Infrastructure investment: from productive capacities to domestic capabilities

Presentation by Christoph Ernst, Senior Economist, Employment Policy Department, ILO

Presentation | 15 March 2013
Public and private investments in physical infrastructure are critical for growth and development since they have the potential to create domestic capabilities in addition to physical assets and employment. Infrastructure investment contributes to the accumulation of physical capital and to creating or improving physical connectivity through transport and communication as well as energy supply. This facilitates trade, crowds in private productive investment and increases productivity. The process of infrastructure investment, building and maintenance of infrastructure creates new jobs, temporary and longer term jobs, in particular by choosing labour intensive technologies. Finally, infrastructure development provides the opportunity to create domestic capabilities in the labour force and in enterprises and has a high potential and leverage to contribute to the dynamics of productive transformation.
The presentation addresses the following guiding questions:
• How should infrastructure development policies and procedures be designed to accumulate domestic capabilities for diversification?
• What is the role of the Governance structure, involved enterprises, local contractors and big companies, and the workers? How does a successful environment look like?
• How should technologies be chosen in the light of job creation, productivity and capability creation objectives?

Workshop on "Boosting economic dynamics and job growth: the potential of industrial policies" organized by the ILO and the Geneva Office of the Friedrich Ebert Foundation (FES) 4-5 March 2013.