An economic resource is a right by the reporting entity that has the potential to produce economic benefits.
An economic resource in general has the form of an asset. This information is provided in the financial position.
Potential to produce economic benefits – Within an economic resource, a feature that already exists and will produce economic benefits in at least one circumstance.
Economic resource 1: Land
Land is an economic resource that includes all natural physical resources like gold, iron, silver, oil etc. Some countries have very rich natural resources and by utilizing these resources they enrich their economy to the peak.
Such as the oil and gas development of North Sea in Norway and Britain or the very high productivity of vast area of farm lands in the United States and Canada. Some other developed countries like Japan have smaller economic resources. Japan is the second largest economy of the world but reliant on imported oil.
Economic resource 2: Labor
The human input in the production or manufacturing process is known as labor. Workers have different work capacity. The work capacity of each worker is based on his own training, education and work experience.
This work capacity is matters in the size and quality of work force. To achieve the economic growth the raise in the quality and size of workforce is very essential.
Economic resource 3: Capital
In economics, Capital is a term that means investment in the capital goods. So, that can be used to manufacture other goods and services in future.
Following are the factors of capital:
It includes new technologies, factories, buildings, machinery and other equipments.
It is the stock of finished goods or components or semi-finished goods or components. These goods or components will be utilized in near future.
New features of capital building, machinery or technology are commonly used to improve the productivity of the labor. Such as the new ways of farming helps to enhance the productivity of the agriculture sector and give more valuable jobs in this sector which motivates people to come out for work.
It is a stock of capital that is used to maintain the whole economic system. Such as roads, railway tracks, airports etc.
Economic resource 4: Entrepreneurship
The Entrepreneur is person or individual who wants to supply the product to the market, in order to make profit. Entrepreneurs usually invest their own capital in their business. This financial capital is generally based on their savings and they take risks linked to their investments. This risk-taking can be rewarded by the profit of the business. Entrepreneurship is, thus, an important economic resource.