Just like in real-life your Island can adapt to a number of possible “Economic Systems”. We have the “3rd World” Agricultural/Mining/Base Resource Economies, Developing Industrial, and more Modern “Service Based” Economies. Tropico 4 follows a similar idea. You can have an Economy based around Agriculture, Heavy Industry and/or Tourism. Some of these are more profitable than others, depending on your circumstances. However, with the Modern Times DLC you have access to a more “Service” based Economy (not forgetting Tourism, but that’s a different type of Service Provider). This short guide aims at showing how you can boost your existing Economy, slowly switching from Industry and Agriculture into what we would call a “Modern” Economy. There are still many benefits to holding on to your previous income sources, but these “Modern” options allow you to exploit your island further than before.
If you are looking for something different, why not check our short 10 Tip List, or our Guide to Industry?
Berets never go out of fashion.
Let us make something clear. While having access to Modern buildings is useful you should not expect an Economy running purely on offices, media structures and the “internet”. First of all, Modern Economy buildings are not that profitable. A factory selling cars (even with its buggy transport efficiency) is more profitable than a fully staffed office (in the long run). However, factories create pollution, and they take up space, and resources. An office has to pay out wages (description claims they do not, but I am skeptical of that claim) and has a small upkeep, but there are no additional out-standing costs. An office can also house a decent number of workers, so having plenty of offices on your island is not a bad idea (and you are not limited to the number of office types, you can have as many of them as you like). Let us talk briefly about each of the buildings that I consider “Modern”, and what role they can play out in your economy. Take note, most of these are only available through the Modern Times DLC, so if you do not have that your choices are far more limited.
Business Center - These are the “Offices” that I spoke of. Business Centers cost, without any traits or skills, 8,000 USD to build. They will initially allow only 10 employees, but with an upgrade you can have up to 20. This is a low Job Quality structure, but any uneducated workers can work here. By installing Water Coolers the Job Quality will increase greatly. Your Business Center has three modes of production. It may be a Mortgage, Life-Insurance or an Advertisement Company. Each one of these Modes has its strengths and usefulness. For example, if you have a lot of Modern Domestic buildings focused in one area then a Mortgage or Life-Insurance company can generate a lot of income. Advertisement Companies generate income based on Media buildings around them (Radio, Television, Newspapers). According to the building’s description you do not pay any wages to workers in Business Centers, and their wage is set to whatever your island’s average wage is (based on my own observation). Even when I look at the “Financial Sheet” a Life-Insurance Company on my island that was placed among many Residential buildings turned out a decent profit, even when its workers were paid 24 USD each. However, this profit (if memory serves right) turned out to be only around 200,000 USD over a course of maybe ten to twenty years (if we took out the associated wages the “profit” would be 280,000 USD). It’s a low profit option, but not a bad one, since you can have numerous office buildings stacked next to each other. As such, if you had, let us say, five Business Centers you could churn up, safely, 100,000 USD of profit each year (assuming your workers were fully skilled, and the Business Centers were in high profit areas). It’s your first step into a Modern Economy. You will need Power to keep them running, and while you might provide people with a lot of cheap jobs do not rely on Business Centers entirely.
Babel Tower - Imagine that instead of an ordinary Business Center you had something… ten times the size? Well, perhaps not that much bigger, but it can provide jobs for fifty people. According to the in-game description how much money this building generates depends on the number of workers, their skills *and* the money sum on your Swiss Account. However, this building does not increase your Swiss Bank Account, it provides money for the treasury. My personal use of the Babel Tower is to give a lot of Unemployed a lot of jobs quickly. There might be more profitable options but if you aim for a Modern Economy make some space for the Babel Tower.
Bank/National Bank - The National Bank is provided by the Modern Times DLC. Unlike the ordinary Bank the National Bank allows for tourists to use it without the need of the “Off-Shore accounts” mode being active. Instead your National Bank can activate Investment Banking, which generates income based on how many people in the area have wages of 20 USD and above. It might seem like a lot but during one of my playthroughts (on the highest difficulty Economy setting) I had a minimum wage of 20 USD, so the building was spitting out money faster than I could count it. Alright, it’s not *that* good, but since the National Bank can be used by Tourists at the same time it is a very useful addition to your Modern Economy.
Media Buildings – Every single Media Building can have a work Mode that generates a profit. Placed in a deep urban area such buildings will not only still increase the local liberty but also provide the money to cover their own expenses. Best case scenario? They do not only cover their expenses but also give you a profit, which is not hard, at all. As long as they are placed near urban centers they will make money, and if they are very close to each other you can then build Advertisement Companies near them as well.
Stock Exchange - Now, what is one of the key elements of any modern capitalist economy? Private Investments. The Stock Exchange allows for outside investors to build all manner of buildings on your island. As long as the building works as is expected (a factory gets its resources, power and/or clients) you will get monthly rent for that building. However, if a building is unable to function it will eventually go bankrupt (also, if a building fails to generate a profit it will also shut down). Certain problems appear with what Investors expect will make good money on your island. The Chinese will try to build structures producing cheap goods or materials. The problem with that? They are stealing your super valuable resources and selling them on their own, while giving your citizens very low wages. The Americans are very open to Service based buildings, too much in fact. During one playthrough the Americans built Night Club after Night Club on my island. All of them eventually went bust, but while they lasted I still got my money’s worth. They will also provide decent wages. Nothing too fancy, but on the level. The Middle East offers good money for your workers and (according to my own personal opinion) the most plausible investment suggestions. Thanks to them I had a number of high quality Residential buildings, and I even allowed them to build an Oil Well on my Island, since the rent offered was high.
