New Horizons in Regional Science series
Edited by Charlie Karlsson, Börje Johansson, Kiyoshi Kobayashi and Roger R. Stough
Chapter 6: Knowledge and skill for infrastructure technology and economic growth
In economic globalization, any national or regional economy must improve productivity to survive amid worldwide competition. High productivity is attained not only by production technologies embodied with private capital, but also by civil infrastructures such as transport, energy supply and communication systems. As has been pointed out in many studies and reports, such as Bernstein (2004), these infrastructures all play crucial roles in economic growth in the long run and, furthermore, the survivability of a national economy. Whereas they are indispensable for production, infrastructure costs are so huge at the macroeconomic level that they are always on the table in any discussion of fiscal efficiency. Hence, efficient infrastructure technologies embodied as knowledge and skill in engineers and skilled workers contribute indirectly, but significantly, to attaining the high productivity of a national or regional economy. In the Japanese economy, while some industrial sectors such as high-tech sectors keep on driving the economy by maintaining their productivity, the economy will hardly survive if civil infrastructures – serving as the foundations of all industrial sectors – cannot function well. The Japanese economy is currently facing difficulties in maintaining the level of investment in civil infrastructure that has been made in the several decades following World War II, the value of which amounted to about 700 trillion yen in 2003. The limited financial resources of the economy will hardly be allocated to infrastructure development, and the share will shift from construction to maintenance.