ABSTRACT
This chapter discusses the foundations of economic growth and development, identifying key mechanisms such as specialisation, investment and innovation, which were key ingredients in European industrialisation. It explores the relationships between industrialisation, urbanisation and urban concentration, highlighting some of the problematic assumptions that became embedded in development theories largely informed by European history. The terms 'economic growth' and 'economic development' are often used interchangeably, and they are closely linked. The term 'economic development' is used broadly to denote sustained improvement in living standards for a country's population. Economic growth refers specifically to an increase in the total value of goods and services produced in an economy. Adam Smith provided the first pivotal insight back in the eighteenth century when he noted the economic benefits of specialisation and exchange. Post-war development scholars such as Myrdal and Hirschman also believed that industrialisation and urbanisation would be accompanied by a spatial evolution in the organisation of economic activity within a country.
