Capital Intensive Project

Capital intensive project refers to the project which uses more capital, technology and skill manpower to complete the project within specified parameters (time, cost and quality). It require large amount of capital and less workforce in comparison to labor intensive project. It means, capital used in per unit of output is larger than the same unit in labor intensive project.

Generally capital intensive projects are profit oriented. It's task are complex in nature. So advance technology like automation, computerization, robotization and information is extensively used on capital intensive project. It makes the project less costly in long run. It is better technique for qualitative and mass production. Mostly it uses high skill technical and professional manpower. But it does not provide employment opportunities to all types of work force in society. It violates social equality and justice.
Capital intensive projects are appropriate to implement in those countries where availability of sufficient capital for investment, well technological development, availability of well skilled manpower and high level cost due to labor shortage. However it helps to improve the economic condition of developing country rapidly.

Advantages of Capital Intensive Project:
  • It produces greater quality output.
  • It is less time consuming than labor based technique.
  • It is less costly in long run.
  • It is best suited for handling complexity.
  • It increases the export trade.
  • It helps to develop technology.
  • It makes possible optimum utilization of resources.
  • It contributes in rapid economic growth of a country.
  • It promotes skill and knowledge.
Disadvantages of Capital Intensive Project:
  • It ignores human factors.
  • It needs huge amount of capital for investment.
  • It uses expensive technology.
  • It may adversely affect the balance of payment due to huge enforcement of large machinery, equipment and technology.
  • It reduces the employment opportunity.
  • It may create the situation of social injustice due to unequal distribution of income in society.

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