Out of the 195 nations in the world, only 80 are officially classified as developed countries. A developed nation is one that provides its citizens with a high quality of life and has an advanced economy based on automation and technology. There are many differences between the developed nations of the world. However, one thing that unites them is that they are all prosperous. In fact, all developed nations in the world are rich nations. Why is this? Well, let us explain…
1. Developed Countries Have Large Economies
A first reason why developed countries are rich is because they have large economies.
The size of a country’s economy is measured by its GDP – gross domestic product. This is essentially the total value of all the goods and services a nation produces. Developed countries have higher GDPs. This is because their advanced economies allow them to produce higher quality goods and services that include significant value add. These goods and services sell for hire prices, as they are of more value. As a result, developed countries become wealthy.
People in developed countries are able to benefit from the size of their nation’s economies. Larger economies mean more and better paying jobs. Jobs in developed nations are often highly skilled, and therefore pay better salaries. As a result, people in developed countries are able to become richer.
Developed countries have dynamic economies that utilize advanced technologies. As a result, they have larger GDPs, which in-turn contributes to developed countries becoming wealthy.
2. Developed Nations Have Good Infrastructure
A second reason why developed countries are rich is because they have good infrastructure.
Infrastructure is vital to a country becoming prosperous. Physical constructions such as roads, railways, airports, utilities and tele-communication networks are needed to move people, goods and information around a country, as well as for people to live good lives. Developed countries have invested heavily in infrastructure. They also have the funds to maintain the infrastructure they have. This means businesses are able to operate affectively, and people are able to get where they need to quickly and efficiently. This directly leads to a nation becoming prosperous.
One factor that characterizes a developed nation is having advanced infrastructure. This means the they have been able to use technology to improve infrastructure across the nation. It also means all parts of the country, including rural and remote areas, have good quality infrastructure. These factors have made developed countries wealthy because it creates a virtuous cycle – as infrastructure improves people become more prosperous, which in-turn allows the government to collect more revenue through taxation, which they can then partly spend on improving and maintaining the nation’s infrastructure. This is one reason why developed countries are wealthy.
3. They Have Adopted Advanced Technology
A third reason why developed countries are rich is because they have adopted advanced technologies.
For a country to become wealthy, it must be technologically advanced. This not only means that its businesses utilize the latest technologies in manufacturing and working processes, but also that the wider economy incorporates information technology. This means people all over the country have access to computers and the internet, for example. It also means that all aspects of how a nation functions, from the tax collection system to the infrastructure, utilizes technology to ensure its efficiency.
Developed nations have been able to ensure technology is in-place throughout their economies, and this makes them rich.
As well as utilizing technology throughout their economies, developed countries have also ensured that their populations are educated enough to develop, use and maintain advanced technologies. This has then resulted in good jobs, more competitive businesses and better economic growth. As a result, developed countries have become wealthy.
4. Developed Countries Have Accountable Political Systems
Another reason why developed countries are wealthy is because they have accountable political systems.
An accountable political system allows a country’s rulers to respond to the wishes of the population. It also ensures pollical leaders work in the interests of the people, and limits corruption and nepotism. Almost all developed countries have political systems that ensure accountability. They have a range of checks and balances so that pollical power is curtailed. This generally means that sound pollical decisions are made, and that a nation remains mostly stable. This has led developed nations to becoming prosperous.
There are many way that a pollical system can ensure accountability. These include regular free and fair elections, divisions of power, strong judicial systems and civil protections. It is not a coincidence that many developed countries are democracies. Even those that aren’t, have a degree of accountability in their political systems. It is why all developed nations are rich.
5. They Have Good Education Systems
One reason why developed countries are rich is because they have quality education systems.
Developed countries have good education institutions. They also ensure that all children have access to schooling by making sure that education is free and widely available. This has helped developed countries become rich.
Education is another virtuous cycle for developed nations. As countries develop, they have more revenue to fund good schools. This makes their populations more educated, which as a result allows them to take good jobs and start successful businesses. This, in-turn, grows the economy, which means the government can collect more revenue, part of which it spends on ensuring good education for all. This is essentially the reason why quality and accessible education systems maintain developed countries as wealthy.
Not only do children in developed countries receive free good quality schooling, but develop nations also fund world class higher education institutes. Having a larger proportion of young people able to go to university is another factor that makes developed countries more prosperous.
6. Developed Countries Provide Quality Healthcare
A further reason why developed nations are wealthy is because they provide good healthcare to their populations.
Ensuring that everyone in a country can access good quality healthcare when they need it is vital for a country to become prosperous. When people cannot receive medical assistance, they are often forced to drop out of the work force. Family of sick people also often have to become economically unproductive and look after sick relatives. Developed nations can afford good healthcare systems and so this has allowed them to become richer.
Developed countries are able to ensure they have good medical facilities throughout the nation. This means even people in remote and rural areas can get the healthcare they need. Developed nations can also afford to subsidize healthcare, meaning people on low incomes do not go without medical assistance. These factors combined has allowed developed nations to be more economically productive – a result of which is that they have become wealthy.
7. Developed Countries Attract Investment
A final reason why developed countries are rich is because they are able to attract investment.
There are two main ways that developed nations have become wealthy by being attractive places for people to invest. The first is that people with money to invest within developed nations are more likely to invest their money at home. Developed economies are stable, have profitable businesses and strong investor protections. This means people from developed nations see their own economies as good places to invest their savings or start businesses. As a result, developed nations retain more of their wealth and this helps ensure their prosperity.
A second way that developed nations ensure prosperity is by being places the foreign investors choose to place their money. People who have money to invest in developing countries often park a proportion of their portfolio in investments in the developed nations. This is essentially for the same reasons – growth and security – that people from developed nations do. However, it means that developed country economies attract significant investment from around the world, and this is one factor that makes these countries rich.