Lesson 6:

PHASES OF
ECONOMIC
DEVELOPMENT
Learning objectives:
Identify what is the Differentiate the
meaning of
01 03 phases of
economic
development economic
development and
its impact to the
Discuss the different business
phases of economic environment
02 development
 Key terms
ECONOMIC DEVELOPMENT
- is a total process which includes not only economic
growth or the increase in the given amount of goods and
services produced by the country’s economy, but also
considers the social, political, cultural, and spiritual aspects of
the country’s growth.
ECONOMIC GROWTH
- increase in the given amount of goods and services produced by
the country’s earning.
 ROSTOW
STAGES OF
GROWTH
MODEL
By Walt Whitman Rostow
01 TRADITION
AL SOCIETY
● Modern science and technology are either not
available or are not being systematically
applied.
● A large proportion of productive resources are
devoted to agriculture such as hunting,
fishing, and gardening.
● There is low economic and social mobility
and changes are seen negatively.
 PRE-CONDITIO
NS TO TAKE
02 OFF
 This stage of economic development is a result of
the industrial revolution. There is now an external
demand for raw materials which social, political, and
economic changes.
1. A change in society’s attitudes
towards science, risk-taking,
and profit- earning;
2. The adaptability of the labor force;
3. Political sovereignty;
4. Development of a centralized tax
system and financial institutions; and
5. The construction of certain
economic and social overheads
like railroads and educational
institutions.
03 THE
TAKE-OFF
● This stage is characterized by dynamic economic
development.
● The crucial stage which covers a relatively brief period
of two or three decades in which the economy
transforms itself in such a way that economic growth
subsequently takes place more or less automatically.
 In other words, in this stage
urbanization increases,
industrialization proceeds, and
technological breakthroughs now
occur.
 DRIVE TO
MATURITY
04
● In this stage, economic and
technical progress dominates.
● Multiple industries expand and
new industries or businesses
take root.
Consumption increase, the rapid development of transportation, infrastructure
occurs, and large scale investment in social infrastructure such as schools,
universities, hotels, and hospitals take place.
05 AGE OF MASS
CONSUMPTIO
N
● During this stage, the per capita
real income increases to the
level at which a large number
of people can afford
consumption transcending the
basic food, shelter, and clothing
requirements.
● They have disposable income
beyond all basic needs for
additional goods.
● Meaning to say, most of the
society live in prosperity, and
persons living in the society are
offered both abundance and a
multiplicity of choices.
VIDEO
In a nutshell…
“The simple man believes every
word, but the prudent man
watches his steps.”

Proverb 14:15
ACTIVIT
Y
Please get ¼ sheet of paper~
 IDENTIFICATI
ON
1. It refers to an increase in the given amount of goods and services
produced by the country’s earning.
2. This stage where a large proportion of productive resources are
devoted to agriculture.
3. This stage is characterized by dynamic economic development
4. It is a total process which includes not only economic growth or the
increase in the given amount of goods and services produced by the
country’s economy.
5. A change in society’s attitudes towards science, risk-taking, and
profit- earning is under what stage of development?
 MULTIPLE CHOICE
6. The second stages of economic development primarily
involves___________.
A. The complete abandonment of primary
economic activities
B. External investment and greater exploitation
of natural resources
C. The introduction of natural resources from
external sources
D. The movement towards a fluid and
meritocratic society
 MULTIPLE CHOICE

7. Rostow's Stages of Economic

Growth include all of the following
EXCEPT ________ .
A. Traditional Society
B. Drive to Maturity
C. Postmodern Society
D. Take-off
 MULTIPLE CHOICE
8. The fourth stage of Rostow’s Stages of Development primarily
involves ___________.
A. the introduction of investment from external
sources
B. the development of a large commercial
economy and favorable integration into
the global economy
C. the development of environmental policies and
social welfare policies
D. the complete abandonment of primary and
secondary economic activities
 MULTIPLE CHOICE

9. The fifth stages primarily involves _________.

A. political unrest and revolution
B. large scale investment in
manufacturing and infrastructure
C. the development of environmental
policies and social welfare policies
D. consumerism and mass consumption
 MULTIPLE CHOICE
10. The third stages of development primarily involves
_________.
A. large-scale investment in manufacturing
and infrastructure
B. a change in the social or political structure
of a country
C. the complete abandonment of primary
economic activities
D. the introduction of investment from
external sources