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Glossary entry

English term or phrase:

capital-intensive

English answer:

industries that require ongoing investments in capital assets to produce goods (as opposed to labour-intensive)

Added to glossary by Deborah do Carmo
Mar 3, 2005 06:58
19 yrs ago
18 viewers *
English term

capital-intensive

English Bus/Financial Business/Commerce (general)
What does 'capital-intensive' mean in this context?

"The LNG industry is capital-intensive and until recently, has been shaped by fairly rigid contracts and relatively few players worldwide."

Thanks.
Responses
4 +4 requires a lot of (capital) investment
5 +1 Production processes that use a high ratio of capital to labor inputs.

Responses

+4
2 mins
Selected

requires a lot of (capital) investment

by way of explanation - parties in the industry would need to invest a lot of funds (money etc) to be effective players in that industry.

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Note added at 15 mins (2005-03-03 07:13:28 GMT)
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Here is the link content kindly supplied by Elizabeth

Capital-intensive

Definition: Used to describe industries that require large Investments in capital Assets to produce their goods, such as the automobile industry. These firms require large Profit margins and/or low costs of borrowing to survive.

Peer comment(s):
agree Elizabeth Rudin : http://www.marketvolume.com/glossary/c0064.asp
7 mins
thanks - nice link!
agree David Knowles
53 mins
Tks David
agree Tony M : High set-up costs, but maybe not too expensive to run; difficult to get started!
1 hr
I think you'll find the ongoing need for investment is normally there in most cases - thanks
agree Charlesp
3 hrs
tks Charles
neutral juvera : It is the opposite of "labour intensive", the start-up is one thing, but the running is "capital intensive". + I admit, I didn't read your answer to Dusty. I changed to neutral. Sven's answer is clear and simple, so here I stick with that.
5 hrs
Hi, I hear you but the term investment is not limited at all here to start-up, you'll see I pointed out to Dusty that it is an ongoing need. One doesn't only invest at the outset.//No problem, neutral is warranted as I should have been more precise:-)
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4 KudoZ points awarded for this answer. Comment: "Thanks."
+1
12 mins

Production processes that use a high ratio of capital to labor inputs.

Production processes that use a high ratio of capital to labor inputs.
Reference:

http://highered.mcgraw-hill.com/sites/0072471123/student_view0/chapter2/key_terms.html

Peer comment(s):
agree juvera : You are absolutely right, and as I wrote below, it is the opposite to labout intensive industries, where the high ratio of labour to capital input is the defining factor.
5 hrs
Thank you very much!
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