Economic Resources (Factors, Levels, Characteristics, Classification and Examples)

The Economic Resources are not more than each one of the necessary inputs, and required by a company, to give fluidity to the process of production of goods for consumption or, for the provision of a service.

From the theoretical point of view of the economy, economic resources are part of the productive factors with which a company relies to maintain and be sustainable over time.

On the other hand, they are also usually described as material resources or not, tangible or not, that manage to meet the productive and / or commercial needs of any company.

It is therefore evident the great importance that economic resources have for any organization, whether it is a producer of goods or a provider of services, since without them their future as a commercial entity would not only be limited, but would quickly bring them to an end.

The participation of economic resources in the activities of any company, are characterized by the use of elements such as human talent, finance and business culture.

Productive factors

When talking about the economic resource, it is usually accompanied by the term productive factor or as a synonym for the factors of production, since the combination of these with the activities dedicated to the provision of services or the production of goods, adds value to everything the process in an integral way.

Adam Smith recognized 3 productive factors that participated in the economic activity, which were also rewarded:

  • The production factor Earth , consisting of soil, water, minerals, trees and the like. This factor is rewarded for rent
  • The factor of production Labor , made up of labor and manufacturing. Is rewarded for salary
  • The Capital production factor , composed of managerial, administrative or specialized human talent, as well as material and financial resources. It is rewarded for Interest

Economists nowadays also include science and technology as another factor of production, since they also consider them indispensable for productive activity.

In any case it is established that the national resources of any country are supported on several bases, the most important are three:

  • The Primary Sector : natural resources, raw materials
  • Secondary Sector : raw materials processing sector from the primary sector, mining, industry and the like
  • The Tertiary Sector : services, commerce, tourism, transport

Levels of Economic Resources

In the language of economists, a resource is an input or input to start the production process, anything could be cataloged under this concept, since even waste can be reused as fertilizer material in certain industries.

Thus, it is normal to establish certain levels of economic resources in order to identify them more precisely:

  • The Infrastructure : corresponds to the physical place where the productive activity is carried out, including the way of transporting it to its final destination, such as: railway, land, air communication means, buildings, factories, ports and the like .
  • Fixed Capital : is the capital invested in equipment, machinery and facilities directly related to the production of the goods or the provision of the service.
  • The Working Capital : it is the capital invested in the inventory and in the inputs that are part of the normal operating cycle of the company, as well as the activities related to sales.
  • The Productivity of Capital : is the investment that the company allocates to acquire new and advanced technologies to be used to improve processes and maximize the performance of both equipment and workers.

The Economic Resources and their Characteristics

The economic resources are characterized by:

  • Have a specific objective
  • They are usually of quantity is limited
  • Easy access
  • Can be transferred
  • They have the ability to meet the requirements of a company, economically speaking
  • Its combination with the productive factors accrues in the production of goods or in the provision of services

Classification of the Economic Resource

Traditionally, economic resources are usually classified as:

1.- Own Economic Resources

  • Cash
  • Properties contributed by partners
  • Benefits and accumulated reserves

2.- Foreign Economic Resources

  • Financing and loans granted by suppliers and creditors
  • Credits
  • Issuance of securities

Examples of Economic Resources

  • Estate
  • Social capital
  • Sales Collection
  • Movable property