Short Answer 
Physical capital refers to tangible resources, such as infrastructure and machinery, that enhance a country’s economic efficiency and productivity. Developing physical capital involves building essential infrastructure, providing services like power and internet, and adopting innovative technologies. In contrast, human capital investment focuses on education and workforce improvement, which indirectly contributes to economic growth.
Step 1: Understanding Physical Capital
Physical capital includes tangible resources that improve a country’s economic efficiency. This encompasses infrastructure and machinery that enhance productivity and operational capability. Key components of physical capital are vital for supporting economic activities, which are necessary for a country’s growth.
Step 2: Methods for Developing Physical Capital
Countries can increase their physical capital through various strategies that improve infrastructure and technology. This can be achieved by:
- Building essential infrastructures such as highways, railways, and airports to facilitate transportation and trade.
- Providing essential services such as power and Internet connections to enhance connectivity and efficiency of businesses.
- Importing or developing innovative technologies to boost productivity and modernize existing resources.
Step 3: Distinction from Human Capital Investment
While investing in educational programs and nutrition can improve a workforce, they are considered human capital investments rather than physical capital. The distinction lies in their direct impact on economic operations. Unlike physical capital, which involves tangible assets, human capital focuses on enhancing the skills and health of the population, which indirectly supports economic growth.