To what extent do you think Government investment in infrastructure will impact the strategic and functional decision-making in the UK? Explain your reason.
A lot of modern infrastructure, such as internet services, provide a lot of opportunities for businesses. If the government increases investment in fibre delivery, then businesses will be able to more easily migrate to an internet centred business. Whether this is in terms of closing an office and switching to online work, or whether it means conducting business with clients digitally. If you want to have a meeting with someone on the other side of the UK, then instead of one party having to travel and spend a long period of time being unproductive, a simple web-based meeting could be setup to allow both parties to discuss from their own locations. With higher investment in the internet, this becomes much more achievable.
However, far more important is traditional infrastructure like roads. Take a company like Tesco for example, they offer a home delivery service to customers to make it much easier to shop with them. However, in order for them to effectively offer this service, they rely heavily upon roads. If roads are poor, then their delivery vehicles will be forced to move slower and will be more likely to sustain damage. Therefore, Tesco will not offer this service in areas where roads are of poor quality. If the local authority or wider government takes action to improve road quality, then Tesco is likely to start offering home delivery in the area. Not only will this provide an additional service to residents, but it will also provide jobs and additional income generation to the area. Because of this, we can assume that an increase in infrastructure quality in an area will result in an increase in quality of life for residents and an increase in local GDP.
Foreign businesses are also more likely to decide to bring their future ventures to the UK if there is a more reliable, modern, and stable infrastructure situation across the country. So investing in infrastructure now may lead to more industry entering the country in future. This, in turn, will provide jobs and value to the economy, whilst also generating additional tax revenues for the government which will repay the costs of infrastructure development and then fund future projects and expenditures.
It may not always be the best option to invest heavily in infrastructure, however. More remote areas of the UK such as the Scottish highlands are not well suited to industry and are also extremely sparsely populated. This means that any major infrastructure improvements here won’t have much benefit at all. Whilst there are people living there, and they would appreciate the change, there are no major business functions that would provide real benefit to the country as a whole.
Functional decision makers will want to operate near good infrastructure, whilst strategic decision makers may be more inclined to begin operation near upcoming infrastructure improvements in an attempt to reduce initial costs.