Infrastructure is crucial for economic development as it facilitates growth. Adequate infrastructure includes both rigid (e.g. airports, roads, power plants) and soft (e.g. education system, internet) components. A sound transport system is particularly important for economic development, while poor infrastructure can lead to slow economic growth and hinder globalization.
The relationship between infrastructure and economic development lies in the service that infrastructure contributes to economic growth. That is, adequate infrastructure serves as the basis for facilitating rapid economic development. Countries without adequate infrastructure may find that economic development does not occur at the same pace and level as in countries with a solid infrastructure network.
The infrastructure can be rigid or flexible. Examples of rigid infrastructure include parts such as airports, paved roads, shipping ports, canals, well-constructed sewers, and power plants. Examples of soft infrastructure include facets such as a structured criminal justice system, telephone networks, the Internet, and a well-developed education system. It is easy to see the link between infrastructure and economic development just by looking at each of the components of the infrastructure framework.
An example of such a link between infrastructure and economic development can be seen in the importance of a sound transport system to any significant economic development. People need to move around in pursuit of various daily concerns. Parts of these concerns include work-related issues and business opportunities. In countries with good transport systems, it is easy to move raw materials from source to production plants. It is also easy to move finished products from the various production plants to the warehouses.
This ease of transport contrasts with countries with little or no transport structure. In most rural communities in some third world countries, it is difficult to transport harvested agricultural products from farms to consumers in cities and other destinations. This is largely due to the fact that roads and transport systems are often very poor. Most perishable items can be lost before they reach their destinations due to the inordinate amount of time it takes to move them over unpaved roads from farms to consumers. This waste is part of the effect of poor infrastructure, which is reflected in slow economic growth.
In addition to highways, countries that lack other basic infrastructure, such as extensive telephone network coverage and Internet services, may be left behind in the globalization process. For example, if the Internet connection is very sparse and weak, at best, citizens may not have a well-developed information technology (IT) system. This lack would put the country at risk of not taking advantage of the opportunities inherent in IT, which would help to promote the development of its economy.
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