Infrastructure: The Support System of the Economy

No sector of the economy — agriculture, industry or services — can function efficiently without a supporting network of basic facilities. This supporting network is called infrastructure, and it is often described as the "support system" of an economy because, much like a building's foundation, it does not itself produce final goods and services but makes it possible for every other productive activity to operate efficiently.

Infrastructure is usually divided into two broad categories:

Economic infrastructure. This covers facilities that directly support production and distribution activities: power (electricity generation and supply), transport (roads, railways, ports, airports) and communication (telecommunications, postal services, the internet). A farmer needs roads to move produce to market and electricity to run irrigation pumps; a factory needs reliable power and transport to receive raw materials and dispatch finished goods; a services firm needs communication networks to function at all. Weak economic infrastructure raises costs, causes delays and wastage, and limits how much an economy can produce and trade.

Social infrastructure. This covers facilities that build up the quality of human resources: education (schools, colleges, vocational training) and health (hospitals, clinics, public health systems), along with related facilities like housing and sanitation. Social infrastructure does not move goods, but it builds the skills, health and productivity of the people who work in every sector — an economy cannot sustain high productivity in agriculture, industry or services if its workforce is poorly educated or in poor health. …