Difference Between Economic Growth and Development

Though growth and development sounds the same, there are some differences between them in terms of economic. And Growth is actually a part of Development.
Growth refers to the increase in number and size while Development means an improvement of circumstances.
I would like to describe some theories of Economic Growth before we go to Economic Development.
In Rostow’s Growth Theory, there are 5 stages: 

A. Traditional Society.

B. Pre conditions for Takeoff.

C. Take Off.

D. Drive to Maturity.

E. Age of High mass Consumption.

A. Traditional Society

A Traditional society according to him, as one whose structure is developed within limited production functions based on Pre Newtonian science and technology. They are normally Agriculture dominated societies and lack of science and technology. They also don't have the Systematic use of science and technology. In that case, economic changes could be made possible through more land can be brought under cultivation. Pattern of trade and commerce can be including farm outputs. And scale and pattern of trade and commerce can be expanded by increase in agricultural productivity.


B. Pre conditions for Takeoff

This is 2nd stage of Economic growth and in this stage Pre Condition for sustained growth created. This would also be described as Transitional era. Such conditions developed in Europe at the end of 15th century, at the end of medieval age and started of modern age.


C. Take Off

Take off is the interval during which the era of investment increases in such a way that real out put per ca-pita increases significantly. This initial increase carries with it radical changes in the techniques of production and the disposition of the income flows. Investment increases, rise per ca-pita out put. At this stage, Growth becomes normal condition. The traditional values, habits and an institutions completely changes due course of modernization.Industrial revolution lasts for two to three decades. Economic growth becomes common and automatic phenomenon. Take off is initiated by a sharp stimulate either political or industrial  revolution which affects the economic and social institutions.

Here are the conditions for take-off:

- As the period when society has effectively applied the range of modern technology to the bulk of its resources.

- This stage refers to the need for the economy itself to diversify.

- The sector which are initial leading replaces by the other sectors.

- Some 10 to20 % of the national income is steadily invested.


D. Drive to Maturity

This is the period when society has effectively applied the range of modern technology to the bulk of its resources. This stage refers to the need for the economy itself to diversify. The sector which are initial leading replaces by the other sectors. Some 10 to 20 % of the national income is steadily invested. 
At this stage, Import decreases and replace by home indigenous production. New commodities exported to match them. Reduction in poverty and rising standard of living can be seen. There is no necessary of sacrificing the comfort to gain momentum and strengthening of certain sectors. 


E. Age of High mass Consumption

This stage refers to the period of contemporary comfort afforded in many Western nations. Leading sectors shift towards the durable consumer goods and services. Real income per head rises significantly. Large number of persons gained command over consumption which transcended basic foods, shelter and clothing. Use of automobiles, electric powered household gadgets, luxurious goods increase. Structure of working force changed. Increase in urbanization. Skill oriented jobs. Allocation of resources for welfare of the society and environment concerns.
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However Economic growth in an economy demonstrated by an outward shift in its Production Possibility Curve (PPC). Another way to define growth is the increase in a country’s total output or Gross Domestic Product (GDP). It is the increase in a country’s production.

A country’s economic development is usually indicated by an increase in citizens’ quality of life. ‘Quality of life’ is often measured using the Human Development Index, which is an economic model that considers intrinsic personal factors not considered in economic growth, such as literacy rates, life expectancy and poverty rates.

'Economic development' is a process in which a nation is being improved in the sector of the economic, political, and social well-being of its people. The term has been used frequently by economists, politicians, and others in the 20th and 21st centuries. The concept, however, has been in existence in the West for centuries. "Modernization, "westernization", and especially "industrialization" are other terms often used while discussing economic development. Economic development has a direct relationship with the environment and environmental issues. Economic development is very often confused with industrial development, even in some academic sources.

Whereas economic development is a policy intervention endeavor with aims of improving the economic and social well-being of people, economic growth is a phenomenon of market productivity and rise in GDP. Consequently, as economist Amartya Sen points out, "economic growth is one aspect of the process of economic development".

between economic growth and economic development there are

similarities and differences [6]. Similarities refer to the fact that:

-Growth and development are continuous processes, with stimulating effects in economy;

-Both processes involve the allotment and utilization of resources and the increase of

efficiency;

-The finality of growth and development is the improvement of the standard and quality of

life;

-Growth and development are cause and result of the general trend, influencing its rhythm

and ensuring passages from one level to the other.

The differences between economic growth and development refer to the fact that, while economic

growth concerns the quantitative side of economic activity (the increase of results, of quantities, of

sizes), development has a larger scope, including qualitative changes that take place in economy and

society. In fact, development is a qualitatively higher step of macro-economic evolution. We often

refer to growth theories when we speak about the developed countries and to the theories of

development when we approach the economic problems that are specific to the developing or less

developed countries.

There are similarities and differences between economic growth and economic development. Similarities refer to the fact that:
-Growth and development are continuous processes, with stimulating effects in economy;
-Both processes involve the allotment and utilization of resources and the increase of efficiency;
-The finality of growth and development is the improvement of the standard and quality of life;
-Growth and development are cause and result of the general trend, influencing its rhythm and ensuring passages from one level to the other.

The differences between economic growth and development refer to the fact that, while economic growth concerns the quantitative side of economic activity (the increase of results, of quantities, of sizes), development has a larger scope, including qualitative changes that take place in economy and society. In fact, development is a qualitatively higher step of macro-economic evolution. We often refer to growth theories when we speak about the developed countries and to the theories of development when we approach the economic problems that are specific to the developing or less developed countries.

International trade and exchange rates are a key issue in economic development. Currencies are often either under-valued or over-valued, resulting in trade surpluses or deficits. Furthermore, the growth of globalization has linked economic development with trends on international trade and participation in global value chains (GVCs) and international financial markets. The last financial crisis had a huge effect on economies in developing countries. Economist Jayati Ghosh states that it is necessary to make financial markets in developing countries more resilient by providing a variety of financial institutions. This could also add to financial security for small-scale producers.

Growth occurs when

1. There is a discovery of new mineral/metal deposits.
2. There is an increase in the number of people in the workforce or the quality of the workforce improves. Example: training and education.
3. There is an increase in capital and machinery.
4. There is an improvement in technology.

Development occurs when

Measures of economic development will look at:

• An increase in real income per head – GDP per capita.
• The increase in levels of literacy and education standards.
• Improvement in the quality and availability of housing.
• Improvement in levels of environmental standards.
• Increased life expectancy.

We can also have a situation where there is growth and development, i.e. increase in luxury goods and education.

Development alleviates people from low standards of living into proper employment with suitable shelter. Economic Growth does not take into account the depletion of natural resources which might lead to pollution, congestion & disease. Development, however, is concerned with sustainability which means meeting the needs of the present without compromising future needs.

A. Economic Growth

Growth is an increase in the country’s output.

B. Development

Development is an improvement in factors such as health, education, literacy rates and a decline in poverty levels.

Change in Development