As America prepares to spend the US$1.2 trillion infrastructure from the Infrastructure Investment Jobs Act (IIJA) in the next five years, what are the challenges to infrastructure investments regarding meeting the present and future needs?
Deloitte Insights published the Deloitte Center for Government Insights report titled, “The future of United States infrastructure – A survey of infrastructure trends,” which presents the survey result conducted in September 2021, interviewing 660 respondents from 18 countries.
Respondents consisted of government officials (40%), infrastructure executives, and a small sample from non-profits and academicians.
The most significant sample, 300, are from the United States and Canada, two countries from Europe, five countries from Asia and the Pacific, five from the Middle East and Africa, and four from Latin America.
Respondents were asked what they think infrastructure in the United States will look like in the future, and these are their answers.
Almost all of them said that the pandemic would leave a lasting impact on infrastructure. A third said that more people would continue working from home, and there would be greater use of telemedicine.
There will also be increased demands for multimodal and connected transportation, climate-friendly office infrastructure, remote schools, social equity in mass transit, and a larger residential unit to accommodate home offices.
Infrastructure will become more digital, eco-friendly, and increased focus on improving data security and protection against cybercrime.
Cyber-attacks can be dangerous and costly. Examples include the cyberattack on San Francisco’s MUNI light rail system in 2016 and the shutdown of the Colonial Pipeline in 2021.
A quarter of local government respondents say that their infrastructure is not adequately protected from cyber-attack, compared to federal government respondents. The lack of cybersecurity protection is due to budget constraints, especially in local governments.
Infrastructure experts believe that more investments in IoT, cloud products, and services will be made to reduce cyber threats and digital workplaces.
When respondents were asked what isn’t going to change in infrastructure, the overwhelming answer is the burdensome process of building them, which consists of going through complex regulations and associated court challenges that can increase costs and create long delays in the execution of infrastructure. Only 3% of respondents are optimistic that rules will be loosened to make it easier to carry out projects.
The survey revealed the biggest obstacle to infrastructure over the next three years.
Respondents say that talent shortage is the biggest obstacle to infrastructure projects than budget constraints or regulatory challenges.
When thinking of infrastructure talent, construction workers usually come to mind. But today’s infrastructure covers more elements such as renewables, internet services, data management centers, and data analytics which demands a more diverse range of expertise and skills.
The survey listed down obstacles to infrastructure over the next three years:
- On top of the list and which more than half of respondents answered is the shortage of talent and expertise (46%), followed by
- Data privacy and security risks (37%),
- Unclear implementation road map and ROI (35%),
- Budget constraints (34%),
- Availability of materials (33%),
- Increasing supply chain costs (33%),
- Difficulty coordinating across departments (31%),
- Lack of technological skills (26%),
- Complex procurement process (26%),
- Lack of citizen support (18%),
- Lack of political will (14%), and
- Investments are seen as helping the rich, not the poor (5%).
When it comes to the social impact of infrastructure projects, respondent expects that efforts to include equity and social impact assessments in all infrastructure projects will increase significantly with the passing of the Infrastructure and Investment Jobs Act (IIJA).
Tax credit for renewable initiatives like shifts to renewable energy, climate research, expansion of EV charging stations, and incorporation of environmental benefits metric into the selection and assessment of infrastructure projects will also significantly increase.
As climate incentives increase, state and local governments should learn to access them and integrate them into infrastructure project management.
As governments become more aware of climate change’s impacts, respondents expect that the federal government but less so for state and local governments will increasingly promote environmental justice.
The federal government and the White House have executed laws to ensure environmental justice and equitable economic opportunity are integrated into federal investments.
For instance, the “Justice 40” launched by the White House guarantees that at least 40% of the benefits from federal investments in climate and green energy goes to disadvantaged communities.
Technologies that will reshape infrastructure in the next three years
Respondents believe that AI/machine learning, Cloud computing, and Cybersecurity technologies will most impact infrastructure projects.
These technology choices highlight the shift from purely physical infrastructure to a hybrid of physical and digital. Infrastructure from power grids to roads will get “smarter.”
However, these shifts will mean that infrastructure will hold more personal data and become more vulnerable to cyberattacks.
Eight states have appointed chief privacy officers to strengthen cyber cybersecurity, privacy, and ethical use of data protocols.
In 2021, Georgia became the first state to appoint a chief cloud officer. However, as previously pointed the shortage of skilled talent is a challenge for governments to make the most of emerging technologies.
This skills shortage presents an opportunity to bolster more skills and expertise in digital technology.
The future for infrastructure is now.
The US is embarking on a new era of infrastructure. Infrastructure changes in 2022 and beyond will reflect these essential shifts:
- significant federal funding will also come with increased compliance,
- more remote work and the need for broadband access,
- inclusive accessibility and social equity of infrastructure,
- greater emphasis on environmental sustainability,
- physical infrastructures increase uptake of digital features and the need for cybersecurity measures, and
- a shift in commuting and travel will reshape mobility infrastructure.
As infrastructures evolve, every part of the society from all levels of governments, partners, and communities, will need to adjust.
Given the broader range of factors in infrastructure development and the increasing complexity of the social, environmental, and regulatory frameworks, infrastructure management professionals should allow increased lead time and additional resources when planning infrastructure projects.
Leave a Reply