Resource is represented by the level of something at any given time (no time dimension), in contrast to the stream, which expresses the change of something per time unit. Resource can be considered as the amount of water in the lake at any given time, a stream is the amount of water that flows through the lake in the specified time interval. In company, resources are presented in balance sheet of the company, at a particular point in time, e.g. 31 December. A resource can also be defined as the amount of one particular component of assets at some point in time.
In economics, the concept of resources or effort (e.g., machinery, raw materials, work) means all tangible and intangible components of production process Concept of resource can be used in the context of company-owned assets or assets in the entire economy.
The resource is one of the basic concepts with which science of economy operates. One of the major economic problems is the existence of a conflict between the unlimited human needs for goods and services and the limited resources necessary for their manufacture. Widely analyzed problem in economics is to explain the process of allocating scarce resources between the competing applications and between competing groups owning them. Normative economics refers to efficient resource allocation in the Pareto sense. It means an such distribution of goods between the different actors in the economy that it is possible to improve the situation of some without worsening the other.
Types of resources
Linking and coordinating all corporate resources to achieve goals of organization is the key management process. Resources used by all types of organizations can be divided into four basic types:
- Human resources - skills, knowledge, capacity and disposition of all persons employed in the enterprise.
- Cash Resources - financial capital of an organization used to fund both current and long-term activities.
- Tangible resources - includes raw materials, parts, production offices and all kinds of equipment.
- Information resources - include all kinds of useful information and data needed for the effective decision making.
There is also a distinction between:
- Renewable resources - natural resources (e.g. arable land), which regularly provide income and through the rational management can indefinitely provide income.
- Non-Renewable Resources - natural resources, whose supply is basically constant, and whose recovery is not fast enough to have any economic significance.
Term interchangeably used in economics is: factor of production. This concept divides the resources in the entire economy into three main categories:
- Capital - resource of physical capital e.g. all goods that contribute to the production of more goods and services,
- Ground - is a factor of production provided by nature,
- Work (labor resource) - e.g. all individuals working or seeking employment.
- Romer, P. M. (1990). Capital, labor, and productivity. Brookings papers on economic activity. Microeconomics, 1990, 337-367.