For my course I'm analysing the problem of empty retail stores. I need to analyse how my alternatives to solve the problem would change the important factors about the problem in uncertain scenarios.
We chose to analyse how our solutions(investment in training, knowledge platforms and strategic growth) would affect the factors(investment in IT, average revenue and the amount of empty m2) in the doom scenarios with positive and negative economic growth and positive and negative investment in infrastructure.
One of my teachers that saw the presentation about the analysis said that he couldn't see economic growth happening without investment in infrastructure. Don't mind him if he's wrong because he actually teaches us how to give presentations.
But the following question arose: Does economic growth always implies that there will be significant investments in infrastructure, or can I see both factors as enough decoupled to analyse them separately?


In economics, we commonly use the formula for GDP as a Indicator of "economic growth"

The GDP formula is: GDP=C+G+I+NX

Where C is equal to all private consumption, or consumer spending, in a nation's economy, G is the sum of government spending, I is the sum of all the country's investment, including businesses capital expenditures and NX is the nation's total net exports, calculated as total exports minus total imports (NX = Exports - Imports).

Notice how we can have an increase in GDP by increased consumption or government spending. So technically we can see economic growth without any investment in structure (which would be represented by an increase in I) from a mathematical perspective.

Note how this is a static measurement of economic activity, which we cannot make any predictions regarding the future. However you may want to look at the Solow-Swan Model regarding economic growth with capital accumulation and technological change.

Hope this helps.


This is a really interesting topic, for which you will get "opinion-based" answers.

So, I'd like to give my opinion, but please, don't treat it as the "absolute" truth.

On one hand, infrastructure is needed to get the economy growing. However, the type of infrastructure can be very different. If you are looking to generate economic growth from agriculture, you'll need a different type of infrastructure than let's say for steel mills.

On the other hand, if you have some favorable economic conditions, but a lack of infrastructure, it depends on how favorable those conditions are. Since in your scenario we are implying some economic growth already, infrastructure will be created in a way that meets the needs of the growth driver.

However, in my opinion, this will only go to a certain level. Basically, if you have good infrastructure somewhere already, economic growth is less likely to drive further infrastructure development. Large scale innovation will drive infrastructural development, but economic growth by itself won't.


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