--- title: What Does Interdependence Mean? | Example, Conclusion description: Interdependence can be defined as the relationship between two or more parties that depend on each other for survival. Click to know more. --- [![Carbon collective](https://www.carboncollectiveinvesting.com/hubfs/raw_assets/public/CarbonCollective_August2021%20copy/images/carbon-collective-green-investing-logo-white.4f6047d4.svg "Carbon collective")](https://www.carboncollectiveinvesting.com/) - About - Employers - [Sustainable 401(k)](https://www.carboncollectiveinvesting.com/401k) - [401(k) Comparison Tool](https://www.carboncollectiveinvesting.com/401k/plan-comparison-tool) - Individuals - [FAQ](https://www.carboncollective.co/en/knowledge/faqs) - [ETF](https://www.carboncollectivefunds.com/) - Learn - [Sustainable Investing](https://www.carboncollective.co/sustainable-investing) - [Investing Basics](https://www.carboncollective.co/sustainable-investing/investing-basics) - [Blog](https://blog.carboncollective.co/) - [Tools](https://tools.carboncollective.co/calculator/) - Log in - [Carbon Collective](https://app.carboncollective.co) - [Altruist](https://app.altruist.com) [Talk to a human](https://ask.carboncollective.co/f4o5dylkg) [Sign up](https://app.carboncollective.co/sign-up) [Log In](http://app.carboncollective.co/) [![Carbon collective](https://www.carboncollectiveinvesting.com/hubfs/raw_assets/public/CarbonCollective_August2021%20copy/images/carbon-collective-green-investing-logo.53b28bee.svg "Carbon collective")](https://www.carboncollectiveinvesting.com/) - About - Employers - [Sustainable 401(k)](https://www.carboncollectiveinvesting.com/401k) - [401(k) Comparison Tool](https://www.carboncollectiveinvesting.com/401k/plan-comparison-tool) - Individuals - [FAQ](https://www.carboncollective.co/en/knowledge/faqs) - [ETF](https://www.carboncollectivefunds.com/) - Learn - [Sustainable Investing](https://www.carboncollective.co/sustainable-investing) - [Investing Basics](https://www.carboncollective.co/sustainable-investing/investing-basics) - [Blog](https://blog.carboncollective.co/) - [Tools](https://tools.carboncollective.co/calculator/) - Log in - [Carbon Collective](https://app.carboncollective.co) - [Altruist](https://app.altruist.com) [Talk to a human](https://ask.carboncollective.co/f4o5dylkg) [Sign up](https://app.carboncollective.co/sign-up) [Log In](http://app.carboncollective.co/) **[Home](https://www.carboncollectiveinvesting.com/) > [Sustainable Investing](https://www.carboncollectiveinvesting.com/sustainable-investing) >** What is Interdependence? # What is Interdependence? ![](https://www.carboncollectiveinvesting.com/hubfs/Brooke%20Tomasetti.png) Written by Brooke Tomasetti | Reviewed by [Subject Matter Experts](https://www.carboncollectiveinvesting.com/subject-matter-experts) Updated on October 1, 2024 Fact Checked Why Trust Carbon Collective? ### Table of Contents Interdependence can be defined as the relationship between two or more parties that depend on each other for survival. Every part needs to contribute something to the other party to survive. The connection can be between people, regions, nations, or businesses. [Economic](https://www.carboncollectiveinvesting.com/sustainable-investing/primary-economic-activity/) interdependence occurs when a party specialize in the fulfilment of a good or service and the parties need to trade with each other to meet the other’s requirements. ## What Does Interdependence Mean? In interdependence, there are more than one party involved, the one-party will have resources that the other party need to fulfil its requirement and the transfer works both ways. Both parties need to meet their need, and both can assist each other in fulfilling the need. The relationship of dependence can be found almost everywhere because we need other people to survive. Looking at the four relationships mentioned: - **People** – People depend on other people to acquire the relevant resources to survive, this could be as basic as a farmer selling his potatoes to a client. - **Regions** – Different regions in a country depend on each other for resources. For example, one area can have fields that can be planted and harvested for food, and the other region would buy the food from the first region. - **Nations** – Different nations depend on each other for resources that are not available in that nation. China could manufacture computer parts that are needed in America to build a computer. - **Businesses** – Businesses need each other to make money and to get resources. A company could depend on another business to supply them with the raw materials to produce their product. These are just some of the interdependent relationships that can be found, you can look at people to a [business](https://www.carboncollectiveinvesting.com/sustainable-investing/business-owner/), region to business, nation to companies, and so much more. Interdependence can be found all over society. The nature of the relationship will determine the degree of interdependence. If the dependence is high and the one-party disappear, the other party will likely