An infrastructure can be defined as the physical and organisational facilities ( e.g buildings, roads, power supplies, etc ) that are needed for the operation of a society or enterprise. In other words, infrastructure is the set of fundamental facilities and systems that support the sustainable functionality of households and firms. Infrastructure is composed of public and private physical structures such as roads, railways, bridges, tunnels, water supply, sewers, electrical grids and telecommunications ( including internet connectivity and broadband acess ). One approach to classify infrastructure is to view them as two distinct kinds – hard infrastructure and soft infrastructure. Hard infrastructure consists of physical systems that are necessary to operate a country such as transportation, telecommunications, energy, water supply and sanitation. Soft infrastructure refers to institutions that maintain the health, economic and social standards of a country such as education, financial, government, emergency and healthcare systems. Businesses are primarily concerned with hard infrastructure because it has a direct impact but soft infrastructure also plays an important part.
HARD INFRASTRUCTURE :
• Transportation – Transportation is one of the most important factors of infrastructure. For a business to develop properly, transportation is the most basic factor. For developing countries, the lack of roads and highways can be a difficult and costly obstacle to overcome. Developed countries, however, have existing road systems and highways. For these countries, it becomes an issue of quality of roads, capacity and limiting of backups and traffic.
• Telecommunications – Telecommunication has significantly changed businesses all over the world. India, for example, where telecommunication has developed considerably, is now recognised for outsourced telemarketing, customer service hotlines and other phone related industries. Telecommunication has also increased the number of digital nomads, people who earn a living utilising technology while travelling or living abroad. Companies can attract high quality people because they are not limited to location. Businesses also reduce their costs because they do not have large overheads for office space.
• Energy – Energy infrastructure refers to not only the production of energy, but also storage and distribution. Energy networks include pipelines, wires, waterways, railroads and other systems that transport energy. Businesses need to be concerned about the infrastructure of energy, as well as energy sources. Developing countries are mostly concerned with the consistency of available energy source. Often the population and demand outgrow the infrastructure, which limits the availability to businesses. They should consider reusable and sustainable forms of energy, such as wind and solar power. Overcapacity can cause power loss or fluctuation and businesses must have back-up generators to be able to operate when the main power supply is not sufficient.
• Water supply and sanitation – Companies are influenced by sanitation, sewer system and water supply. This is very important, particularly in those industries which require fresh water such as farming or bottling plants. They must also consider proper disposal of waste, particularly dangerous waste like chemicals.
THE IMPORTANCE OF INFRASTRUCTURE :
Infrastructure of a country is a very important support system for a business. An efficient transport network enables staff to get to work easily. Not only access to, but also quality of infrastructure affects firm productivity as well as people’s livelihood. Frequent interruption of the infrastructure – service supply impose extra back up costs on enterprises, hinder their timely business activities and result in large losses of sales opportunities.