LABOR INTENSIVE PROJECT AND CAPITAL INTENSIVE PROJECT AND THEIR DIFFERENCES

LABOR INTENSIVE PROJECT AND CAPITAL INTENSIVE PROJECT

As we know that a project is a set of one-time set of activities. They are designed to create a unique product within the constraints of time, cost and quality. For detail knowledge about the meaning and definition of project please click the following link: https://managementknowledges.blogspot.com/2016/12/project.html. Among the various types of project on the basis of techniques of project, the projects are classified into two types. They are labor intensive project and capital intensive project. Let us understand both the terms very easily.

Labor intensive project :

Labor intensive projects are labor based projects where skilled , semi-skilled and unskilled labors are used as the human resource. 

According to F.H. Harvinson:

"Human resource refers to the process of acquiring and increasing the number of persons who have skills, education and experiences, which are critical for the economic and political development of a country "

Skilled labors: The people who are specialized in any sector are called skilled labors. They are regarded as an asset of particular place.
Semi-skilled labors: The people who are moderately specialized in any sector are called semi-skilled labors. These kind of labors needs more training programs and knowledge regarding the job.
Unskilled labors: The people who are not specialized in any sector are called unskilled labors. 

More number of skilled labors makes the projects well managed. So, in labor intensive projects, low technology is used in order to handle simple task. It uses comparatively large number of labor with low capital. This projects uses goods and services which are produced mostly through the use of labor.

The main objective of this kind of projects are to create maximum employment by making them involved.

Thus, labor intensive project generates income. It brings social equality and justice among the nation. Even the people having less capital can easily run these projects. These projects helps to stabilize the economic condition of the country through its operations.

Examples : Food for work in hills, Road Construction projects, Bridge construction projects and so on.

Capital intensive project  :

Capital intensive project are capital based projects. These projects uses high technology and less labor force in its operations. This types of projects are complex in nature. In order to run these kinds of projects, large capital and skilled work force are required.

Generally, these projects uses payback period, average rate of return, capital budgeting techniques for the evaluation of their investments in the project.

As the project is totally capital oriented, the resources are optimally utilized. This produces superior quality goods and services. These projects are suitable in those countries where there is shortage of labor and the work force is found to be complex .

Some of the examples of this projects are : CATHLAB project for heart, CT Scan project, software development projects and so on.

LABOR INTENSIVE PROJECT  Vs CAPITAL INTENSIVE PROJECT

In order to understand the concept more easily, i have made both the terms comparable. This comparative study will make your vision more clear regarding this topis. 

The basic differences between Labor Intensive Project and Capital Intensive Project are as follows:

1. Labor intensive projects are labor based. Whereas, capital intensive projects are capital based.
2. In labor intensive projects all kinds of labor can be used whether it be skilled, semi-skilled or unskilled. Whereas in capital intensive projects mostly skilled workers works.
3. Labor intensive projects uses low technology. Whereas, capital intensive projects uses high technology.
4. The tasks are simple in labor intensive projects. Whereas, in labor intensive projects the tasks are complex in nature.
5. Labor intensive projects increases employment opportunities in the country. Whereas, capital intensive projects decreases employment opportunities within the country.
6. Labor intensive projects are time consuming projects but capital intensive projects are time saving projects.
7. The operational costs are high in labor intensive projects as lots of labor with low technology are used under this projects. Whereas, in capital intensive projects the operational costs are reduced due to high production and skilled work force.
8. Labor intensive projects are found mostly in underdeveloped and developed countries. Whereas, capital intensive projects are found mostly in developed countries.
9. Some of the examples of labor intensive projects operating are : Food for work in hills, Road Construction projects, Bridge construction projects and so on. Similarly, Some of the examples of capital intensive projects operations are:  CATHLAB project for heart, CT Scan project, software development projects and so on.