Describe how South Korea has the ability to produce wealth as it relates to the five factors of production land, labor, capital, knowledge, and entrepreneurship
(Solved Homework): Describe how South Korea has the ability to produce wealth as it relates to the five factors of…
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South Korea is an emerging nation , quickly growing in terms of per capita GDP than its neighbouring countries. It is geographically placed in between China, Japan and Russia which can be a boon or a bane for its economy.According to the five factors of production,
Land: South Korea has created wealth using land-reforms and giving more importance to farming and other agricultural policies aiding farmers to grow more. South Korea’s GDP from land depends on exports in food, machinary and chemical compounds. Also tourism has increased over the past 25 years to south korea due to diverse programs/packages incorporated to attract foreign tourists.South Korea has also hosted an Olympic event in 1988 and has gained attention on the world screen.
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Labor: Though labour is cheap in South Korea it is not able to match its neighbor, China in this regard.But many Labor reforms brought out by the governement has helped South korea in quickly growing and developing. Much of this aspect may be due to the fact that the country has a very low birth to death ratio. Many programs have been adopted by the governement including public work scheme, to stabilise and sustain growth in the country in this regard. Unemployment rate is at 3% which is very commendable for a nation that grew tremondously within a working life.
Capital: South Korea has extended its ties to many countries uincluding Uganda in economic development. Policies to increase wealth in terms of capital equity and investments have been passed by the government but one point to note is that South Korea has a relatively open financial system which makes its position very unbalanced and vulnerable to the volatility of the markets. With these challenges South Korea has attracted many conglomerates to invest in the country and shown to the world that with determination and grit a country can achieve great heights.
Knowledge: South Korea spends on average more than the profits in Rand D initiatives and this can be seen in companies which have set global benchmarking standards such as Samsung, LG and Hyundai Motors.
Enterpreneurship:Self employment rate is close to 30% which is very high for any country and this shows that many of the industries have been started by individuals. By aiding these individuals with the right resources the country has improved itswealth over the years.
