Firm-specific infrastructure

Firm-specific infrastructure

In macro-economics the term infrastructure usually refers to public infrastructure. That is, that which provides or supports state services. There is also firm-specific infrastructure such as factories, private roads, capital equipment, and other infrastructural capital assets under private ownership.

The related term "firm-specific human capital" applies to the development of individual capital, social capital and instructional capital to specifically enable the activities of a particular firm or enterprise.

May be critical

So-called critical infrastructure includes some public and some firm-specific assets, for example, a private electric power utility would include assets such as transmission towers and transformers. For purposes of determining if they are "critical", it is their function, not their ownership, that matters.

Types of infrastructure

Information technology

Special terminology has evolved to deal with infrastructure that is devoted to information and communication. In this area in particular, public infrastructure may rely on a large number of private operators, e.g. Internet service providers, telcos, computer support and boot image service providers. The management of these assets is usually described in terms like:
*total cost of ownership and of operations
*technology lifecycle management
*information technology asset management
*supply chain management
*technology deployment methodology
*service level agreement.

According to Harry Zarek, a Canadian systems integration expert, these and "many other concepts are important to running a modern technology infrastructure." Such assets all would be considered firm-specific infrastructure.

Accounting treatment

Accounting for firm-specific infrastructure investment varies by jurisdiction. The GAAP framework is the most generally applied, though not followed everywhere.

In Canada, one focus of accounting reform efforts is to match Capital Cost Allowance for asset depreciation to either actual, or desirable, asset lifecycle of each type of asset. There are numerous tradeoffs in policy including the dangers of encouraging waste if assets too easily become a "writeoff", or failing to keep up with the technology of a rapidly changing industrial base.

With respect to information technology in particular this is a cogent concern, as toxic e-waste is becoming an increasing problem everywhere computers and cell phones are used.

In Canada the rapid writeoff of new technology has been linked to the goal of sustainability, so that only those assets which aid in energy conservation, materials conservation and waste reduction quality for favourable accounting treatment. "With respect to public infrastructure, this goal is being pursued a different way - via best practice exchange in sustainable municipal infrastructure, and government performance auditing."

Wikimedia Foundation. 2010.

Look at other dictionaries:

  • Infrastructural capital — refers to any physical means of production or means of protection beyond that which can be gathered or found directly in nature, i.e. beyond natural capital and that which is not considered as fluid capital . It may include tools, clothing,… …   Wikipedia

  • Water privatization in Brazil — has been initiated in 1996. In 2008 private companies provided 7 million Brazilians 4% of the urban population in 10 of the country’s 26 states with drinking water. The private sector holds 65 concession contracts in the states of São Paulo, Rio… …   Wikipedia

  • Diamond model — The Porter diamond[1] The diamond model is an economical model developed by Michael Porter in his book The Competitive Advantage of Nations,[2] where he published his theory of …   Wikipedia

  • Nossaman — LLP Headquarters Los Angeles, California No. of offices …   Wikipedia

  • Privatization — Part of a series on Capitalism Concepts …   Wikipedia

  • Business cluster — A business cluster is a geographic concentration of interconnected businesses, suppliers, and associated institutions in a particular field. Clusters are considered to increase the productivity with which companies can compete, nationally and… …   Wikipedia

  • HERAS-AF — HERASAF (Holistic Enterprise Ready Application Security Architecture Framework),, is a university project at the University of Applied Sciences Rapperswil (Switzerland),, which has the focus on making… …   Wikipedia

  • Fraunhofer Society — The Fraunhofer Society ( de. Fraunhofer Gesellschaft) is a German research organization with 58 institutes spread throughout Germany, each focusing on different fields of applied science (as opposed to the Max Planck Gesellschaft, which works… …   Wikipedia

  • Business and Industry Review — ▪ 1999 Introduction Overview        Annual Average Rates of Growth of Manufacturing Output, 1980 97, Table Pattern of Output, 1994 97, Table Index Numbers of Production, Employment, and Productivity in Manufacturing Industries, Table (For Annual… …   Universalium

  • ECONOMIC AFFAIRS — THE PRE MANDATE (LATE OTTOMAN) PERIOD Geography and Borders In September 1923 a new political entity was formally recognized by the international community. Palestine, or Ereẓ Israel as Jews have continued to refer to it for 2,000 years,… …   Encyclopedia of Judaism

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”