Physical Capital

Think about a factory. For real though...close your eyes and conjure the sight of a factory in your mind. Smokestacks, loading docks, maybe a railroad spur, machines all around, churning and chugging, doing whatever, big trucks and forklifts driving around.

All that stuff represents the physical capital of the manufacturer. In general terms, the phrase refers to the actual stuff a company needs to do what it does. So...the buildings everyone works in, the machinery that churns out the products, the means of transporting stuff from here to there. It also includes things like laptops and filing cabinets and coffee machines.

Physical capital is considered one of the Big Three factors of production, along with land and labor. (The basic economic theory names three factors of production...though other descriptions include four or even up to seven factors.)