Capital intensity

Capital intensity refers to the amount of capital invested in relation to the labor required to produce goods or services. In simpler terms, it measures how much machinery, equipment, and technology are used compared to the number of workers. Industries with high capital intensity, like manufacturing or energy production, rely more on machines and technology, while those with low capital intensity, like retail or services, depend more on human labor. Understanding capital intensity helps assess productivity, investment needs, and the overall efficiency of businesses within different sectors.