Infrastructure requires governance, regulation and control. After all, these are big investments, with big impacts, made for the very long term. Consumers must remain protected; users must be served and kept safe; investors must be kept informed and there are already growing signals that the public is keen to see greater privacy protection in every sphere of their lives.
As the appointed watch-dog of consumer protection, regulators need to take notice. In fact, regulatory systems everywhere are now being challenged to adjust for the new reality, new technologies and new approaches.
The problem is that — far too often — governance takes on a life of its own; call it momentum, or drift, or inertia. It becomes governance for the sake of governance. The consensus being that more governance and more control leads to better outcomes for citizens and consumers. But does it?
In some cases, an increase in redundant governance has led to good projects and ideas being drowned out in an endless loop of process and regulation. More often than not, governance tends to be focused on delivering on cost expectations rather than the specific benefits that were envisioned at the strategic planning phase. As a result, we under-deliver on the outcomes that society needs.
One of the big challenges with regulation is that it is often designed to deal with historical challenges. It's retroactive. It's almost always a few steps behind, fighting the last war. So instead of helping to manage the risks of new technologies or new models and approaches, regulation tends to be more focused on ensuring the old risks are being mitigated.
It doesn’t need to be like this. Well thought-through regulatory systems can be one of the most powerful drivers of infrastructure innovation and development. Take, for example, the way in which the UK has used regulation to help incubate the market for renewables (offshore wind in particular), driving a dramatic increase in the proportion of low carbon energy generation in just a few years.
In the future, we expect governments, regulators and infrastructure players embrace governance — not simply as a way to control costs and manage risks, but rather as an opportunity to ensure projects and programs are properly scoped, delivered and managed to address society's need. And, when that need changes or objectives are not being met, that the regulation is agile and flexible enough to allow the correct changes to be made.
Over the coming year, we expect to see conventions related to regulation and control start to shift as regulators, governments and investors begin to take rapidly changing technologies into account and start focusing on creating governance for the sake of benefits, not just for the sake of governance.
This does not mean that regulation will start to recede or control will be loosened. Quite the opposite. In the coming year, expect regulators and governance bodies to take a much more central role — but with a view towards encouraging value (both in the way infrastructure is delivered and in the way it is governed). The speed of this could determine our future more than anything else.