Encyclopedic Entry

Some developing countries harvest renewable energy (such as wind) to bring electricity to rural populations.

Photograph Braden Gunem, MyShot

Another BRIC in the Wall
The economies of Brazil, Russia, India, and China are sometimes grouped together as "BRIC." These countries are not part of a political or trade alliance. However, they are all large countries with large economies that are growing very quickly. Some economists believe that by 2050, the economies of BRIC countries will be larger than the United States or the European Union. South Korea and Mexico are sometimes compared to BRIC countries.

The Good Life
The United Nations rates the development of nations using the Human Development Index (HDI). In addition to GNI per capita, the HDI takes into account literacy rates, school enrollment, and life expectancy. According to the HDI, in 2010 Norway was the most developed nation in the world. The United States was fourth.

Development is the process of growth, or changing from one condition to another. In economics, development is change from a traditional economy to one based on technology.

A traditional economy usually centers on individual survival. Families and small communities often make their own food, clothing, housing, and household goods. The economies of developing countries, which have largely traditional economies, often rely on agriculture. Developing countries also rely on raw materials, which can be traded to developed countries for finished goods. These raw materials include oil, coal, and timber.

Developed countries, which have modern economies, are more diverse. Their economies rely on many different people and organizations performing specialized tasks. Agriculture and raw materials represent only part of the economy of a developed country. Other sectors include manufacturing, banking and finance, and services such as hairdressing or plumbing. This vast economy results in a great variety of goods and services.

There is no single test to determine what is a developing country. One way to rate a countrys level of development is by the total value of goods and services the country produces, divided by the number of people in the country. This is called the gross national income (GNI) per capita.

Using gross national income as a measure of a regions economy, countries such as Liberia, which has a GNI per capita of $170, and Nepal, which as a GNI per capita of $400, are called developing nations. Developed nations have much higher GNI per capita. For example, Luxembourg has a GNI per capita of $69,390. The United States has a GNI per capita of about $48,000. Singapore has a GNI per capita of $34,760.

Signs of a high level of development include industrialization, the everyday use of advanced technology, and sophisticated systems of transportation and communication.

Levels of education are also related to development. Developed countries usually have higher literacy rates, meaning most of their population can read and write. More of their population is also enrolled in school. This is not always true, however. Cuba, a developing country with a GNI per capita of $9,700, has a very high literacy rate, 99.8 percent.

Measuring Development

Developed countries have a high life expectancy, or the average number of years a person can expect to live. Health care systems, including drugs, doctors, and hospitals, help people live longer lives. Japan, a highly developed nation, has the highest life expectancy of any country, at 82.7 years.

The age structure in developed countries usually has its largest population group between 15 and 64 years old. Countries whose age structure is very young (a large population under 15 years old) may have to spend more on education. People under the age of 14 typically cannot maintain steady, full-time work to support the economy.

The U.S. has a typical age structure for a developed country, with 20 percent of its population under 15 years old and 67 percent between the ages of 15 and 64. Half of the population (50 percent) of the developing country of Uganda is under the age of 14, with only 48 percent between the working ages of 15 and 64.


The unemployment rate can also be an indicator of the level of economic development. In developed countries, most adults usually work. The unemployment rate, or able adults who cannot find work, is often below ten percent. In developing countries, such as Zimbabwe, the unemployment rate can be as high as 95 percent.

Developed countries usually have a large middle class. Middle-class incomes fall between poverty and great wealth. Some developing countries have large populations living in poverty. In Haiti, 80 percent of the people live in poverty.

As countries begin to develop, their agricultural output usually increases. Improved technology allows fewer farmers to harvest more food. This raises the income of people in rural areas, as well as allowing more people to work in jobs outside agriculture.

Another sign of development is a growth in exports, or products grown or made in one country that are sent to another country for sale or use. A country can export raw materials, such as oil or corn. A country can also export finished goods, such as computer software.

The amount of electricity used by a country can also indicate its level of development. Electricity is used in homes, schools, and businesses. Factories use huge amounts of electricity. Electrification, especially in rural areas, is an important process for a developing economy. It allows factories, hospitals, and schools to stay open regularly.

Electrification is often very expensive. The high cost of oil, natural gas, and coal may slow the electrification process. Constructing facilities that run on hydroelectricity or nuclear energy often requires technology and money that developing countries do not have. Some developing countries, such as Bangladesh, are trying to use renewable energy, such as solar or wind, to bring electricity to their rural population.

Countries that are switching from agricultural to industrial economies and are experiencing rapid economic growth are sometimes called newly industrialized countries. They usually have lower poverty rates than less developed nations, but they have not yet reached the income and education levels of developed countries. Newly industrialized countries include India, Brazil, and Thailand.

Vocabulary

Term Part of Speech Definition Encyclopedic Entry

age structure

Noun

pattern of age distribution among a population.

agricultural output

Noun

total amount of goods produced in the agricultural industry.

agriculture

Noun

the art and science of cultivating the land for growing crops (farming) or raising livestock (ranching).

