Natural resources are resources that exist without any actions of humankind. This includes the sources of valued characteristics such as commercial and industrial use, aesthetic value, scientific interest and cultural value. On Earth, it includes sunlight, atmosphere, water, land, all minerals along with all vegetation, and animal life. Natural Resources are naturally occurring substances that have considered valuable in their natural form. Its value rests in the amount available and demands for it.
Natural resources may be further classified in different ways:
Resources can be categorized on the basis of origin:
Biotic Resources: Living things make up biotic resources. Think of lush forests, the crops we grow, diverse wildlife, and marine life like fishes. These resources are pretty cool because they can renew and regenerate on their own, making them renewable. However, keep in mind that things like coal and mineral oil are also part of this group, but sadly, they’re not renewable.
Abiotic Resources: Now, abiotic resources are a bit different. We’re talking about non-living elements, such as land, water, air, and minerals like iron, copper, gold, and silver. The catch here is that these resources aren’t as lucky as the biotic ones. They’re not renewable because they can’t regenerate or reproduce, which makes them kind of exhaustible. So, we need to be mindful of how we use them!
Considering their stage of development, natural resources may be referred to in the following ways:
Potential resources: Potential resources are those that may be used in the future—for example, petroleum in sedimentary rocks that, until drilled out and put to use remains a potential resource.
Actual resources: Those resources that have been surveyed, quantified and qualified, and are currently used in development, such as wood processing, and are typically dependent on technology.
Reserve resources: The part of an actual resource that can be developed profitably in the future.
Stock resources: Those that have been surveyed, but cannot be used due to lack of technology; for example, hydrogen.
On the basis of recovery rate, natural resources can be categorized as follows:
Renewable Resources: Resources like sunlight, air, wind, and water are always around for us to use.These resources are continuously replenished by nature. As long as we don’t use them faster than they can recover, they’re considered renewable. Even though some renewable resources may take time to recover, their replenishment rate is faster than non-renewable resources.
Non-Renewable Resources: Non-renewable resources, like minerals, either take a long time to form or don’t naturally occur in the environment. These resources are finite, and if we use them faster than they form, they become depleted. Fossil fuels, like coal and petroleum, fall into this category. They take millions of years to form, making them non-renewable. Certain resources, like radioactive elements such as uranium, naturally decrease over time. While metallic minerals can be recycled, coal and petroleum cannot, taking millions of years to replenish once fully used.
Natural resources are also categorized based on distribution:
- Ubiquitous resources are found everywhere (for example air, light, and water).
- Localized resources are found only in certain parts of the world (for example metal ores and geothermal power).
Man-made resources are crafted by humans utilizing natural materials to fulfill various needs, such as producing paper, clothing, books, plates, or wallpaper. High-tech gadgets often incorporate components that are human-made resources, including wires, televisions, computers, mobile phones, and other electronic devices. These creations enhance the comfort and convenience in our daily lives.
Human resources encompass the individuals who constitute the workforce within an organization, business sector, industry, or economy. Humans are regarded as valuable resources due to their capacity to transform raw natural resources into valuable assets. This transformation is facilitated through a combination of skills, knowledge, and technology. Human skills, technical expertise, and dedicated effort convert inert materials into commodities or services that fulfill both the material and spiritual needs of society.
The term “human capital” is often used interchangeably with “human resources,” although human capital typically refers to a more specific perspective, focusing on the knowledge individuals possess and its contribution to economic growth. Other terms such as “manpower,” “talent,” “labour,” “personnel,” or simply “people” are also employed to describe this workforce. Human capital, as a concept, builds upon the idea of human beings’ ability to effectively utilize available resources in a sustainable manner. Within this framework, skills, education, health, and more are identified as forms of capital. Human capital formation can be categorized into tangible and intangible components, with intangibles encompassing the energy invested in work, personal integrity, truthfulness, knowledge, and similar qualities.
Financial Resource: Launching a business involves various essential elements, with securing funding topping the list. Even for a simple home-based venture, there are numerous initial expenses such as registering a business name, setting up a dedicated telephone line, and printing business cards. Financial capital, the lifeblood of entrepreneurs and businesses, encompasses the economic resources measured in monetary terms. This capital is crucial for acquiring the necessary materials to produce goods or deliver services within a specific sector, be it retail, corporate, investment, banking, and more. The avenues for financial capital can be categorized into:
- Debt Instruments: This involves acquiring borrowed funds, which must be repaid at a later date, typically with interest. Examples include bank loans, personal loans, overdraft agreements, and credit card debt.
- Equity Instruments: Equity capital is generated through the sale of stocks, whether common or preferred shares. Although these funds do not require repayment, investors anticipate a certain rate of return.
- Grants/Subsidies: Government or foreign aid agencies provide this capital, offering support for business initiatives.
Intangible resources work behind the scenes, unseen and unfelt, yet they play a crucial role in giving a business a solid foundation. These intangible assets may not be something you can touch or visually perceive, but they are instrumental in helping a company maintain a competitive edge. They serve as the invisible force that allows a business not only to survive but thrive, consistently generating profits that surpass the standard rates earned by similar businesses. In essence, these intangible possessions humanize the business experience, breathing life into the behind-the-scenes elements that contribute to its success.
This category generally comprises of:
- Goodwill: Think of goodwill as the extra value your business has beyond its physical assets. It’s what makes someone willing to pay more for it than just the sum of its parts.
- Reputation: For new entrepreneurs, reputation might not be something they’ve built up yet. However, if they’re teaming up with others or forming partnerships, they can benefit from the positive image their associates bring to the table.
- Brands: Brands are like a product’s unique identity. It’s the name and image that sets it apart from the others on the market.
- Intellectual Property: This refers to the special rights your business might have, like patents and trademarks. They’re crucial because they protect your innovative ideas and give your business a competitive edge.
Emotional Support: Embarking on a business venture can be an incredibly demanding journey for entrepreneurs. To preserve mental well-being and sustain motivation, it’s crucial to cultivate a supportive network. This team may include close friends, family members, and a mentor or professional group, offering inspiration and guidance when needed.
Moral Support: Moral resources encompass solidarity, legitimacy, and sympathetic support. These forms of support are valuable but can be more challenging to access than other resources, as they can be easily withdrawn.
Cultural Knowledge: Cultural knowledge is now an essential and widespread requirement. Examples include knowing how to organize a protest event, conduct a news conference, run a meeting, establish an organization, initiate a festival, or navigate the digital landscape.
Relational Assets: Relational resources encompass customer relationships, supplier connections, trademarks, and trade names. These elements derive value primarily from the relationships a business maintains. Often referred to as goodwill, the value of these relationships is crucial to an organization’s overall worth, even though it may be inadequately accounted for due to accounting rules.
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