Relationship between new infrastructure development and economic prosperity

relationship between new infrastructure development and economic prosperity

relationship between critical infrastructure and national prosperity. In order to gain a investment and growth and the creation of new economic opportunities. infrastructure systems serve the needs of the greater region while meeting internationally competitive economy, strengthening the relationship between workforce designate land for economic development, the Housing Element to provide workforce . competitiveness and innovation, and are the primary source of new. The lack of infrastructure is most severe in Africa's long-neglected rural areas, where the infrastructure deficit is at the heart of Africa's development plan, the New With African economies growing at an annual rate of 5 per cent or more, . Increasing user charges on those able to pay more and changing connection.

In fact, entrepreneurship has been considered as the engine of economic growth and it has come to be perceived as a catalytic agent for expansion and promotion of productive activities in every sphere of economic life all over the world. The role and significance of entrepreneurship development in numerous nations worldwide were quite significant. Numerous countries leaders and scholars have proposed that entrepreneurship can be a panacea for empowerment, job creation, economic transformation, and poverty reduction.

For the past decades, numerous nations in developed and developing nations have moved their policies from being directed towards a managed economy to an entrepreneurial economy. In addition, entrepreneurship largely contributes to proper utilization of resources, the establishment of a developed self-sufficient society, and creation of employment opportunities. The role of entrepreneurship in economic development through job creation has turned out to be a priority for numerous nations against the provision of foreign aid.

Speaking of foreign aid, despite the trillions of dollars of aid allocated to African nations, Africa still experiences a constant upward shift in poverty line over two decades. In the s most of the Sub-Saharan African countries came out of colonization, hence being influenced to adopt a state-led centrally planned economic structure since they gained independence.

Meanwhile, most developed economies in the recent time adopted a different model for their economic growth and development in absolute poverty reduction and employment creation.

Governments of these African nations should be aware of the significance of making the best advantage of this young population, otherwise, it will be turned into a burden particularly in the prevailing soaring unemployment trend among most of the African nations.

Youth unemployment is a problem that affects most countries, especially in Africa Okafor as cited in Adebayo [ 3 ]. The capability of youth to engage in productive activities has both social and economic consequences in the society. There are almost 1. According to the ILO IbidAfrica has the fastest growing and most youthful population in the world hence the biggest workforce. Over 40 percent of this population is under the age of Specifically, it is estimated that bythe youth will constitute Nearly million people in sub-Saharan Africa are aged between 10 and 24 years, and these figures are anticipated to soar to around million by the middle of this century ILO Ibid.

To find a solution to this young population and judging from the levels of unemployment in Africa, employment creation that specifically centres on promoting the entrepreneurial sector in the economy becomes vital.

Since the s, small business owners and entrepreneurs have been receiving greater recognition as drivers of economic growth. Recently, several studies [ 56 ] have reported that long-term economic growth and prosperity require participation from entrepreneurs.

Over the last two decades, the extensive literature on the importance of small businesses in the economy has consistently shown that the creation of new businesses drives economic prosperity. Also, playing a crucial role in increasing the competition of emerging sectors, new small businesses are critical to economic growth and innovative capacity in many regions.

Moreover, the fact about entrepreneurship and what it can do to bolster African economy remain inevitable that is why entrepreneurship is identified as an important driver of employment creation in African economies.

Entrepreneurship boosts economic growth by introducing innovative technologies, products, and services. It also provides new job opportunities in the short and long term. Entrepreneurial activity raises the productivity of firms and economies. They also accelerate structural change by replacing established, sclerotic firms and this is what is really needed for the economic growth of Sub-Saharan Africa.

relationship between new infrastructure development and economic prosperity

The rest of the paper is structured as follows: Section 2 looks at the literature review on entrepreneurship as a catalyst for economic prosperity. Section three analyses entrepreneurship, unemployment and poverty reduction in a close relationship; section four looks at the obstacles faced by the entrepreneur in Sub-Saharan Africa countries and business development services challenges; section five concludes the paper with some possible recommendations.

