Long-term infrastructure investment: a new approach to the economics of location
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Technická Univerzita v Liberci
Technical university of Liberec, Czech Republic
Technical university of Liberec, Czech Republic
Abstract
Contemporary modern development of a region (RD) is associated with some conception of economic volatility and technological knowledge. The RD is triggered by the existence of an infrastructure as a threshold. Only then can we expect the long-term economic and regional effects. From the long-term view, the development of most regions is also associated with a surprising diversity. The reasons for growth or stagnation are very often indistinct, and in some cases they are even unidentifiable.Existing development is a materialized foot print of earlier economic activities and there is more about that, for example, in Quality of life in cities, (European Commission, 2013). We should understand the economics of RD as an account; an account of either poor or successful regional management. In other words, regional economics and management (E&M) is at its causal roots a proof of the right or wrong decision rules and their implementation. This article argues that the state of municipalities and of regions is only partly a hostage of the regional investment economy and that a non-negligible way to success is paved by decision making processes especially through the use of certain decision criteria.The paper aims to demonstrate that:a) an elementary decision rule determines the decision space determining both time and conceivable actions, (timing of innovations, use and functions of areas, implementation of particular investments, localization of research directions, market expansion, etc.);b) dispersion effects are around and outside the primary investment that generates the growth;c) the burnout effect of the initial investment exists and begins to act after a certain time period; d) fixing the time of the initial investment burnout is identifiable and can be calculated.Point c) and d) represent triggers for any need of new investments, usually called innovation, modernization, reconstruction etc.
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development, utility, simulation, infrastructure, evaluation, metamodel
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12123609