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Concept
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Résumé
The economic concept of a capital good (also called complex product systems (CoPS), and means of production) is as a "...series of heterogeneous commodities, each having specific technical characteristics ..." in the form of a durable good that is used in the production of goods or services. Capital goods are a particular form of economic good and are tangible property.
A society acquires capital goods by saving wealth that can be invested in the means of production. People use them to produce other goods or services within a certain period. Machinery, tools, buildings, computers, or other kinds of equipment that are involved in the production of other things for sale are capital goods. The owners of the capital good can be individuals, households, corporations, or governments. Any material used to produce capital goods is also considered a capital good.
Capital goods are one of the three types of producer goods, the other two being land and labour. The three are also known collectively as "primary factors of production". This classification originated during the classical economics period and has remained the dominant method for classification.
Many definitions and descriptions of capital goods production have been proposed in the literature. Capital goods are generally considered one-of-a-kind, capital intensive products that consist of many components. They are often used as manufacturing systems or services themselves. Examples include hand tools, machine tools, data centers, oil rigs, semiconductor fabrication plants, and wind turbines. Their production is often organized in projects, with several parties cooperating in networks (Hicks et al. 2000; Hicks and McGovern 2009; Hobday 1998).
A capital good lifecycle typically consists of tendering, engineering and procurement, manufacturing, commissioning, maintenance, and (sometimes) decommissioning.
Capital goods are a major factor in the process of technical innovation.
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