Literature Review The literature review section consists of two parts: Entrepreneurship-growth relationship According to Audretsch et al. However, empirical evidence on the relationship between entrepreneurship and economic growth is conflicting.

According to Van Stel et al. In another study, Reynolds et al. Also, some other authors find the similar outcome in their studies [ 11 - 13 ]. According to Baumol [ 14 ], the author juxtaposes entrepreneurship against the hackneyed prescription of Keynesian theory that in times of economic downturn augmented government spending should be the panacea. According to Jiang et al. Evidence from West Germany indicates that entrepreneurship positively impacts growth.

Mueller [ 17 ] tests the hypothesis that entrepreneurship and university—industry relations promoted economic growth in West German regions between and and reports that regions with a prominent level of entrepreneurship and university—industry relationships record greater productivity, and consequently, economic growth.

Both start-ups in innovative industries and university research in engineering science are found to advance economic growth. Mueller [ 18 ] tests whether entrepreneurship is an important medium for knowledge flows and economic growth for the West German regions between and and finds that a rise in innovative start-up activity is more effective than an increase in general entrepreneurship in accelerating economic growth.

In another study, Stefanescu [ 19 ] examines the correlation between economic development and entrepreneurial activity in the European context.

The results also suggest that increases in self-employment promote economic growth over the short term but reduce economic growth in the long-term horizon.

Role of Critical Infrastructure in National Prosperity

According to Galindoa and Mendez [ 21 ], the authors examine whether feedback effects exist among entrepreneurship, economic growth and innovation employing statistics from thirteen developed nations. The authors discover proof in support of feedback effects: The authors discover that innovation activities give backing to economic activity as well. It seems there is some cloud of scepticism surrounding the significance of entrepreneurship to economic growth in developing nations. Such entrepreneurs are, however, of no relevance to economic growth [ 22 ].

Also, Baumol et al. Although they concede that it is the innovative entrepreneur who is needed for economic growth, they hardly write replicative entrepreneurship off, arguing that it is relevant in most economies insofar as it serves as a route out of poverty [ 23 ]. According to Pahn et al.

relationship between new infrastructure development and economic prosperity

They rather identify government influence as the significant determinant of economic growth [ 24 ]. In another study by Li et al. This abysmal performance, according to experts, should be blamed on factors such as lack of sensitivity of raw agricultural products to international prices, poor infrastructure, lack of human and financial capital; quality standards, inappropriate trade policies, poor management of human resources, and government policies that are hostile to entrepreneurship [ 27 ] study establishes that Africa can boast of many entrepreneurs who have the competence to spot business opportunities and to take advantage of them.

However, African private entrepreneurs are deficient in financial and managerial ability to operate large and sophisticated businesses [ 28 ]. This raises the question as to whether entrepreneurship in Africa promotes economic growth. Answering this question is the focus of this study. Other determinants of economic growth One determinant of economic growth that has galvanized a lot of empirical attention is financial development.

Investigations into the relationship between finance and economic growth have reported conflicting outcomes. Few studies have reported an insignificant relationship between finance and growth [ 3940 ]. Human capital is one of the documented determinants of economic growth. Most studies that have investigated the relationship between human capital accumulation and economic growth have adopted two approaches: The growth accounting framework submits that education supports economic growth by increasing the human capital stock of individuals and improving their productivity.

Entrepreneurship and Economic Growth: Does Entrepreneurship Bolster Economic Expansion in Africa?

The endogenous growth model contends that the creation of innovative ideas is a direct function of human capital which finds its expression in the form of scientific knowledge. Thus, investment in human capital drives growth in physical capital and this, in turn, culminates in economic growth. Human capital accumulation might stimulate growth by catalysing technology adoption [ 43 ] or human capital might be necessary for technology use [ 44 ].

