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Economic change is a shift in the structure of an economic system. This results in changes to societies, cultures and everyday life on a global or national basis. Economic change caused by technology, politics and progress is a regular feature of history. The following are illustrative examples of economic change.
Economic SystemsChanges in an economic system such as a shift from a centrally planned economy to a free market system.PoliticsPolitical shifts such as the formation of the European Union that created the world's largest single market system in 1999. Economic PolicyChanges in economic policy such as the end of the gold standard and introduction of a system of pure fiat money initiated by the United States in 1971.
Social ChangeSocial change such as the entry of more women into the workforce. This is a long term trend that accelerated after WWII in many countries.DemographicsChanges to the demographics of a nation such as an aging population.LegalLegal changes in areas such as business regulations and property rights. For example, environmental laws could create new industries and destroy old ones if they can not adapt.
Technology can lead to changes in productivity, efficiency and employment demand. For example, the use of digital computers by businesses beginning in the 1960s led to some productivity improvements and many new industries. Historically, it is common for predictions of technology driven economic change to be overly dramatic.
DevelopmentThe development of the soft and hard infrastructure of a nation. For example, a country that builds institutions, transportation systems, technology infrastructure and resilient cities that make its economy more efficient.Structural changes to markets or the introduction of new markets. For example, ecommerce is a relatively new market for goods and services.
Shifts in supply such as a shortage caused by a war. Supply can also suddenly increase due to technological advancement. Demand shifts such as changing consumer needs and preferences. For example, refrigerators cause a shift in food consumption patterns when they are adopted by consumers in a developing country.
TradeShifts in trade such as the long term trend towards more international trade known as globalization. On the flip side, a trade war can cause a sudden reduction in trade.DisastersA disaster or war can result in sudden change such as a severe shortage of raw materials, parts and goods.Economic problems such as a depression or hyper inflation can permanently change the structure of an economy. A business model is a way of capturing value. The global economy is mostly based on a handful of business models. As such, new business models or shifts in business models can have a significant impact. For example, many advanced economies are experiencing a shift towards service industries as a greater percentage of economic output.|
| Type | | | Definition | A shift in the structure of an economic system. | | Also Known As | Structural economic changeEconomic shift | | Related Concepts | |
Economics
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A list of the basic concepts of technology economics.
An overview of the theory of accelerating change.
An overview of the Fourth Industrial Revolution.
An overview of six degrees of separation.
An overview of the importance of technology.
An overview of the potential advantages of technology with examples.
An overview of technology change with examples.
An overview of modern technology with examples.
Everyday examples of economics.
An overview of economic scale with examples.
An overview of trade wars with examples.
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A complete overview of free markets.
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