Economic dynamism is the rate and direction of change in an economy.
This can include activities like the rate of new business formation, the frequency of labor market turnover, and the geographic mobility of the workforce.
Economists disagree on the usefulness of the term, with some calling it too ambiguous, and with others calling it useful to understand the degree of churn in the economy.
Proponents of the term note that it can describe an economy's ability to adapt to changing circumstances, such as changing consumer demands or the availability of resources.
Some experts correlate economic dynamism with the rate of business start-ups.
Rates of consumers changing banking or telecommunications service providers, especially as limited by
switching barriers Switching costs or switching barriers are terms used in microeconomics, strategic management, and marketing. They may be defined as the disadvantages or expenses consumers feel they experience, along with the economic and psychological costs of swit ...
, have been cited as a major influence on economic dynamism.
References
Economic concepts
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