There are four principal predictions in the literature relating to the impact of inflation on output and growth [ 45 ]. The first prediction, credited to Sidrauski [ 46 ], forecasts that inflation has no effect on growth money is super-neutral. The second prediction, attributed to Tobin [ 47 ], is that money is a substitute for capital, causing inflation to have a positive effect on long-run growth. The third prediction cashin- advance model propounded by Stockman [ 48 ], sees money as complementary to capital, predicting that inflation should have a negative impact on long-run growth.

The models posit that financial market efficiency is influenced by various informational asymmetries.

Role of Critical Infrastructure in National Prosperity

For instance, high rates of inflation typically exacerbate financial market frictions, obstruct the efficiency of the financial system and thus undermine economic growth. Indeed, inflation is identified as one of the most important determinants of growth [ 50 ]. The literature emphasizes the value of openness to international trade, both as a means of affecting the transfer of technical progress and as an engine of growth [ 5152 ]. Trade, either in the form of exports or imports represents growth-enhancing interactions specialization, exchange of ideas through exports or acquiring foreign technology through quality imports among countries acting as a channel for knowledge dissemination; thus, more open economies should chalk higher growth rates [ 53 ].

Anyanwu and Yameogo [ 54 ] report that trade openness has a positive relationship with foreign direct investment FDI inflows in Central, North, Southern, and West Africa. The neoclassical growth theory posits that a rise in investment level increases the steady-state level of output per worker and, therefore, increases the growth rate of output. On the other hand, the endogenous growth theory uses economies of scale and spillover effects to support the way improved investment promotes growth [ 53 ].

In short, the two theories predict a significant impact of investment level on economic growth. Government spending is known to influence economic growth. On the other hand, unproductive government spending could undermine growth [ 56 ]. Entrepreneurship as an intervention strategy to poverty alleviation Widespread poverty had been a prolonged challenge in Sub-Sahara Africa Country.

Generally, in examining poverty in sub- Africa, we consider of all sub-sharia African country. According to Global development, nearly half all children in sub-Saharan Africa are in extreme poverty. This data shows that Nigeria is rated with the highest number of poverty of 86 million seconded by Democratic Republic Congo which accounts for about Considering the poverty in Sub-sharia Africa as stated according to World Bank, around half of those living in extreme poverty by will hail from hard-to-reach fragile and conflict-affected states, moreover, Sub- Saharan Africa accounts for half of the global poor [ 58 ].

Across the planet, the number of people living in extreme poverty has dropped by more than half sinceChina is one of the remarkable success stories in poverty reduction. China cut down the level of the poverty line to Having gained her sustainable economic prosperity development, Sub-Saharan African need to adopt China development model as a template for own economic emergency.

This call for a better impact for sub-Sahara Africa nations. Entrepreneurship as a catalyst for economic prosperity not aid Aid is ineffective. The stories of failure are illustrated with hydro dams that never function, crops that never grew and roads that went nowhere. These serve to underscore the importance of enhancing critical infrastructure resilience within organizations. Modern societies are becoming increasingly dependent on the critical infrastructure systems that provide essential services that support economic prosperity.

However, because these systems are increasingly interdependent the potential exists for initial large and small failures to cascade into events of catastrophic proportions.

Investing in resilience and mitigation and building robust and redundant systems throughout our countries can minimize the length and magnitude of these disruptions. When investing limited resources into infrastructure, we should consider how we identify critical infrastructure, not just for protection, but for resilience, mitigation, and recovery so infrastructure can absorb a potential disruption or return to a steady state after disruption.

By addressing these issues, investments can have both intended and unintended impacts and can result in both positive and negative consequences. For instance, steps taken to address redundancy and resilience can not only mitigate risks of dependencies and enhance critical infrastructure protection, but they can also enhance national prosperity.

Furthermore, such actions can moderate risk and lead to less detrimental impacts on economic growth from natural and manmade incidents. New Zealand, for example, has considerable exposure to and experience of seismic hazards. Australian critical infrastructure is exposed to a wide range of natural disasters that often strain the ability of individual organisations to respond to and recover from. During the Queensland floods these guidelines were employed to facilitate the provision of a wide range of support to affected water companies.

