The major factors of production while producing any goods are; land, labor, capital, enterprise and capital goods.Land is one of the basic requirements for production; it includes any kind of space that can be utilized for manufacturing purposes. Labor is the human resource required to manufacture the product. Human resource is one of the key factors of production in economics. More human labor means more profit to the economy.

However, the key factor in labor is ‘human capital’, which defines the quality of human resource. In other words it decides how skilled or qualified the people are. Enterprise is the fourth factor of production in economics, which is responsible for arranging the other factors. An entrepreneur is the person who has capital to invest or resources to use for manufacturing goods. The entrepreneur risks his capital and invests it in arranging for land and labor. Capital goods are man-made resources required in the manufacturing process. Tools, machinery and other such requirements come under this category.

Which factor works as the most important one, is a tricky question. Free market economies believe that the entrepreneur is the most important factor of production. Whereas, the Marxists believe that labor (which also includes the entrepreneur) is the key factor of production. Financial crisis and cash crunches arise when one of the factors of production is scarce.

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