What Is Infrastructure? Definition & Example in Industry

In achieving goals, proper and strong infrastructure is important. Infrastructure is also crucial for the sustainability of a country and the businesses within it.

This article discusses the ins and outs of infrastructure, why it is important, and its types. Thus, read until the end to learn the complete information.

What Is Infrastructure?

Infrastructure is a facility needed by the society to do the daily activity. The term infrastructure came up initially at the end of the 1880s, derived from French which infra means below and structure means building.

Therefore, infrastructure can be defined as the foundation of economic building. It has various systems needing physical components, such as bridges and roads. This makes infrastructure crucial for social and economic society.

Typically, private companies will invest in infrastructure to expand their business. For example, construction companies will take part in the toll road construction project connecting several areas.

Why Is Infrastructure Important?

Infrastructure is one of the elements that society needs because it connects the employee with the work or the society with the facilities. Here are the benefits of infrastructure:

1. Growing the Economy

Infrastructure is important for the economic growth of an area in a country because it can help the running of business, provide job openings, and streamline the distribution process of products and services.

Thus, one way to lower rates of unemployment and poverty and keep the economy growing is through investment in infrastructure.

2. Reducing Hinders in the Supply Chain

A proper infrastructure can reduce obstacles in the supply chain. This is crucial to make economic processes, exports, imports, and utilization of labor run well.

3. Improving the Society’s Life Quality

Infrastructure opens access to clean water, nutritious food, medical facilities, houses, and education. It builds the foundation to create a good life for the community.

Types of Infrastructure

In general, infrastructure is divided into two: hard and soft infrastructure. Hard infrastructure is physical structures, such as bridges and railways.

On the other hand, soft infrastructure is a service supporting the economy, such as medical facilities. Here is the information about both types:

1. Hard Infrastructure

Hard infrastructure is a physical system needed to make the country run well and follow industrial development. Examples of hard infrastructures are highways, bridges, roads, vehicles, and bus stops.

Besides, hard infrastructure also includes the need for networks and cables supporting the business. Moreover, below are other examples of hard infrastructure:

Energy infrastructure: Energy supply from coal-fired, natural gas, and nuclear power plants. This sector is also responsible for developing sustainable innovation by investing in renewable energy.
Telecommunication: Telecommunication includes technology assets running the communication system, such as the internet network, broadcasting network, satellite, and telephone network.
IT infrastructure: This infrastructure includes support for data movement through cloud computing systems, data centers, and operating systems.
Waste management: Waste management includes landfills, gutters, and recycling facilities.
Water infrastructure: Clean water system for drinking, power plant, and irrigation; water flow building; dam; drainages; and wells.

In Indonesia, there were more than 8 million workers absorbed by the construction sector in 2023. The construction sector also contributes to 9.94% of the national Gross Domestic Product (GDP) from 2015–2021. This means that hard infrastructure also opens other job potential and contributes to the national income.

2. Soft Infrastructure

Soft infrastructure is the institutions and work skills needed to support the economy. Examples of soft infrastructure are medical services, education institutions, financial services, government offices, and legal entities.

The Components of Infrastructure

Aside from types, infrastructure also has components determining how it works. Here is the complete explanation:

1. Infrastructure Components with Inputs

This component focuses on infrastructure giving inputs to the social and economic condition of the society, such as a power plant and clean water access leveraged by the community.

2. Infrastructure Components Taking Outputs

The next component is the one taking outputs from the community’s activity, like household waste. The infrastructure created includes water channels, waste disposal systems, and drainage channels.

3. Combined Infrastructure Component

This component combines both components above and focuses on giving inputs and taking outputs from society. An example of this component is a telecommunications network.

Example of Infrastructure in the Industry

Infrastructure is not only built for the public’s welfare but also ensures that the business process runs well. One of the roles of infrastructure is helping the business process in the industry.

One example of a company providing infrastructure solutions is Chandra Asri Group. Chandra Asri Group offers efficient solutions for the industry, which are energy, water, and logistic solutions.

For energy solutions, Chandra Asri Group’s subsidiary, Krakatau Chandra Energi offers energy powered by a Combined Cycle Power Plant (CCPP), electricity services, and renewable energy through solar panels.

Next, the water solution is managed by Krakatau Tirta Industri operating clean water, demin water, and wastewater management.

Moreover, the Chandra Asri Group operates raw material port logistics and storage services through PT Chandra Daya Investasi. Chandra Daya Investasi provides tanks and docks services for chemical and crude oil.

These infrastructural options certainly can accommodate industrial operations, particularly the storage of chemical products, water supplies, and electrical requirements.

Those are the information about the infrastructure you can learn. Overall, it can be concluded that infrastructure is important for the country's sustainability, including the economy and the society’s welfare.