Economic Development and Economic Activity
Growth is not development
Economic growth is a rise in real output, measured by GDP. Economic development is broader: rising living standards, better health and education, reduced inequality and structural change in what an economy produces. GDP counts market output only; it misses subsistence work, much informal activity, unpaid labour and environmental damage, and says nothing about how income is shared.
Sectors, factors and choices
Classify activity: primary (extraction - mining, farming, fishing), secondary (manufacturing and processing), tertiary (services - trade, transport, teaching), quaternary (knowledge - research, ICT). Botswana's diamond-led growth shows both the power and the risk of dependence on one primary export: volatile prices, few jobs and pressure on other tradable sectors. Diversification is the policy response.
The factors of production are land, labour, capital and entrepreneurship. Every choice has an opportunity cost - the value of the next best alternative forgone - illustrated by a production possibility curve: points on the curve are efficient, inside it are inefficient, outside it are unattainable without growth. Also know formal versus informal employment, inflation, types of unemployment, the balance of payments, the Gini coefficient and the HDI.
Traps
Do not treat more GDP as more development. Per capita GDP is an average, not a household. Mining is not a secondary activity. GDP is output within borders; GNP is income of residents wherever earned. The informal sector is undercounted, so official figures understate real activity.
Rule of thumb
Test any project with three questions: does it raise output (growth), does it spread the benefit (jobs, skills, equity), and can it be sustained (finance, environment)? A 'no' anywhere signals a development failure.