENVIRONMENT  Here are some key areas where it can influence businesses: Increased Market Opportunities: Larger consumer base Diversification of industries Improved Infrastructure: Enhanced connectivity Attractiveness for foreign investment Enhanced Human Capital: Skilled workforce Increased innovation  Here are some key areas where it can influence businesses: Reduced Economic Uncertainty Stable macroeconomic environment Increased investor confidence Increased Competition Foreign direct investment Domestic competition Regulatory Changes New regulations Regulatory uncertainty 5 Stages Around the World Pair Research Activity Pair up and pick a country. Figure out which of Rostow’s economic stages it fits into. Then, talk about how businesses are doing there based on that stage.