What is the meaning of Productive factors? Concept, Definition of Productive factors

Definitions and concepts of productive factors

Definition of productive factors

Factors of production are different resources that contribute to the creation of a product. Some free goods that also contribute to the production, such as air or the force of gravity, are not considered the same factors since they do not fall in economic transactions and its price is nulo.

Classical economics

Classical economists used three factors defined by Adam Smith, each of whom participate in the result of production through a reward set by the market: land (which includes all natural resources), work and Capital (which refers to machinery and equipment used in production).
You should keep this - Smith, David Ricardo, etc.-classical economists to subsume in "work" or "work" an element that the physiocrats considered a fourth factor: the entrepreneurs. For Smith the role of such persons was only monitoring, thus reduces to "mere work" from "Secretary of confidence". (see Manager). That situation began to change with Jean-Baptiste Say, but even so the "entrepreneurs" not reganaron its position as the fourth factor. Work is one of the three factors of production and human resources, that man, has to survive through physical exertion or social development.
The Earth
The land factor is what humans find in nature, in the broad sense, refers to the set of natural resources used in the production process. It comprises the actual Earth, water, air, plants, animals, minerals and energy sources. The Earth has natural resources; geographic location used for production processes of common goods.
The work is a highly differentiated factor that encompasses a number of trades and professions of very diverse naturaleza.1
The resources that are used to produce goods and services constitute the capital.3 Classes can be distinguished:
• Physical capital: consists of the tangible material elements: buildings, raw materials, etc.
• Human capital: education and vocational training of entrepreneurs and workers of a company.
• Financial capital: is the money that is required to form a company and keep its activity...


It is a factor of particular relevance in recent times.
• Manual production: one in which human beings provides strength and management tools.
• Mechanized production: one in which machinery provides the strength and human tools.
• Technified production: one in which the machine provides the strength and controls tools.

Current economic science

These 3 classic factors are in current economic science in the process of evolution towards a more complex structure:
The land factor (increasingly more altered by human intervention) is considered today, either as a component of capital, either as a component of a more comprehensive natural factor (natural resources or natural capital).
In the economy of knowledge and enterprise development produced since the end of the 20th century, it is considered that its conjunction with the science and technology (what is called r & d - research and development - or even r - research, development and innovation-) is a fourth factor of production that characterizes more and more production in developed countries. At the same time, the notion of physical capital or financial capital is added the human capital or intellectual capital, even social capital as an explanatory variable of the productivity improvement that does not result from other factors.
For some they can simplify new factors of production on the following factors:
mental capital •
• technical capital
• material work
• intangible capital (savoir faire, organisation, computable but incorporeal assets, immaterial labour, knowledge economy).
The investment allows you to increase the volume of production factors. The training can be considered as a form of investment, because it increases the capabilities of the worker and the production.

Concept of productive factors

Classical economists considered that to produce goods and services, it was necessary to use some resources or factors of production: land, labour and capital. This classification of factors is still widely used today. Land means not only agricultural land but also the urbanized land, mineral resources and natural resources in general. Capital refers to the set of resources produced by the hand of man that are needed to manufacture goods and services: machinery or industrial facilities, for example. You should make that clear since the word 'capital' is used many times incorrectly to designate any large amount of money. The money will only be capital when it will be used to produce goods and services, in which case it will be called financial capital. The money that will be used to purchase consumer goods can not be called capital. Work means human, both physical and intellectual activity. In reality all productive activity performed by a human being always requires some physical effort and previous knowledge.
This classification of productive factors biunivocamente corresponded to a "sociological" analysis of economic system in times of classical economists. In England in the 18th century there were three distinct social classes: the aristocracy, owner of the land, the bourgeoisie, owner of the capital, and workers. The justification of the income of the aristocracy and the bourgeoisie was the remuneration of the factors that possessed and which engaged in production. At present the classification has lost much sense. There is today a gentry separated from the bourgeoisie and is common to find workers who own some shares and are also home owners.
The classic thought to grow economically, to produce more, enough with the increase in the number of available factors, mainly the labour and capital. We now know that the most important role in the economic growth advances have it in scientific and technical knowledge. We could therefore add to the three factors of production two more: human knowledge which are built into the factor labour ("know-how") and technology, or simply technical, is incorporated into the capital.

