Firstly,
this term doesn't purely apply to just natural resources such as wood
and coal in economics. There are four different resources that are at
the disposal of an economy or government. However these resources are
of course limited despite an infinite number of wants. So just what
are these resources. So what are they?
Capital factors of production regard man made objects that help to increase production. A capital good such as a machine in a factory or a computer in an office help to increase output of the firm that possesses them and so in the long term can produce more consumer goods to sell. Hence the term "capital investment" means that a firm is investing its cash in factors that will boost output of consumer goods and make more profit in the long term.
Finally Entrepreneurship combines the previous three factors. An Entrepreneur is a person who takes on the risk of starting an enterprise and if the enterprise is a failure then it is their cash, their time and their resources which are lost. For more information read my article on Entrepreneurs. An Entrepreneur will make all of the decisions as to how all of the resources are deployed and what raw materials, type of worker and equipment is needed to produce their good or service. An economy needs this caliber of people in order to ensure that enough goods are produced to meet the demands of the people living in the economic region that they're in and also they are taxed on profits and incomes which ensures that the government has enough capital in order to fund its spending projects. This sends the economy into an upward spiral.
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