infrastructure

Learning objectives

By the end of this lesson, you should be able to:

• Define infrastructure.
• Differentiate between infrastructure and capital structure.
• Describe types of infrastructure.
• Describe the relationship between economic and social infrastructure.
• Describe the importance of infrastructure.

Infrastructure refers to a set of facilities or systems that serve an area, a city, or a country, and includes facilities and services necessary for households and the economy to function. Infrastructure is made up of both private and public physical structures like railways, roads, tunnels, bridges, telecommunications, and electrical grids.

Infrastructure can be classified into hard and soft infrastructure.

• Hard infrastructure involves physical networks important for the proper functioning of modern industry. This includes railways, roads, and bridges.
• Soft infrastructure involves institutions important for maintaining the social, health, environmental, cultural, and economic standards of a country. This includes recreational facilities, emergency services, education programs, and law enforcement agencies.

Infrastructure can also be classified as:

• Economic infrastructure. This refers to every element of economic change, like transportation, electricity, and communications, as a system of support for the process of economic growth. Promoting the growth of the economy, automatically improves the living standards of people.

• Social infrastructure. This refers to the elements that promote social change like banks, schools, hospitals, and colleges. They offer a support system for the process of social development in a country. This type of infrastructure focuses on the development of different human resources. This can include the development of healthy, trained, and efficient people.
• Personal. Personal infrastructure is aimed at determining the quality of values of economic agents. This includes teachers and skilled and unskilled labor. Personal infrastructure defines the impact of humans on social well-being and economic growth.

The difference between economic and social infrastructure

• Economic infrastructure helps the economic system directly while social infrastructure helps the economic system indirectly.
• Economic infrastructure aims at improving the quality of economic resources while social infrastructure aims at improving the quality of human resources.
• Examples of economic infrastructure include energy and transport while examples of social infrastructure include education and health.

Relationship between economic and social infrastructure

Economic infrastructure provides us with energy sources, better means of communication and transport, and efficient finance and banking. All these facilities or services serve as a foundation or a supporting system for the economic growth process. Production of goods and services and their trade are important for the process of economic growth. However, all these cannot be utilized if a majority of the population in a country is ill or illiterate due to a lack of essential services like hospitals and schools. Therefore, economic growth is not complete without the formation of human capital. Economic infrastructure without social infrastructure is meaningless. Social infrastructure and economic infrastructure are complementary to each other.

The distinction between infrastructure and capital structure

The capital structure is made up of farms, tractors, machines, and other types of equipment required for the production of goods and services. Infrastructure on the other hand involves all supporting services and facilities process of production. For example, the transportation of goods falls under infrastructure while farm machinery falls under the capital structure.

Importance of infrastructure

Agricultural development. Infrastructure facilitates the development of agriculture in the ways discussed below:

• Agriculture output is dependent on the development and expansion of irrigation facilities.
• Modern agriculture is dependent on the speedy transport of farm inputs such as fertilizers and seeds.
• Modern transport facilities promote agriculture marketing.
• The sector of agriculture is dependent on banking and finance facilities for credit requirements.

Therefore, the growth and development of agriculture are dependent on infrastructural development.

Industrial development. Industrial development is also dependent on the development of infrastructure.

• The transport of raw materials is dependent on transport facilities.
• Transport facilities promote the marketing of goods in far-off places.
• Education and health facilities provide an educated and healthy labor force.

Therefore, infrastructure development promotes industrial development.

Promotion of economic development and productivity. The economic growth or development of a country is dependent on the development of different sectors namely the primary, secondary, and tertiary sectors.

• Economic infrastructure such as communication, transportation, and energy, enhance the quality of economic resources and the efficiency of physical capital. This raises productivity and lowers the cost of production.
• Social infrastructure such as housing, sanitation, health, and education promotes the quality of human resources and improves productivity as well as the efficiency of human capital.

Better quality of life. Well-developed infrastructure facilities such as education, transportation, and health lead to a better standard of life.

• Health and education facilities produce healthy, literate, and skilled populations.
• Better water supply and sanitation facilities greatly reduce morbidity (proneness to fall ill).
• Transport and communication facilities promote access to better education and healthcare.

Provision of employment. The development of infrastructure helps to generate employment opportunities in the following ways:

• People get employed in different infrastructure projects like the maintenance and construction of roads, railways, and electricity.
• The development of infrastructure promotes the development of other sectors like agriculture which generate employment opportunities.

Expansion of the size of the market. The development of infrastructure is responsible for both, the expansion of market, and the creation of the market.

• Strong communication systems help bring together sellers and buyers from far-off places.

Summary

We've learned that;

• Infrastructure is a set of facilities or systems that serve an area, a city, or a country.
• Infrastructure is classified into hard and soft infrastructure.
• Hard infrastructure involves physical networks important for the proper functioning of the modern industry such as railways, roads, and bridges.
• Soft infrastructure involves institutions important for maintaining the social, health, environmental, cultural, and economic standards of a country such as recreational facilities, emergency services, education programs, and law enforcement agencies.