At WiseGEEK, we're committed to delivering accurate, trustworthy information. Our expert-authored content is rigorously fact-checked and sourced from credible authorities. Discover how we uphold the highest standards in providing you with reliable knowledge.
An economic growth plan is a blueprint that a government adopts to increase the country's productivity and overall prosperity. Ordinarily, this type of plan forms part of the basis of an administration's governing strategy and is proposed to the public during elections and implemented while the elected administration is in office. The state of the economy is a key barometer of the success of any governmental administration, so the effectiveness of the economic growth plan that is adopted can make or break political careers.
Every country has a limited number of resources and a citizenry with unlimited wants. The state of the economy is a measure of how efficiently the country manages those resources to meet the needs of its residents. A stable economy reflects high levels of productivity, in that most of the labor force is gainfully employed, businesses can cost-effectively produce and market goods and services and consumers can afford to buy those offerings.
If a government stands pat on the current state of the economy, eventually people's wants will outstrip supply. Either the population will continue to grow, demanding more output from the economy, or new and different products will be developed elsewhere, siphoning jobs from outdated industries and decreasing employment levels and general prosperity. To stave off this sort of economic decline, governments seek to grow their economies, so there is a continuing increase in per person productivity.
Governments use an economic growth plan to outline a strategy to spur innovation, improve competitiveness and enable a country's business sector to produce more goods and services. Typically, the plan will specify how the government will invest public money, structure taxes and regulations and offer business incentives to accomplish these goals. Within this planning framework, a government can adopt an array of different strategies to try to achieve successful economic outcomes.
For example, to achieve the goal of spurring innovation, a government can invest in emerging technology. It can offer government-backed loans, tax breaks, incentives and subsidies to companies to enable them to pursue an emerging technology until the technology reaches a development stage where it is profitable on its own. An economic growth plan can propose lowering export barriers, taxes and fees to encourage businesses to expand into international markets. Likewise, the plan can propose changes to taxes and regulations that will enable certain industries to access restricted resources, hire workers or manufacture products without government hurdles that impact profitability.
These economic growth plan strategies are only a small sample of the types of policies that a government can adopt to create the infrastructure necessary for business industries to thrive. Administrations tend to adopt an economic growth plan, and then adjust it over the course of time if it seems not to be working. The problem with any plan that attempts to impact the economy at a macro level is the slow evolutionary cycle of economic change, since politicians tend to need immediate results to support their positions.