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Infrastructure Is Critical to Sustained Economic Development in the Global South – Here’s Why

Infrastructure Is Critical to Sustained Economic Development in the Global South – Here’s Why. Infrastructure Is a Force Multiplier for Foreign Direct Investment.

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It’s not overstating things to say that the world depends on infrastructure. Without ports, railways, roadways, airports, bridges, utilities, and the like, business doesn’t get done.

In much of the world, the infrastructure conversation revolves around maintaining or upgrading what’s already in place. The United States hasn’t built a major new commercial airport in nearly 30 years, and even ground-based transportation infrastructure is challenging to complete due to ballooning construction costs and onerous approval processes. (New York’s 1.8-mile Second Ave Subway is widely regarded as the most expensive rapid transit project ever constructed on a per-mile basis.)

Of course, high development costs and permitting issues aren’t unique to first-world countries like the United States. They affect infrastructure projects in the developing world as well. But, by definition, building new infrastructure is more critical in the underdeveloped economies that collectively make up the “Global South” than in Europe, the United States, and other high-income parts of the world.

Unfortunately, key stakeholders don’t always fund badly needed infrastructure in places like Africa, Latin America, and Central Asia. Here’s why they’d do well to remove barriers to innovative development.

1. Infrastructure Is a Force Multiplier for Foreign Direct Investment

Modern physical infrastructure is a vital precursor to local economic development. It’s also a force multiplier for foreign direct investment. To many international businesses and high-net-worth individuals, infrastructure quality is a make-or-break factor in developing-economy investment decisions.

Recent infrastructure development in places like the Southern African Development Community (SADC) confirms this thesis. From 2016 on, foreign direct investment in the SADC’s logistics infrastructure increased sharply, spurring private investment in related projects as the decade drew to a close.

“From warehousing and last-mile fulfillment to the road, rail, and port infrastructure, these investments underpin an increasingly stable and prosperous regional economy,” writes Christopher Roy Garland, a business advisor and economic development expert based in Botswana.

2. Infrastructure Improvements Brighten Prospects for Local Entrepreneurs

Infrastructure improvements don’t only redound to the benefit of foreign governments, grantmaking organizations, and international conglomerates. The biggest beneficiaries are often local entrepreneurs who secure contracts with these organizations and develop businesses downstream of their activities.

Vibrant entrepreneurial communities take decades to build. Once they’re present, however, they’re vital assets for their host countries. Their market activities support growing middle classes, which in turn help consumer economies that spur further local investment. And by employing unskilled and semi-skilled workers in their home countries, they provide an under-discussed but crucial political function, boosting economic morale and dampening potential sources of social instability.

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2. Infrastructure Investment Provides Sponsor Nations With Political Leverage

Initial investments in large-scale infrastructure projects in the developing world very often do require active outside stakeholders. China’s Belt and Road initiative is merely the highest-profile example of concerted developing-world infrastructure investment as a more prosperous nation’s foreign policy project. The United States has USAID; other advanced economies make an intentional foreign direct investment for political purposes.

Like it or not, this is the global state of affairs in the early 21st century. It’s the sincere hope of most global development stakeholders that policy-driven FDI will one day cease to be a driving factor in developing-world infrastructure investment. Still, that day remains well over the horizon.

4. Stable, Prosperous Economies Enable Geographic Diversification for Risk-Averse International Investors

As the saying goes, a rising tide lifts all boats. When the groundwork laid by targeted infrastructure investments succeeds in stabilizing a country’s politics and raising its ceiling for economic growth, a broader class of risk-averse global investors takes notice.

These investors, both retail and institutional, vote with their dollars. They place bets on the economic future and create virtuous feedback loops for developing economies.

They also pave the way for other investors for whom geographic diversification is essential only when achievable without undue risk. And that’s the point at which a country or region can say, “Yes, we are open for business.”

5. Better Infrastructure Means Shared Prosperity

The history of the past 200 years would likely have been very different for European and North American nations without sustained public and private infrastructure investment in those parts of the world.

When some future generation looks back at our moment in time, let’s hope they’ll have something similar to say about the trajectory of infrastructure investment in the developing world. Let’s hope they’ll see a sustained and fruitful campaign to unlock the economic potential of dozens of nations and billions of individual humans.

Let’s hope. And let’s work together to make it happen. Because better roads, bridges, ports, broadband — these are the raw ingredients for a more prosperous and productive future. We owe it to generations to come to invest today.

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Business

Are Bundle Deals Cost-Effective in Reality?

Are Bundle Deals Cost-Effective in Reality? The Relation between Discounts and Consumer Trends, The Concept of Bundling, Bundle Services

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Are Bundle Deals Cost-Effective in Reality

We as humans love to save money., How much we succeeded at it is a different story altogether. T, that is why we often see huge crowds standing in lines out of stores whenever a heavy discount sale occurs. It is human nature that they pounce on opportunities to feel that there is something extra to be gained.