Definition of productive factors

They are the resources that a company or a person uses to create and produce goods and services.
As factors of production is defined by Vidal, j. (1997), "factors of production are the items acquired by the entrepreneur to develop in the process of production of goods."
It considers that there are three main factors of production: capital, labour and land.
• Capital: Refers to all those goods or manufactured articles in which an investment has been made and that contribute in the production, for example: machines, equipment, factories, warehouses, tools, transportation, etc., all these are used to produce other goods or services.
According to Vidal, j. (1997), defines Capital "capital consists of the set of buildings, installations, industrial equipment, machinery, etc., used in the productive activity".
• Work: Refers to all human, physical and mental capacities that workers possess and which are necessary for the production of goods and services.
According to Vidal, j. (1997), defines the work "work refers to the physical and intellectual capacities of the people involved in the production process and which constitute the human resources".
• Nature: This factor of production applies not only to the land itself (do the area used for activities that generate a production? Breeding livestock, sowing, planting of crops, construction of office buildings, etc.). In the land factor all natural resources of utility are also included in the production of goods and services, forests, mineral deposits, sources and deposits of water, wildlife, etc.
According to Vidal, j. (1997), defines the land or nature "is a broad concept that includes all the features of the terrain: the riches of the subsoil (mineral waters), climatic conditions, etc".
Each of these factors has a compensation or a return. For example, capital compensation benefits or profits from the higher value that adds to the products, the work has as compensation wages, and Earth has as compensation income obtained from it to use it.
Capital = company

Concept of productive factors

Factors of production are items or resources that requires productive economic chain, which maintains the operation adapting social and economic circuit of a place. Put another way, the productive factors are the means necessary for the production process.
Both companies and individuals, who are in condition of producers, require production factors to obtain their goods or services. In addition, the supply and demand of these factors, regulates the price of them.
There are three factors of production: the nature factor, the factor labour, and capital.
Nature factor is constituted by natural sources, which provide the raw material, which begins the productive chain. Within this factor are for example: land used for agriculture and livestock, flora and fauna, fields, forests, energy from nature (e.g.: hydroelectric power, wind power).
The labour factor is composed of the effort or the human capabilities (of the worker), which can be both physical and intellectual; in both cases, applied to the raw material. The factor labour benefit both large and small producers, and the worker itself, because when you sell your effort, it receives a wage that serves to maintain economically. In this way, the benefit is reciprocal, between employers and their employees (though employers generally receive higher profits).
The capital factor is the one where are the elements or economic means, such as infrastructure, machinery, money, and other means of production; that you apply to the above factors (nature and work). This factor enables the business of a company.
Money is one of the most important production elements, as obtained through the same raw materials, the factor nature; employees, the work factor; and the means of production, of the capital factor. With large amounts of money acquired advanced technology, which usually influences greatly and increasingly (since we live in a globalized world and new technological frontiers beyond day to day), on the success of a company. In addition, the importance of money is currently due to most of the regions of the planet to exist within a capitalist system.

Definition of productive factors

Productive factors are called to those necessary elements so that it can perform raw thecityscape products developed or industrialized, to give them added value, and used in combined mode.
For the classical economists, based on the ideas of Adam Smith (1723-1790) the factors of production are: the Earth and all the resources given by the nature where man has not taken intervention in their manufacture (energy sources, plants, animals, water, air and minerals); human labour, either physical or intellectual; both factors called originals; and the capital, derived from the previous factor (money for production, and tangible goods towards the same goal: buildings, machinery).
Scientific and technological advances have led to the existence of a fourth productive factor, which has become the most important productive development that requires investments in increasingly complex machinery, for which assistance to operate them is much greater. At the same time the land factor is conceived as part of the capital, as natural capital.
The price of each factor of production will influence the final cost of the product. Human labor is paid a salary; land and capital through one income some of the productive factors present the problem of being non-renewable as with some sources of energy such as oil, that must be replaced when it runs.
The physiocracy the most important productive factor was land, trade and industrial activity to be sterile. Capitalism, argues that the value is given by the scarcity of goods or for work that is assigned to produce them, is based on property deprived of the means of production, with freedom of prices, while these are common property, in communism.

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