Infrastructure: An Investment that Delivers

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Central to the life and operation of any community is its infrastructure. From its roads and other transportation platforms to its sewers and waste treatment facilities, and from its telecommunications and power generation and distribution networks to its building stock, a community’s infrastructure not only defines its quality of life in the moment, but also its capacity to deliver improved life quality in the future.

According to the US Congressional Budget Office, federal, state, and local governments spent more than $400 billion on infrastructure in 2014. Yet the D+ rating given to collective nationwide infrastructure by the American Society of Civil Engineers in its 2017 Infrastructure Report Card illustrates the great opportunity for further investment and strategic improvement.


The value of infrastructure investment

Investment in infrastructure is the investment that provides the foundation for many other investments—and the strategy demands constant attention for at least three reasons. First, infrastructure is certain to degrade over time. Materials wear out or erode at the risk of life quality or even catastrophic failure. Second, in a technologically dynamic society, infrastructure reflects all that is possible for a brief time, at best. It is inevitably superseded by advances in technology and design, leaving a sometimes-heavy opportunity cost on the table. Third, conditions change, and, with them, the problems infrastructure is meant to solve. The electrification that transformed the continent in the first half of the 20th century is not the electrification needed to meet the demands and expectations of communities in the first half of the climate-worn 21st century.

The United States made massive infrastructure investments to support the arc of the Industrial Revolutions of the 19th and 20th centuries. It is now looking hard at what is required to support, harness, and advance the next phase of industrial and technological evolution, and doing so in an era that often feels at risk and strapped for cash as national debt, once negligible, heads for parity with GDP with nothing in sight to slow the growth.

It is imperative to think strategically, and that means first and foremost thinking hard about priorities, linkages, and returns on investment. Returns are especially important since they drive rational investment. But infrastructure is practically unique as a target of investment; there is little else that is so foundational to the general health and productivity of society, with perhaps the exceptions of education and science. Get infrastructure right and much will follow. So, it is even more important to look at both the direct and indirect returns of infrastructure investment.

Assessing such returns in the coming decades will require a focus on three key strategic infrastructure elements: integration, electrification, and communication.


Investment strategy for the future

The elements of infrastructure (and the industries that provide them) are notorious for fragmentation and silos—for disintegration. However, integrating or coupling sectors unlocks enormous capacities by enabling the leveraging of one element to support another, and perhaps many others. For example, the waste heat forever discarded from a cooling solution can instead be tapped to heat water, generate power, or be stored as future energy. And by reducing aggregate energy demand, the captured heat enables renewable energy sources to play a larger role in power supply and adds resilience to the electricity generation and distribution systems.

The impact can also reach seemingly distant sectors of urban infrastructure. The proper deployment of waste heat capture for energy savings and storage can also help enable buildings to supply the electrical power required for broader electrification—for example, in transportation sectors. And electrification that deploys clean energy sources displaces fuels that negatively impact both pollution and atmospheric carbon levels. Thus, linking strategic integration with electrification intensifies the impact of existing resources while cutting their negative impacts and costs.

But, the best overall leverage of integration within and between infrastructure systems cannot be achieved unless coordinated in real time to optimize resource allocation and deployment—when the major infrastructure systems can communicate with one another and enable real-time data-based decision making. Opportunities for enhanced performance abound in the minute-to-minute, hour-to-hour unfolding of interdependent in-the-field performance under real-time conditions. Seizing those opportunities requires first knowing about them, and then being empowered to act on them. Both require ongoing data collection and analysis and the near-instant communication of decisions. It requires that whole city infrastructure be “smart.”

The returns of integration, electrification, and communication are certain at the macro or analytic level. To drive certainty and reliability at the micro level—in direct application—will require a new energy economy, including a workforce with new skills and leadership with a new orientation toward collaboration. But the results would be significant; strategic investment in infrastructure will reduce waste, pollution, and carbon emissions, as well as enhance productivity, improve health, create wealth, and expand well-being. A new energy economy means a renewed job market and expanded opportunity. Wage improvements may enlarge aggregate demand and thereby renew and strengthen the overall economy.

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