disappear as well. Client and supplier relationships are a form of reliance. A client is dependent on the supplier to supply raw materials, and the supplier is dependent on the client to pay for these raw materials. The client will use the raw material to manufacture their product. The supplier will make use of the money to buy more raw materials. Businesses can have interdependence with financial institutions where a business needs to loan money from the financial institutions to leverage itself to grow the business. Where the financial institution needs to lend money to be financially profitable. ## Interdependence Example Jimmy bought an Uber franchise and has two cars that he operates in New York. Jimmy has two drivers that drive the Uber cars for him. From the perspective of interdependence, we can identify two essential relationships between Jimmy’s business and the other parties. Firstly, Jimmy has an interdependent relationship with his two drivers. Jimmy needs the drivers to drive the cars and pick up his clients and drop them off at the correct location. The drivers are dependent on Jimmy to pay them for the work that they are doing for him. Secondly, Jimmy has an interdependence with his clients, he needs to make sure the clients are picked up and dropped off at the correct location at the right time. In doing this, the client will pay, and Jimmy will be able to maintain his cars to keep offering the [service](https://www.carboncollectiveinvesting.com/sustainable-investing/what-is-a-service-company/).  The clients are dependent on transport and need to pay money for the service. In both these situations, the client and the business are dependent on keeping each other running, if the clients don’t need the Uber service or don’t want to pay for it then Jimmy’s company will not be able to survive. ## Interdependence Conclusion - Interdependence can be defined as the relationship between two or more parties that depend on each other for survival. - The connection can be between people, regions, nations, or businesses.  - Economic interdependence occurs when a party specialize in the fulfilment of a good or service and the parties need to trade with each other to meet the other’s requirements. - The nature of the relationship will determine the degree of interdependence.  - If the dependence is high and the one-party disappears, the other party will likely disappear as well.  ## FAQs ### 1. What does Interdependence mean? Interdependence is the relationship between two or more parties that depend on each other for survival. This connection can be between people, regions, nations, or businesses. ### 2. What is the definition of economic interdependence? Economic interdependence is when a party specialize in the fulfilment of a good or service and the parties need to trade with each other to meet the other’s requirements. In other words, it is a situation where two or more parties need to cooperate in order to satisfy the needs of each other. ### 3. What are some examples of Interdependence? Some examples of interdependence can include: - People dependent on nature for survival (hunting, gathering) - Businesses dependent on suppliers for raw materials - Financial institutions dependent on businesses to loan money - Countries dependent on other countries for trade ### 4. What is the importance of Interdependence? Interdependence is important because it allows for the specialization of goods and services. This leads to improved efficiency and a more prosperous economy. In addition, it also promotes cooperation and peace between nations. For example, economic interdependence can encourage two countries that are in conflict to reach a trade agreement. ### 5. What is the difference between interdependence and dependence? Dependence is when a party is reliant on another party for survival. In contrast, interdependence is when two or more parties are reliant on each other for survival. For example, if a business is dependent on a supplier for raw materials, it would be considered interdependence. However, if the business was only dependent on the supplier for the raw materials, it would be considered dependence. ### Related Topics - [Sustainable 401(k) Plan](https://www.carboncollective.co/401k) - [Sustainable Investing](https://www.carboncollective.co/sustainable-investing/) - [Investing Basics](https://www.carboncollective.co/sustainable-investing/investing-basics) - [Retirement Glossary](https://www.carboncollective.co/sustainable-investing/retirement-planning-glossary) - [Best Retirement Plans](https://www.carboncollective.co/sustainable-investing/the-10-best-retirement-plans) - [Wealth Manager Vs Financial Advisor](https://www.carboncollective.co/sustainable-investing/wealth-manager-vs.-financial-advisor) ![Attend Our Next Webinar](https://www.carboncollectiveinvesting.com/hubfs/carbon-collective-green-investing-icon-webinar.12af7b6e.svg) ### Attend Our Next Webinar Join our next Sustainable Investing 101 webinar, get our favorite DIY options, and walk through how we build our portfolios. 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