LandPhysical land and the resources that come from it. For example, a hotel that produces value by being on a beach or a forestry company that harvests value from forests. In this context, land is an extremely expansive concept that includes oceans and waterways.
Data Center Land
Rooftop Space for Solar Panels
LaborThe productive effort of people. This is influenced by factors such as talent, skills, knowledge, capabilities and health.
Customer Service Representatives
Workers on a Production Line
CapitalCapital are human built things that make us more productive. This can include tangible capital such as a hammer and intangible capital such as software.
The items above are only capital where they are used to produce goods and services. For example, if you run a business out of your home, your house is used as capital.
EntrepreneurshipEntrepreneurship is the process of creating value with the other factors of production. You can't explain productive output without it as one firm or country may produce more than another with less labor, less land and less capital. The following are common examples of entrepreneurship.
NotesEnergy and materials are secondary factors of production that are obtained from land, labor, capital and entrepreneurship.
|Overview: Factors Of Production
Productive elements that can be used to create goods and services.