factors of production

The factors of production are the resources which allow the production of goods and servives to take place. They are the inputs for the production process. They are divided into four types:

• Land - the natural resource, including minerals in the earth and under the sea.
• Labour - the human resource. Said to be the most important factor of production.
• Capital - the man-made resource, including machines, tools and buildings, as well as cash.
• Entrepreneurship - the skills of taking risks and making decisons.

Different countries use these resources to a differing level depending on what is available - in countries such as China where labour is plentiful, production is labour-intensive. In countries where capital is plentiful, production is capital-intensive.