Mobility Of Factors Of Production In Economics

Mobility Of Factors Of Production

Factors of production are those means which help in the manufacture of goods and services. Land, labor, capital and organization are the four factors of production in Economics. These factors must he transferred from inefficient and uneconomic industries to those efficient and economic industries. Such a transfer or movement of factors from one industry to the other is known as mobility of factors of production.

Mobility of factors of production in economics may be either vertical or horizontal. The flexibility and adaptability of the economy depends on the mobility of factors. If these factors are not perfectly mobile, it is very difficult to bring changes in the economic system.

Types of mobility of factors of production:

Factors of production (except land) move from one industry to the other industry for securing better income. The mobility of factors of production may be classified into three types. They are:

  • a) Geographical mobility
  • b) Horizontal mobility
  • c) Occupational or Vertical mobility.

These different types of mobility of factors of production in economics are explained as below-

  1. a) Geographical mobility: Geographical mobility means the movement of factors of production (except land) from one region, state or place to the other regions, states or places. Several factors like improvement in the means of communication and transport, education and literacy programmes, attachment to motherland, linguistic feelings etc. are responsible for the geographical mobility of factors of production. Geographical mobility may be international or national or regional. We observe the fact that doctors, engineers and other technocrats of India have been migrating to the advanced countries for want of better salaries and facilities.
  2. b) Horizontal mobility: Horizontal mobility implies the desire of the laborers for moving from one industry to the other in the same place and in the same occupation. This type of mobility is very easy.
  3. c) Occupational mobility: Occupational mobility  is somewhat difficult. The reason is that it requires excellent knowledge, technological efficiency and experience and dynamism. Invention of new machinery and their use in industries spread of education among the laborers, provision of training and reorientation courses by the government etc., lead to the increase in the occupational factors of production. Normally new industries require less number of laborers. Marginal changes are enough. So naturally the laborers will have the inclination of mobility for bringing changes in production. Additional labor force which migrates to towns in search of jobs may be employed in new industries without any difficulty.

Another two types of factors of production in economics are-

Capital — mobility: When compared to labor, capital has less mobility. But the capital goods are used for producing different types of goods and services. Additional money capital entering into the market may be transferred to the industries which have chances for development. Hence capital has also mobility for bringing changes in volume of production.

Land —mobility: Land has no mobility. It is immobile in the sense that we can’t shift a portion of land of a particular area to the other area. But the yield coming from land may be shifted to different areas. Hence it is considered that land also has the characteristic of mobility. We may conclude that factor of production possesses mobility. This mobility makes them to introduce new techniques and to increase output in different industries.

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