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What Is an Economic Infrastructure?

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  • Written By: Andrew Kirmayer
  • Edited By: Shereen Skola
  • Images By: Andy, Harvey Barrison
  • Last Modified Date: 21 November 2016
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Economic infrastructure generally includes the systems that enable business to take place in a country. This often refers to functional communications networks as well as road, rail, and air transportation. The purification of water and its delivery are often considered to be essential for business and the economy. Structures such as dams and canals can be placed in this category, as well as irrigation systems for agriculture. Power production and management, in addition to services such as education, science, and health care within the geographical boundaries of a country, are usually thought of as essential economic infrastructure components.

Infrastructure improvements, as a country’s economic status changes, are often measured according to each household, the size of the labor force, and per unit of land area. These measurements are typically used for monitoring water and power usage. Physical infrastructure is generally important because sound water, power, sanitation, and communication systems are beneficial for business activity. Transportation system integrity can also be gauged this way, and the ability to repair and maintain roads and rails are often factored in as well.

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Government has often played an important role in economic infrastructure. In the United States of America, for example, industrial needs versus the economy were addressed by important historical figures in the 1700s. Infrastructure such as canals, ports, and roadways have often been the subject of debate as technology has advanced, even in Europe going back hundreds of years. Middle Eastern civilizations, such as that of Mesopotamia, typically relied on water management systems; labor costs versus maintaining economic infrastructure have often been addressed in ancient and modern times.

There are different ways of assessing what most benefits economic infrastructure. Analysts often believe that the basic transportation, water, power, and communication systems need to be kept in top condition. If they are not, then economic growth, often measured by the value of a country’s gross domestic product (GDP), can be hindered. The distribution of products, as well as the state of financial institutions, can also contribute to the well-being of economic infrastructure.

Jobs in manufacturing, distribution, and retail, as well as other forms of employment in the private sector are sometimes considered a part of economic infrastructure. Local or regional agencies may offer grants that can fund construction and repair of pipelines, wastewater treatment plants, or roads, for example. Funding is often an issue for maintaining various aspects of economic infrastructure, as is workforce productivity.

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