Definition of Scarcity: Characteristics, Causes, Impacts, and How to Overcome It


Definition of Scarcity –  Empon-empon, turmeric, ginger, temulawak, and several similar ingredients, are the basic ingredients for making herbal medicine. Herbal medicine is believed to increase the human body’s resistance, including from the threat of exposure to the corona covid-19 virus. At the beginning of the last pandemic, these materials were hard to find on the market.

At that time, the community flocked to get the material, so that, as the need increased, which was not balanced by the availability of the material, this became the cause of the scarcity of the material in the community. Well, Sinaumedians, this time we will discuss the meaning of scarcity, broadly.

In practice, the phenomenon of scarcity is a serious and important thing for us to understand. Then what is the meaning of rarity, characteristics, and causes? For more details, please see the following explanation.

A. Meaning of Economic Scarcity

In simple terms, the concept of scarcity can be interpreted as limited resources, resulting in insufficient human needs . When we need something, we cannot find what we need, this is also called scarcity. Broadly speaking, economic scarcity can be defined as, one of the most fundamental economic problems we face every day, widely used in business to show the gap between supply and demand.

During this pandemic, there are many shortages in many sectors. This is due to the rapid spread of the covid-19 corona virus throughout the world. People are urged to keep their distance, not to crowd, use a mask, wash their hands after handling something with soap, in running water.

In order to break the chain of spread of the virus, governments around the world issue regulations, so that people can work from home. But in practice, not all activities that can support economic activities can be done from home. So much so that many industrial sectors experience congestion or go out of business. The large number of closed industries causes scarcity in various areas of resources. Surely all of you have experienced something like this, Sinaumedians.

Various financial sectors as well as the Indonesian economy have an impact due to this. The book How Indonesia Handles the Covid-19 Pandemic and Its Impact on the Economy can be read by Reader to understand more about it.

B. Characteristics of scarcity

Sinaumedians, after knowing the meaning of rarity, this phenomenon also has characteristics. What are the characteristics of economic scarcity? Check it out!

  1. Resources can rarely be obtained, they can also be insufficient, in other words, the means of satisfaction in the form of goods and services are limited.
  2. High human desires or needs, it can be said, human needs, are not limited.
  3. The number of tools that meet human needs is very limited, because they are no longer produced, thus making them difficult to obtain.
  4. The demand price has skyrocketed compared to the normal price, because the quantity is limited, while the demand from consumers is high.
  5. Consumers have to make sacrifices in order to get satisfaction tools in the form of goods or services, even to the point of sacrificing the needs of many people to meet more important needs.

We can also see this in the example of the current pandemic, where there are so many challenges faced by the Indonesian nation that it is difficult to meet the needs of many people and this is discussed in the book Navigating the Pandemic Storm.

C. Types of Rarity

We have discussed a lot about the meaning of scarcity, but this scarcity can happen to anything, right? This time we will discuss the types of rarity itself.

1. Scarcity of Human Resources

From this condition, a person is expected to be able to improve their quality both in terms of thinking ability, as well as becoming a skilled human being. This can be done by improving the quality of education, digging into knowledge sources, following technological developments, in order to become skilled and qualified individuals, even able to compete with foreign workforce.

In the book Indonesia Towards 2045 SDM Superior And Technology Is Key also discussed how to become a developed country we need to learn various solutions, breakthroughs, and leaps that other developed countries have made.

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2. Scarcity of Natural Resources

Living beings cannot escape or be far from nature. Nature provides many benefits for the living creatures around it. Everything available in nature is referred to as natural resources, these natural resources consist of two types, namely biotic resources, in the form of animals and plants, and abiotic resources, in the form of air, water, soil, climate, and mining materials. Before being used, the natural resources must be explored first, so that they can be utilized.

If the resources are used continuously, the supply will surely become thinner, including natural resources. The depletion of the availability of natural resources is what is referred to as scarcity, especially non-renewable natural resources, such as mining.

In order to prevent this, the Natural Resource Law appeared in Indonesia which was used to regulate the authority of local governments in the management of existing natural resources, and this was discussed in the Indonesian Natural Resource Law book.

3. Scarcity of Entrepreneurship Resources (Entrepreneurship)

the word entrepreneurship itself comes from the French word, which is entreprende which has the meaning of adventurer, creator, and business manager, then entrepreneurship in general, can be interpreted as an effort to determine, develop, then combine innovation, opportunity, and a better way to have more value in life.

So, entrepreneurship resources itself is an effort that involves other resources such as natural resources, capital and technology, so that it can create wealth and prosperity through the creation of jobs, production and products that society needs.

A creative and innovative entrepreneur can take advantage of available resources, to create quality results, so as to obtain maximum profit. This is one of the keys to entrepreneurial success found in 8 Keys to True Entrepreneurial Success: Tips and Motivation to Become a Successful Entrepreneur by Rudi Rakian.

4. Scarcity of Capital Resources

To support a production, resources in the form of capital are needed. Capital resources are the main foundation for producing goods or services, which are products that have beneficial value to meet human needs. Capital resources can be in the form of fresh funds, physical capital.

Namely in the form of raw materials, equipment, buildings, machines, skills, even will, and spirit can also be referred to as capital resources. A strong desire, to be the foundation of building capital. A strong desire accompanied by effort and hard work will give rise to a unique opportunity to run a production.

D. Causes of scarcity

Sinaumedians, scarcity does not happen immediately. There are other things that can cause scarcity. About what is the cause? Let’s take a look!

1. Population Growth

Population growth is something that needs attention. Rapid population growth, without accompanying the production process of an adequate means of satisfying needs, will cause the process of fulfilling human needs to be hindered. The high population growth rate will result in living needs that must be met, getting out of control.

