Conclusions and Policy Implications

Abstract

Changes in the global business environment are amplifying the impact of infrastructure on industrial performance and competitiveness. With the shift toward open markets, global trade, and internet-facilitated creation of increasingly competitive markets, firms are under pressure to enhance competitiveness. At the same time, structural changes in industrial organization – the shift from vertical integration toward complex production networks in which firms depend on each other, and the move toward lean production and just-in-time delivery systems with little room for error – make firm performance more vulnerable to poor infrastructure.¹²⁸ These changes increase the cost for firms and governments of “doing nothing” about infrastructure.