Encyclopedic Entry: agriculture

alliance

Noun

people or groups united for a specific purpose.

bank

Noun

organization that loans, protects, and exchanges money to and from individuals and organizations.

BRIC

Noun

term for the rapidly developing economies of Brazil, Russia, India and China.

coal

Noun

dark, solid fossil fuel mined from the earth.

communication

Noun

sharing of information and ideas.

developed country

Noun

a nation that has high levels of economic activity, health care, and education.

developing world

Noun

nations with low per-capita income, little infrastructure, and a small middle class.

development

Noun

growth, or changing from one condition to another.

Encyclopedic Entry: development

diverse

Adjective

varied or having many different types.

economics

Noun

study of monetary systems, or the creation, buying, and selling of goods and services.

economy

Noun

system of production, distribution, and consumption of goods and services.

electricity

Noun

set of physical phenomena associated with the presence and flow of electric charge.

expensive

Adjective

very costly.

export

Noun

good or service traded to another area.

farmer

Noun

person who cultivates land and raises crops.

finished good

Noun

item assembled and ready for sale.

gross national income (GNI)

Noun

total value of goods and services a country produces, divided by the number of people in the country.

harvest

Noun

the gathering and collection of crops, including both plants and animals.

health care

Noun

system for addressing the physical health of a population.

household goods

Noun

person or family's belongings, not including real estate or vehicles; including appliances, clothing, and furniture.

Human Development Index (HDI)

Noun

guide developed by the United Nations, measuring a country's achievement in three areas: life expectancy, adult literacy and school enrollment, and standard of living measured by the country's Gross Domestic Product per capita. HDI uses a scale of 0-1.

hydroelectricity

Noun

power generated by moving water converted to electricity. Also called hydroelectric energy or hydroelectric power.

income

Noun

wages, salary, or amount of money earned.

increase

Verb

to add or become larger.

industrialization

Noun

growth of machine production and factories.

life expectancy

Noun

average number of years a person lives.

literacy

Noun

ability to read and write.

maintain

Verb

to continue, keep up, or support.

manufacturing

Noun

production of goods or products in a factory.

middle class

Noun

people and culture characterized by incomes between the working class and the wealthy.

natural gas

Noun

type of fossil fuel made up mostly of the gas methane.

Encyclopedic Entry: natural gas

newly industrialized country

Noun

nation switching from an agricultural to an industrial economy and is experiencing rapid economic growth.

nuclear energy

Noun

energy released by reactions among the nuclei of atoms.

Encyclopedic Entry: nuclear energy

oil

Noun

fossil fuel formed from the remains of marine plants and animals. Also known as petroleum or crude oil.

per capita

Adjective

for each individual.

poverty

Noun

status of having very little money or material goods.

process

Noun

natural or human actions that create and change the Earths features.

rapid

Adjective

very fast.

raw material

Noun

matter that needs to be processed into a product to use or sell.

rely

Verb

to depend on.

renewable energy

Noun

energy obtained from sources that are virtually inexhaustible and replenish naturally over small time scales relative to the human life span.

rural area

Noun

regions with low population density and large amounts of undeveloped land. Also called "the country."

Encyclopedic Entry: rural area

sector

Noun

section or a part of something.

software

Noun

electronic programs of code that tell computers what to do.

sophisticated

Adjective

knowledgeable or complex.

specialize

Verb

to study, work, or take an interest in one area of a larger field of ideas.

technology

Noun

the science of using tools and complex machines to make human life easier or more profitable.

timber

Noun

wood in an unfinished form, either trees or logs.

traditional economy

Noun

production and exchange of goods and services that relies on local culture, local resources, and inheritance.

transportation

Noun

movement of people or goods from one place to another.

unemployment

Noun

state of not having a job.

United Nations

Noun

international organization that works for peace, security and cooperation.

vast

Adjective

huge and spread out.

wealth

Noun

amount of money or other valuable materials.


For Further Exploration

Articles & Profiles

Credits

Media Credits

The audio, illustrations, photos, and videos are credited beneath the media asset, except for promotional images, which generally link to another page that contains the media credit. The Rights Holder for media is the person or group credited.

Writers

Kim Rutledge
Melissa McDaniel
Diane Boudreau
Tara Ramroop
Santani Teng
Erin Sprout
Hilary Costa
Hilary Hall
Jeff Hunt

Illustrators

Tim Gunther
Mary Crooks, National Geographic Society

Editors

Kara West
Jeannie Evers

Educator Reviewer

Nancy Wynne

Producer

Caryl-Sue, National Geographic Society

Sources

Dunn, Margery G. (Editor). (1989, 1993). "Exploring Your World: The Adventure of Geography." Washington, D.C.: National Geographic Society.

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