This support included engineering and customer support personnel and equipment as well as post-disaster support to help affected water companies prepare complex insurance claims.

As a result of this aid the affected water corporations were able to restore services significantly faster than they would be able to on their own. The core recovery capability for economic recovery is the ability to return economic and business activities to a state of health and develop new economic opportunities that result in a sustainable and economically viable community. National governments may choose to consider establishing methodologies that can assist local governments and agencies to identify and understand the relationships among the people, businesses, industries and social organizations, networks, and cascading impacts from disruptions that sustain a community's socio-economic vitality to aid in recovery and improving resilience.

Government can also signal long term confidence in an area by returning operating services to the affected area quickly, which can act as a catalyst for private sector rejuvenation. Critical infrastructure recovery and restoration requires both public and private commitment to provide limited funds and may necessitate the deployment of personnel and resources from outside the affected region. Infrastructure critical to Critical Five nations are not geo-centric and can transcend national boundaries, which requires cross-border collaboration, mutual assistance, and other cooperative agreements.

The global supply chain and global economy are increasingly important considerations for businesses and government entities because of the reliance of critical infrastructure on materials originating from outside their own borders and the impact of these to national economies.

The dependency on resources and raw materials outside of our nations to produce our goods and the products that drive our national economy dictates that we focus on the resilience of global supply chains. The global supply chain repeatedly demonstrates the co-existence of operational optimization with operational vulnerability. This was most recently and dramatically demonstrated in the aftermath of the tragic earthquake and tsunami which devastated the northern coastal region of Japan in Collaboration amongst members is required to fully understand supply chain vulnerabilities and to implement coordinated global security and resilience measures.

Physical-Cyber Role and the Global Market Digital infrastructure increasingly serves as the backbone of prosperous economies, facilitates the global flow of goods and services, and plays an integral part in accelerating economic growth. Additionally, economic security is dependent on a reliably functioning digital infrastructure. Cyber infrastructure serves many purposes, including facilitating the free flow of information, goods, and services; protecting the security and privacy of data; and maintaining the integrity of the interconnected networks.

Cyber is essential to ensuring infrastructure functions efficiently and effectively, which in turn supports national economic prosperity. It is an important factor in determining the location of economic activity and the kinds of activities that can develop within a country. Well-developed infrastructure reduces the effect of distance between regions, integrates national markets and connects to markets in other countries.

Strong infrastructure connections can support countries in increasingly competitive markets, particularly in exports or attracting investment. Cyber infrastructure is vital to growing and sustaining national economies. The economic reliance on digital infrastructure to prosper, however, does create challenges and creates new avenues for threats to critical infrastructure. While cyber systems may not be a critical infrastructure sector as defined by each Critical Five nation, each country uses these cyber systems and they are closely intertwined with infrastructure resources.

Examples include the attack on Estonian networks in and the large scale denial of service attacks against Korea and the United States in Therefore, it becomes imperative to enhance the security and resilience of critical infrastructure and to maintain a cyber-environment that encourages efficiency, innovation, and economic prosperity while promoting safety and security.

Implementation and Action Governments may take specific action as a result of their understanding of the link between infrastructure and economic prosperity, in order to drive desirable outcomes. For example, by strategically placing national assets with regard to regional economic situations, which can boost or maintain economic prosperity as well as address security and supply considerations.

Governments may also use their knowledge of the link between infrastructure and economic prosperity as a macroeconomic tool, such as increasing investment in infrastructure during recessions or periods of low economic growth to stimulate the economy. As noted previously, government actions can support wider infrastructure investments and thus economic prosperity. Governments may create and promote efforts to achieve national goals aimed at enhancing national critical infrastructure security and resilience by describing the actions critical infrastructure community partners can take.

This can serve to guide the collaborative efforts of the critical infrastructure community to advance security and resilience outcomes. The purpose of the initiative is for U. Through public private partnerships and investment in infrastructure, the U. The New Building Canada Plan is the largest and longest federal infrastructure plan in Canadian history and focuses on supporting projects that enhance economic growth, job creation and productivity.