2. Production Ability

The ability of production is determined by production factors in the form of labor, capital, natural resources, and entrepreneurship. The supporting factors are limited in number, so they will automatically have an impact on whether or not scarcity occurs.

3. Geographical Location Differences

The natural conditions in each hemisphere are not the same, each region has its own characteristics. From this characteristic will give birth to a diversity of resources, according to the potential of each region. The distribution of geographical conditions is the cause of the scarcity of resources.

4. Natural Disasters

Natural disasters, such as floods, earthquakes, landslides, erupting mountains, and other natural disasters are one of the factors that cause scarcity that cannot be predicted by humans. Natural disasters always leave damaged buildings, infrastructure, and other natural resources, even causing casualties.

5. Pandemic

The pandemic that occurred for one year in this hemisphere is the cause of scarcity that cannot be predicted anyway. Large-scale social restrictions resulted in the cessation of the production process of goods, the use of services was also limited, human resources were also very limited, because many people died as a result of this pandemic. So conceivably, the pandemic caused massive shortages in many sectors of the economy.

E. Scarcity impact

1. Price increase

If the demand is greater than the availability of resources, then the price will soar. This should happen, because whoever is quick, he gets it, and whoever dares to pay more, he also gets it. For example, before the pandemic came, medical masks on the market only cost 30 thousand silver per box containing 100 sheets of masks, during the pandemic, people are required to wear masks when going out, because everyone needs a mask, so the price of masks has soared up to 10 times folded, even disappeared from circulation.

2. Unemployment increases

The scarcity of tools to satisfy needs, causing the rotation of the economic wheel to not run smoothly, so that many things cannot be fulfilled, including the availability of funding sources to employ the workforce. How to employ a workforce, if the financial resources are not there. With this kind of scarcity, productive human resources have no jobs.

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3. Criminality increases

To satisfy needs, one must have a balanced exchange tool. To acquire a convertible, an effort and sacrifice is required. The efforts made, if not comparable to the availability of employment, then these efforts will not produce exchange value. When someone can’t satisfy their needs because they don’t have an exchange rate, they will do everything they can to satisfy their needs. In this condition, it has an impact on the potential for criminality to occur.

4. Poverty figures are increasing

The lack of resources capable of providing purchasing power, has an impact on the inability to meet needs. Not being able to buy basic necessities can be indicated as the appearance of poverty. The poverty figure that appears as a result of scarcity, has an impact on the difficulty of a developing country’s progress.

F. How to Overcome Scarcity

The limitation of resources, encourages people to make efforts to meet all their needs. These efforts will be accompanied by sacrifices in the form of unlimited financial resources, energy, and thoughts, this is done in order to meet the needs of life.

In order for these efforts to be maximally successful, strategic plans and methods are needed to avoid, or overcome scarcity. To be more clear, let’s look together, some ways to overcome scarcity.

1. Arrange the priority scale

To meet the needs of life, humans need to make plans. This plan is arranged based on priority from the important to the unimportant. The preparation of this planning scale is one way to overcome scarcity, because it uses a means of satisfying needs based on the urgency of whether or not this means of satisfaction must be met.

2. Save the use of natural resources.

Even though these natural products are abundant, if their use is not limited, they will gradually deplete and then run out. Humans are expected to be wise in utilizing these natural resources, not over-exploiting them. We need to remember that the earth and all the natural resources in it are not inherited from our ancestors, but are loans from our children, grandchildren and great-grandchildren.

3. Maintain the sustainability of nature

Every day, thousands of trees are cut down, to meet the needs of paper production. Not only that, hardwoods are also cut down a lot, then exported as raw materials, large-scale logging will make the living habitat of these trees bare and arid, the impact that occurs from this condition is, natural disasters such as floods, landslides, and lack of water content in the soil. So human awareness is needed to preserve this wealth of natural resources by replanting or rejuvenating forests.

4. Make use of substitute resources

There are two types of natural resources on earth, namely renewable natural resources and non-renewable natural resources. Natural resources are non-renewable, their supply is limited, while human needs are unlimited, so alternative resources are needed to replace these resources. For example, oil comes from the weathering of ancient animal fossils that were buried millions of years ago.

After years of being used, the supply will be depleted. In order to meet the people’s need for the availability of petroleum as an energy source, alternative energy sources such as biogas, biodiesel, and others are made as a substitute for petroleum. As another example, the soaring price of masks and the scarcity of masks on the market has made many people creative in making their own masks that can be used and washed repeatedly.

5. Improving the quality of human resources

The scarcity of quality human resources causes minimal absorption of productive human resources. This has an impact on increasing the unemployment rate. To respond to this condition, it is necessary to organize workforce training, so that a person’s abilities can be maximized, so as to improve self-quality.

6. Manage capital resources appropriately

Managing capital resources, related to one’s ability to set priorities in fulfilling needs. When the management of capital resources goes hand in hand with setting priorities, then this really helps someone manage their expenses properly and correctly. For an entrepreneur, this can streamline operational costs, the hope is that with minimal capital, they can get maximum profits. This is what is called managing capital resources effectively.

So, Sinaumedians, a little review about the definition of scarcity. Look around you, during this pandemic, we must be wiser in responding to the economic phenomena that are emerging around us. We are invited to be more creative and innovative in responding to this condition. After knowing the meaning of scarcity, Reader can start to see yourself, what potential do you have as individuals, what personal resources can be generated, so that they are useful for others.


The importance of concern for looking around, which is a supporting factor for the availability of tools to meet human needs. If this can be done, it is hoped that scarcity will not occur, at least if it does, it should not have a negative impact on the wheels of the economy.