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)
In finance, diversification is the process of allocating capital in a way that reduces the exposure to any one particular asset or risk. A common path towards diversification is to reduce risk or volatility by investing in a variety of assets. I ...
*
Diversification (marketing strategy)
Diversification is a corporate strategy to enter into a new products or product lines, new services or new markets, involving substantially different skills, technology and knowledge.
Diversification is one of the four main growth strategies defin ...
*
Commodity dependence
Commodity dependence is a high proportion of commodities in a country's exports. Therefore, a commodity-dependent country is a country in which commodities constitute the predominant share of its exports, that is when more than 60% of the merchan ...
*
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 In Canada, the Regional Development Agencies (RDA) are the seven federal government agencies responsible for addressing key economic challenges and furthering economic development, diversification, and job creation specific to their respective regi ...
References
Distribution of wealth
Strategic management
Economic development policy
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