Economic Resources – factors of production

Factors of production

The world has a limited number of resources (or factors of production). These can be classified as:

• Land: not just physical land, includes resources underground and in the sea/air

• Labour: is an economy’s workforce and the skills/training they have

• Capital: is the manufactured stock of tools, machines etc used in the production of goods and services

• Enterprise: is skill entrepreneurs have, specifically in organising other factors of production and taking risks by setting up business enterprises.

Renewable and non-renewable resources

Resources can also be classified as renewable and non-renewable:

• Non-Renewable Resources: are resources that will never be replaced once they are used

• Renewable Resources: are resources which can be used and replaced

However, sustainable resources are a particular type of renewable resource. Sustainable resources are ones which are used up at the same rate as they are renewed i.e. if they are managed well they are renewable but if managed badly they are non-renewable. For example, a forest is a

renewable resource but it is only sustainable if due to good management it survives over time despite commercial logging etc. Clearly if the forest is cleared and a factory built on the land the forest ceases to be a sustainable resource at all.