Economic diversity or economic diversification refers to variations in the economic status or the use of a broad range of economic activities in a region or country. Diversification is used as a strategy to encourage positive
economic growth
Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate o ...
and development.
Research shows that more diversified economies are associated with higher levels of
gross domestic product
Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is of ...
.
Diversification types
# Non-connected diversification - creating a new area. The process is slow, because it is needed to create a whole infrastructure, but the profit would be higher.
# Connected diversification is based on an economical mechanism for expanding the available potential. For business development it means low risks and good margin.
# Combined diversification - more frequently both methods are used together.
Diversification examples in countries
Good examples of national economy diversification are
Chile
Chile, officially the Republic of Chile, is a country in the western part of South America. It is the southernmost country in the world, and the closest to Antarctica, occupying a long and narrow strip of land between the Andes to the eas ...
,
Malaysia
Malaysia ( ; ) is a country in Southeast Asia. The federal constitutional monarchy consists of thirteen states and three federal territories, separated by the South China Sea into two regions: Peninsular Malaysia and Borneo's East Mal ...
and
Brazil
Brazil ( pt, Brasil; ), officially the Federative Republic of Brazil (Portuguese: ), is the largest country in both South America and Latin America. At and with over 217 million people, Brazil is the world's fifth-largest country by area ...
.
See also
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Diversification (finance)
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Diversification (marketing strategy)
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Commodity dependence
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Financial inclusion
Financial inclusion is defined as the availability and equality of opportunities to access financial services. It refers to a process by which individuals and businesses can access appropriate, affordable, and timely financial products and service ...
*
Western Economic Diversification Canada
References
Distribution of wealth
Strategic management
Economic development policy
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