When it comes down to determining the economic and social impact an industry has, it is often measured by the gross value it contributes, and the number of individuals that work in the relevant fields. Given the vastness of the steel industry, it is important to understand the economic and social impact it brings about.
By definition, the steel industry is a business that processes iron ore into steel. With the help of technological advancements, the steel industry has played a key role in the creation of modern economies – so much so that it is now hard to imagine our modern-day world without it. Having been around for nearly 4,000 years, the industry sets the base for all other industries. This means that many things cannot be established without it. With the ever-rising adoption of steel in several end-user industries and rising infrastructural activities, the steel market is estimated to reach approximately USD14.3 trillion by 2028.
Today, the modern-day era is highly dependent on bridges, rails, automobiles, and other steel products, making evident how a reliable source of steel is necessary for progress and development. Beyond supporting the modern lifestyle of societies, the steel industry is one of the most essential industries that aid in the development of smaller communities too.
Importance of the Steel Industry
Even though steel is not the most commonly used material in society, it remains the material of choice for many aspects and the widest of applications. From manufacturing and construction to transportation and other products, it keeps several sectors vital to the modern economy sustainable. It is thus clear to see the hold the steel industry has on the economy and society as a whole.
Besides employing thousands of individuals to work at facilities, the global steel industry has several other direct effects that lead to added value. For one, with the increase in economic competitiveness and the advent of new technologies that improve yield, the steel industry also creates opportunities for innovative solutions and development projects worldwide.
Take, for example, the improvements that have been made over the years to reduce the energy consumption in the steel manufacturing sector. The rise of initiatives like green steel and new technologies to mitigate current issues create more jobs and benefit other industries. This is crucial today as the global pandemic has caused contractions of the economy, including that of Indonesia. While governments continue to boost investments and create more jobs in other sectors, it is safe to say that fields like the steel manufacturing industry will always be in demand.
Impact of the Steel Industry
It is a known fact that industries are linked to each other. Similarly, the iron and steel industry generates output and jobs in hundreds of secondary industries, making it a dynamic part of any country’s economy. With the growing demand for steel products, the industry supports thousands of jobs and pays billions in wages and compensation – from firms leveraging on financial, advertising, personnel, legal and transportation services to those that only focus on steelmaking, it is the backbone of developed economies.
In Indonesia, steel consumption is expected to rise due to government infrastructure projects. As a matter of fact, in 2020 alone, it was expected to increase by 3.1%, with consumption reaching new heights in 2021. Since steel remains a necessity for economic development in the Indonesian archipelago, we can expect the positive economic and social influence the industry will have on the country. This is because, when indirect effects such as the mining sector’s involvement in steelmaking and the induced effects of workers from a mix of other industries spending their wages are factored into the equation, the impact of global steel production amounts to high sums.
Gunung Prisma Leading the Way
At Gunung Prisma, we understand that steel builds the future. Through the provision of holistic steel solutions and embarking on important projects with our clients, our involvement inevitably leads to a ripple effect in which other industries, sectors, and communities benefit from it.
“Despite the widespread uncertainty and risk-averse attitude that were a result of the pandemic, Gunung Prisma continued to embark on projects and strive together with our partners. Understanding that steel is a fundamental part of building a better environment and world, we focus on delivering the best materials to our customers to ensure positive economic and social impacts,” relays Liwa Supriyanti.
One of the many projects that Gunung Prisma was involved in that has had a positive economic and social impact is the Pangkalan Susu Power Plant located in Langkat, North Sumatra. Since the project was put into operation and completed, it has not only promoted local social development and facilitated rewarding economic benefits but has also alleviated the power shortage issues in North Sumatra.
“Through such projects that rely on steel solutions, the ways in which the steel industry promotes local economic and social development is clear to see,” states Liwa Supriyanti when asked about her thoughts about the global steel industry.