The problem with the Stock Exchange is that all four Investors (let us not forget about the EU) might want your precious resources. On top of that you rarely have any control over the method of “extraction” of goods. As such, you could have three lumber camps of your own, carefully cutting down only adult trees, or a single Chinese Lumber Camp cutting down every single tree. You have to be very careful with the suggested Investments and try to focus only on those you know will work-out (such as Residential Buildings) and not ruin the quality of life for your people (low wages or crappy jobs).
Telecom HQ - The Telecom HQ is what you would call your Mobile Phone/Internet company. You can have only one, but if placed centrally in your main residential area it will have good coverage, especially if you expand its “reach” through upgrades. It can improve the quality of life as well as increase the profits of local entertainment buildings or generate its own money. The third option is profitable, more so than the Business Centers. Due to the high power consumption though, and need for College graduates, it has a higher upkeep than usual.
Let us hammer down the substantial weaknesses of planning a “Modern Economy”. All your Modern buildings need power. Without Power you cannot have Business Centers, the Babel Tower or the National Bank. As such in order to have a “Modern” economy you need to have a highly Indsutrial or Tourism centered economy in place already. Only through having a secure base can you then invest in these Modern buildings, and shift slowly from Factories to Offices. Your Offices will not provide that much income, unless they are placed strategically where they are needed. It has to be noted that during a disaster your Life-Insurance companies could face a crack, so make sure you have all possible counter-measures against natural disasters (a weather station with all possible upgrades covers that). In the case of Investors you may lose natural or non-renewable resources, while getting only petty money for what they are actually worth.
What are the strengths of a Modern Economy though? First substantial strength, stable income. Your Life-Insurance company will generate income based on local residents. If you build more residential buildings the higher its income. The only case when this income drops is when you decide to demolish local residents, or a disaster destroys the buildings, which can be quickly rebuilt anyway. Unlike all the other “Economies” on your island your Offices, Telecom HQ and even your National Bank will not fall under the influence of changing prices of goods or sudden drops in Tourist visits. You could call your Modern Economy a “Safety Net” for an economic crisis. Another important element is the synergy between your buildings. A highly concentrated urban area allows your Media buildings to make money, which also allows Business Centers to make money both off the Media buildings and your citizens. You have to plan your urban areas in such a way as to put as many people as possible in one area, stacked next to each other. Modern Apartment Blocks are the simplest solution for that, since they have high capacity, and good housing quality. Your Modern Economy does not need a solid infrastructure. You do not need roads leading everywhere (although it still helps your Industry).
If you observe your Income charts you will see, without a doubt, that your Offices and Media Buildings generate a steady increasing income, while your Industry, Tourism, Farming and Mining will vary, depending on your infrastructure, global prices and the availability of specific resources. The “General Overhead” is the statistic you are after. There is a problem, sadly, the General Overhead includes a lot of different statistics. When you end up studying your “balance” for the General Overhead you will normally see a loss. Why? Because anything that does not qualify as Agriculture, Mining, Logging, Industry or Tourism will fall under the General Overhead. So, all the costs for your army, power plants, service buildings (such as pubs, restaurants and casinos), police force and many, many more go under the “General Overhead”. You might observe that your Income for the General Overhead increases, but typically your General Overhead Costs will also increase. However, unlike all the other areas of your economy the General Overhead, especially if you expand your Business Centers, Telecom HQ and Media buildings, will not fluctuate as much, since there is no supply chain, per se, that would stop your offices from making money. The only exception I can think of is a major power failure.
I am sure you are aware of other Service and Business Structures, such as the National Art Gallery, the different Restaurants, Night Clubs and more. If you want to get rid of unwanted costs you would have to pay absolute attention to closing down any business venture that does not bring a profit eventually. Casinos are one such example. Even when you might have a total population of 1,000 Casinos will stand almost empty, making barely any money. On the other end of the spectrum I found that Pubs, Restaurants and Gourmet Restaurants are extremely popular with your citizens, and they will always bring about a profit.
A useful thing to remember is that when you increase the wages of your workers you should also, delicately, scale the costs of their room rental and all the other services. Why? Since you pay your people more they can spend more, and since their time is limited anyway you can increase the costs for their leisure, thus ensuring that the buildings that are most often visited earn even more money. Care should be taken however, since Tourist Prices are influenced by your citizen prices. Even though your people are richer, and capable of buying all manner of items does not mean that the Tourists will agree to pay much higher fees.
As your economy expands you will have to, at some point, sit back, observe your island and ask yourself the question, “What next?”. That is the time when you may decide to Modernise your Economy. Get rid of the old, build the new. Build Bio Farms, Bio Ranches and Modern Fisheries. Construct factories producing electronics over guns. Finally, you may decide to change your traditional residential areas to far more modern apartment blocks combined with offices and media buildings. This is a bold step for one simple reason, it will be extremely expensive. Every single upgrade will cost money, time and manpower. You may decide that there is no need to go in this direction, and you will focus on your Industry, Agriculture and Tourism, that is perfectly fine. What this Guide aimed to do is to offer you another option. One which is in its own way challenging.
While I said in the beginning that this method of expansion does not grant economic autonomy others have been trying to achieve it. In other words, using these buildings to abandon any need for Industry or Tourism, become fully self-sufficient. I did not try going that far, but if you succeed in this, Kudos to you!
