The Infrastructure Is Important to the Economic Development of an Economy.

Topics: Economy, Economics, Economic growth Pages: 2 (351 words) Published: February 27, 2008
Infrastructure represents those types of capital goods that serve the activities of many industries included paved roads, railroads, seaports, communication networks, financial systems, and energy supplies – that all support production and marketing for industries within the country. Beside that, the quality of an Infrastructure directly affects a country's economic growth potential and the ability of an enterprise to engage effectively.

Infrastructure is important for the services it provides. Infrastructure provides services that support economic growth by increasing the productivity of labors and capital thereby reducing the costs of production and raising profitability, production, income and employment. Infrastructure investment and consumption of infrastructure services have significant implications for achievement of sustainable development objectives, as infrastructure services: •Encourage new investment across the economy;

•Underpin many aspects of economic and social activity;
•Facilitate the flow of ideas, goods and services;
•Facilitate regional economic growth;
•Are critical to maintain an inclusive, healthy and productive workforce; •Involve large scale investment with significant environmental impacts; and •Generate a range of externalities in their production and consumption. Infrastructure investment can increase productivity by:

•Promoting efficient resource allocation through easier access for labors and materials to particular localities, and allowing alternative activities, employment opportunities and investment to emerge; and •Providing the necessary economies of scale for urban agglomeration. Due to the relationship between economic infrastructure and economic growth appears to run in both directions and the need for investment in economic infrastructure never goes away. The maintenance and expansion of infrastructure are important dimensions of supporting economic activity in a growing economy, provided that individual...
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