Infrastructure and connectivity
Throughout history, better-connected villages and cities have been more prosperous. From the ancient cities of Mesopotamia to the Phoenician and Greek harbors around the Mediterranean, from the Roman paved roads to the Silk Road that connected China to Europe, and from the railroad systems built in Europe and North America in the 19th century to the interstate highway system of the 1950s in the United States and to the current global Internet network, human progress has been associated with the infrastructures that facilitate the exchange of products and ideas.
The concepts captured in the infrastructure and connectivity category of the updated GCI are essentially similar to those captured in the first version of the GCI. The only novelty is that, in addition to assessing the quality of the transport infrastructure, the pillar also measures the quality of domestic and international transport networks. Well-developed physical and digital infrastructures affect productivity directly by connecting economic agents, reducing transaction costs, easing the effects of distance and time, facilitating the flow of information, and facilitating integration of markets into global value chains. Information and communication technologies (ICTs) are becoming increasingly important: there is a growing empirical literature on how ICTs facilitate innovation and impact firm and country productivity by giving decision makers more complete information.26
Indirectly, physical and digital infrastructures impact productivity by enabling and improving access to basic services such as sanitation, education, and healthcare, and therefore contributing to a healthier and more skilled workforce.27 Transport and—increasingly—digital infrastructures enable deeper social interaction, which contributes to creativity and innovation and, in turn, to productivity.
These links are well established empirically,28 providing substantial evidence of the importance for productivity of both the quantity and quality of surface and air transport, energy, ICTs, and connectivity.