Economic infrastructure

Economic infrastructure is a set of basic services that contain the basic principles of economic development of a country, region or city. It is to take into account the flow of information, energy, and matter to shape costs. Economic infrastructure is the following:

• subservient (provides services),
• long-lived (long service life),
• immobilized (devices and instruments cannot be used).

Economic infrastructure has a very large impact on economic potential. It provides him with resources that affect his return. The economic potential consists of occupational activity of the inhabitants and their income, labor market, type of entrepreneurship, inflow of foreign capital, as well as the condition of the natural environment.

Features of economic infrastructure

Economic infrastructure has the following features:

• Services - its offer is to meet the demand for services in all consumption and production zones.
• Transfer - enables the transport of people, goods and energy in space by creating favorable conditions for this.
• Integrative - creates social, information and economic ties in given countries and regions.
• Informative - provides information about the current state of the economy, is a factor in creating economic potential.

Types of economic infrastructure

Economic infrastructure can be divided into individual types:

• Transport infrastructure - to ensure the fast and efficient transport of material goods and the transport of persons and animals. It consists of roads (roads, motorways), rail and inland waterways (seaports and airports) networks. This infrastructure is considered in three aspects: technical, organizational and economic.
• Financial infrastructure - it consists of financial markets and financial services that support economic processes. A special mention should be made of banks that deal with the storage of funds, payments, transfers, raise capital (deposits, bank accounts) and create new money, on which they earn (loans).
• Social infrastructure - these are devices and institutions that meet social and social needs. These include, for example, hospitals, sanatoriums, schools, kindergartens. Social infrastructure is very important in the development of education in a given region. We can distinguish here: health infrastructure (hospitals, etc.), educational infrastructure (schools, etc.) and tourist infrastructure (museums).
• Technical infrastructure - these are devices for the transmission of energy, water, heat, telecommunications, as well as for the discharge of sewage and pollution.
• Security infrastructure - these are systems and institutions that help a given region in the event of unpredictable fortuitous events, such as natural disasters (floods, earthquakes, tsunamis).

Examples of Economic infrastructure

• Transportation: This includes any type of infrastructure that facilitates the movement of goods and people from one place to another. Examples include roads, bridges, railways, airports, ports and waterways.
• Telecommunications: This type of infrastructure is responsible for the transmission of information over a distance. Examples include telephone networks, internet networks and satellite communication systems.
• Energy: This type of infrastructure is necessary for the production and distribution of energy resources, such as electricity, natural gas and oil. Examples include power plants, transmission lines and pipelines.
• Financial: This type of infrastructure is necessary for the efficient flow of capital, such as banks, insurance companies and stock markets.
• Water: This type of infrastructure is necessary for the delivery of clean and safe drinking water to households, businesses and industries. Examples include dams, reservoirs, aqueducts and water treatment facilities.
• Waste Management: This type of infrastructure is necessary for the disposal of waste products, such as garbage and sewage. Examples include landfills, incinerators and wastewater treatment plants.

Advantages of Economic infrastructure

Economic infrastructure has a variety of advantages that make it essential for economic growth and development. These advantages include:

• Improved accessibility: Economic infrastructure enables easier access to goods, services, and people. It reduces travel time, improves the efficiency of transportation networks, and connects different markets.
• Increased efficiency: Economic infrastructure allows businesses to operate more efficiently, as they are able to move goods and services faster and more efficiently. This increases output and reduces costs.
• Reduced cost: Economic infrastructure allows businesses to reduce their costs by reducing their reliance on transportation networks. It also reduces the cost of energy, reducing the cost of production.
• Improved quality of life: Economic infrastructure provides access to essential services such as health care, education, and sanitation. This improves the quality of life for citizens and makes it easier to attract investors.
• Boosts economic growth: Economic infrastructure increases economic growth by providing access to resources, services, and markets. This provides businesses with a competitive edge, which leads to increased profitability.
• Increased employment: Economic infrastructure creates jobs by increasing the demand for labor, which leads to higher wages and improved living standards. This, in turn, leads to increased consumer spending, which further stimulates economic growth.

Limitations of Economic infrastructure

Economic infrastructure has its own limitations, which can impede the economic development of a country, region or city. These limitations include:

• Poor maintenance or development of infrastructure - Poorly maintained or underdeveloped economic infrastructure can lead to a lack of access to important services such as transportation, energy and communication networks, which can limit the economic growth of an area.
• High cost of investment - The cost of investing in economic infrastructure can be very high for both the government and the private sector. This can lead to a lack of resources to build and maintain the infrastructure, thus leading to a slower rate of economic growth.
• Lack of coordination between different infrastructure components - Different infrastructure components such as transportation, energy, and communication networks need to be well-coordinated in order to ensure the efficient functioning of the economic infrastructure. A lack of coordination between these components can lead to inefficient use of resources and a slower rate of economic growth.
• Inadequate planning and management - Poor planning and management of economic infrastructure can lead to inefficient use of resources and a slower rate of economic growth.
• Inadequate access to technology - Access to the latest technology is important for the efficient functioning of the economic infrastructure. A lack of access to the latest technology can lead to a slower rate of economic growth.

Other approaches related to Economic infrastructure

Other approaches related to economic infrastructure include:

• Public-private partnerships (PPP): This approach involves the collaboration between a public sector entity and a private sector entity to finance, build, and/or operate infrastructure projects. This approach can be beneficial to both entities as it helps to leverage the strengths of each partner.
• Infrastructure as a Service (IaaS): This approach enables organizations to use cloud computing technology to access, manage, and use infrastructure on an as-needed basis, which can help to reduce costs and increase flexibility.
• Microtransit: This approach involves the use of small, shared vehicles to provide on-demand transportation services in urban areas.
• Smart Cities: This approach involves the use of technology and data analytics to improve the efficiency and sustainability of urban infrastructure and services.

In summary, other approaches related to economic infrastructure include public-private partnerships, infrastructure as a service, microtransit, and smart cities. These approaches can help to reduce costs, increase flexibility, and improve the efficiency of urban infrastructure and services.

Economic infrastructure — recommended articles

Examples of opportunities — Economic factor — Basic industry — Public task — Capital resource — Activity center — Secondary activities — Quasi public goods — Service economy

References

• Henckel T., McKibbin W.J. (2017), The Economics of Infrastructure in a Globalized World: Issues, Lessons and Future Challenges. Journal of Infrastructure, Policy and Development, Volume 1 Issue 2.
• Treasury H.M. (2013), Planning Economic Infrastructure. National Audit Office.
• Younis F. (2014), Significance of Infrastructure Investment for Economic Growth. Munich Personal RePEc Archive, MPRA Paper No. 72659

Author: Julianna Lekarczyk