What Are The Modern Factors Of Production

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What Are The Modern Factors Of Production
What Are The Modern Factors Of Production

Video: What Are The Modern Factors Of Production

Video: Factors of Production (Resources) 2022, December

Modern industrial production is a complex complex, the development of which depends on several interrelated factors. The main one is all sorts of resources. They can be tangible and intangible. Organizational resources, entrepreneurial abilities and scientific achievements are increasingly referred to the latter type.

What are the modern factors of production
What are the modern factors of production


Step 1

Industrial production includes several stages: preparation of equipment, processing of raw materials, direct manufacturing of industrial products, their storage and transportation to the consumer. Design activities and marketing research also play an important role in the production process. At any stage, a manufacturer of products requires certain resources, which become the main factors of production.

Step 2

The most important factor in modern production continues to be human labor as the sum of human abilities. This economic category directly affects the efficiency of production activities. Through labor, workers influence the raw materials, transform them, turning them into a final product. The labor process is characterized by productivity and intensity. In modern conditions of production, the share of physical labor is decreasing, since the most difficult and monotonous operations are transferred to machines and mechanisms.

Step 3

In a market-based way of doing business, capital becomes another factor of production. Human capital refers to the knowledge, skills and abilities of employees of an enterprise. Material capital is embodied in buildings, industrial equipment, and raw materials. This also includes other production assets that are needed to organize the production process of products. Land is still crucial for industrial enterprises.

Step 4

Manufacturing in the 21st century is more dependent on information than it was a few decades ago. An entrepreneur needs accurate data to identify competitors, assess the market position and the dynamics of the external environment. Timely and accurate information makes it possible to organize the production of products that will be in strong demand. This factor of production is often called information capital.

Step 5

Starting a business that produces goods and services requires an entrepreneurial ability. This category is also referred to as modern factors of production. For an entrepreneur, organizational skills, knowledge of the specifics of a given field of activity, as well as personal qualities are important: a tendency to take reasonable risks, resistance to stress, and the ability to be a leader. For the success of modern production, the personality of an entrepreneur is sometimes decisive.

Step 6

The current production is inconceivable without fresh technological solutions, without using the latest achievements of science and technology. The decisive factor here is not fundamental, but applied scientific research, which is directly intended to solve practical problems. Large enterprises make extensive use of R&D to improve the competitiveness of products.

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