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: These resources include all living elements of the environment. Forests and forest products, crops, birds, wildlife, fishes and other marine lives are the examples of biotic resources. These resources reproduce and regenerate themselves, hence, are renewable. Coal and mineral oil are also biotic resources but they are non-renewable.
- Abiotic resources: These resources include all non-living elements of the environment. Land, water, air and minerals e.g., iron, copper, gold, silver etc. are abiotic resources. They are exhaustible and non-renewable as they cannot be regenerated or reproduced.
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: Renewable resources can be replenished naturally. Some of these resources, like sunlight, air, wind, water, etc. are continuously available and their quantities are not noticeably affected by human consumption. Though many renewable resources do not have such a rapid recovery rate, these resources are susceptible to depletion by over-use. Resources from a human use perspective are classified as renewable so long as the rate of replenishment/recovery exceeds that of the rate of consumption. They replenish easily compared to non-renewable resources.
- Non-renewable resources: Non-renewable resources either form slowly or do not naturally form in the environment. Minerals are the most common resource included in this category. From the human perspective, resources are non-renewable when their rate of consumption exceeds the rate of replenishment/recovery; a good example of this are fossil fuels, which are in this category because their rate of formation is extremely slow (potentially millions of years), meaning they are considered non-renewable. Some resources naturally deplete in amount without human interference, the most notable of these being radio-active elements such as uranium, which naturally decay into heavy metals. Of these, the metallic minerals can be re-used by recycling them, but coal and petroleum cannot be recycled. Once they are completely used they take millions of years to replenish.
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 the resources made by mankind by using natural resources for their needs like paper, clothes, books, plates or wallpaper. High-tech products typically feature components that are man-made resources, such as wires, television, computer and mobile phones other electronic products. They provide comfort and smoothness to our lives.
Human resources is the set of people who make up the workforce of an organization, business sector, industry, or economy. Humans are considered to be resources because of its ability to transform original resources of nature into a valuable resource.
This is done with the help of skills, knowledge and technology. Human skills, technical know-how and hard work converts the neutral stuff into a commodity or service to serve material and spiritual needs of the human society
“Human capital” is interchangeably used with the term “human resources”, although human capital characteristically refers to a narrower view (i.e., the knowledge the individuals embody and economic growth).
Similarly, other terms sometimes used include “manpower”, “talent”, “labour”, “personnel”, or simply “people”. Human capital is a similar concept built upon the idea of human ability to appropriate available resources in a sustainable manner. Here skills, education, health, etc., are identified as capital in itself. Human capital formation can be subdivided into tangible and intangible. Intangible can be simply referred as the energy a human being invests in the work, his integrity, truthfulness, knowledge, etc.
Financial Resource: The most important element in starting a business is funding. Even the most basic home business incurs a multitude of start-up costs, including registering a business name, obtaining a business telephone line and printing business cards. Financial capital is any economic resource measured in terms of money used by entrepreneurs and businesses to buy what they need to make their products or to provide their services to the sector of the economy upon which their operation is based, i.e. retail, corporate, investment, banking etc. This can be classified into:
- Debt Instruments: Debt capital refers to borrowed funds that must be repaid at a later date, usually with interest. Examples are bank loans, personal loans, overdraft agreements and credit card debt.
- Equity Instruments: Equity capital refers to funds generated by the sale of stock, either common or preferred shares. While these funds need not be repaid, investors expect a certain rate of return.
- Grants/Subsidies: These are the capital provided by government or foreign aid agencies.
Intangible resources are neither felt nor seen, far from being touched or preserved but helps immensely in providing a strong foothold to enterprise.
The intangible possession is a resource which enables a business to continue to earn a profit that is in excess of the normal basic rate of profit earned by other business of similar type.
This category generally comprises of:
- Goodwill: The difference between the value of the tangible assets of the business and the actual value of the business (what someone would be prepared to pay for it).
- Reputation: Though it is generally not present in case of new entrepreneurs. But if he is acquiring or entering into a partnership or some alliance, he may benefit from the goodwill of his associate, if any.
- Brands: It is a name given to a product in order to be recognized and differentiated from other similar products.
- Intellectual Property: Key commercial rights protected by patents and trademarks may be an important factor to be worked out by the entrepreneur.
Emotional Resources: Starting a business can be an extremely stressful endeavour for an entrepreneur to undertake. To maintain the sanity as well as stay motivated, it is important to have a support team that can give inspirations and guidance as needed. This team may be composed of friends and family as well as a mentor or professional group.
Moral Resources: Moral Resources include solidarity support, legitimacy and sympathetic support. These resources can be easily retracted, making them less accessible than other resources.
Cultural Knowledge Resource: Cultural Knowledge resource has become widely necessary and universal. Known Examples include how to accomplish specific tasks like enacting a protest event, holding a news conference, running a meeting, forming an organization, initiating a festival, or surfing the web.
Relational Resource: It consists of such elements as customer relationships, supplier relationships, trademarks and trade names, which have value only by virtue of customer relationships, licenses, and franchises. In fact relational resource is separate from human and structural resource and therefore, it indicates its immense importance to an organization’s worth. The value of the relationships a business maintains with its customers and suppliers is also referred as goodwill, but often poorly booked in corporate accounts, because of accounting rules.