The object of economic development is the creation of wealth in a country or regions. To a large extent countries assume that economic development equates with the well-being of their inhabitants.
Public policy generally aims at continuous and sustained economic growth and expansion of the GDP or national economy so that 'developing countries' become 'developed countries'. This development process supposes that the necessary governance, public infrastructure and legal system exist, and that adjustments are made to economic policy which give incentives for innovation and for investments so as to develop an efficient production and distribution system for goods and services.
The essential components of economic development are
- production - encouraging entrepreneurs to find goods or serivces which they can produce reliably and sell competitively
- investment - finding investors to finance the establishment of businesses or the upgrading of facilities
- labour - improving the productivity of human resources by education and enabling a labour market
- trade - finding goods to export in order to purchse goods from other countries.