A, add a time limit on that, and people will go crazy. That is why we see flocks of people on Black Friday, Christmas, and Thanksgiving sales because events like these do not only offer cost savings, but they are available for a minimal time. The fear of missing out is prevalent in the human psyche, and marketers constantly study these consumer patterns to boost sales, invoking specific trigger points of consumers.

1. The Relation between Discounts and Consumer Trends

All this sounds absurd, but scientific studies have also proven that when people wait for such sales and get their desired products from a horde of people fighting for the same thing, it invokes a sense of achievement. This is the natural reward system of our human brain that gets activated when we buy things that we like. This response is immensely amplified when a certain kind of discount or special deal is associated with it. 

Our brain releases dopamine, the same chemical released when we eat something that we like, are in love, or in general, whenever we are happy. This same chemical is also released when you get something out of a deal or a sale, giving a sense of pride and achievement. It might sound funny that you feel rewarded even though you’re not winning anything and you’re paying for it, but that’s how our brains work.

Good teams in big consumer-based organizations make specialized formulated tactics like flash sales and bundle products that attract customers in the name of discounts and limited-time deals. These discounts are offered for several reasons in product-based companies. These discounts are mostly provided on the existing stock to empty the inventory on marginalized prices to fill the new store. This is precisely what big corporations target to trick customers into buying more. 

On the other hand, service-based companies offer bundle deals and discounts to attract new customers and roll out more products in a push to increase revenue and enhance the customer base. It should be noted that a company never compromises on their profit, so these price cuts are offered when a company has reached a specific target revenue and need to push for an extra boost.

2. The Concept of Bundling

There are a lot of techniques to boost sales and drive out more products, and one such tactic is bundling up the service. These bundles are offered in many names like packages, deals, sets, combo, and many other terms, are used, but the underlying fundamentals of marketing remain the same. This is usually done in service-oriented businesses.

However, we see examples of this in the food business, like McDonald’s, KFC, and Burger King that add fries and drink along with their burgers to make a combo or meal. The concept of bundling is to offer different products with reduced pricing in contrast to what they cost separately. This technique is employed mainly by ISPs who bundle their additional services for a slightly lesser price.

Internet service providers mainly offer additional services like cable TV and home phone, among others. T, the concept of bundling is mainly used when a service provider often bundles all these services in a single package and reduces the prices of all three services in the bundle as compared to purchasing them separately at their standalone rates.

This strategy drives their additional services to more consumers, increasing the user base, and helps create a brand value through the expansion of services. On the other end, customers get discounted prices. For example, comparing Spectrum bundle deals for internet, TV, and phone shows that the prices are somewhat reduced when buying a bundle instead of choosing a la carte services.

In the end, this strategy is a win-win situation for both consumers and companies alike. Apart from all this, there are a few more advantages regarding bundles that we will discuss further on.  

3. Why Bundle Services?

Bundling is a great way to get different services. I, it is especially favorable to get these bundles from brands you trust. With the current recession in the market and low buying power, people might not go towards bundling, but this can help them save in the long run if done right. Due to this, we are explaining some benefits customers can achieve through bundling:

4. Everything under One Bill

Everything under One Bill

This is an advantage that most people tend to ignore when considering bundling up the services. Usually, there is a lot of hassle at the start of the month since different bills start piling up for additional services and amounts.

Usually, what happens is that with so much to take care of, people forget the due dates of these bills, which results in a late fee penalty and some cases, complete service disconnection. With bundles, everything usually comes in a single statement so that users can conveniently pay for different services together without any hassle.

5. Cost Saving

They are now coming to the main benefit of bundling, the price. This question is somewhat complicated as bundling saves you some money but not how a regular consumer thinks. Yes, the fees of service drop when bundled instead of when purchased as a standalone product.

But the actual savings come in associated costs. Usually, in the case of internet providers, many other chargers are associated with the service, like installation charges and taxes. This is where a bundle saves you money.

The installation charges of a standalone service and a bundle remain the same, so a user can get all the services included in the bundled installed on a single price instead of paying extra whenever adding services.

On the opposite hand, bundled services’ rates and fees are also reduced in contrast to paying them additionally on each service separately. T, this is how a bundle saves you money.

Conclusion 

We have already established that bundling has some key advantages. Apart from just being a regular marketing gimmick, bundling can help consumers save some bucks. Although this approach might not suit everyone, if you’re interested in getting services and all those services can be achieved in a bundle, we recommend that you go for it.

But make sure that you get bundles from reputable companies, especially for services like the internet and TV, so that you don’t get stuck with the wrong service provider.

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