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Disruption is coming: Think outside of the box

Disruption is coming: Think outside of the box

Infrastructure development can take decades to fully progress but the pace of technological change far surpasses its advancement.

James Stewart

Vice Chair, Head of Brexit and Industrial Strategy

KPMG in the UK


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Construction in the sunset

It's been 10 years since Apple launched the first iPhone. It's been 8 years since the UK government started talking about High Speed 2 (HS2) and Hinkley Point C. Since then, Apple has launched 11 new models of the iPhone and construction on HS2 and Hinkley Point C has barely started.

This is not to disparage the efforts of the UK government; nuclear power plants and high-speed rail systems take decades to fully develop. But it does clearly demonstrate that the pace of technological change far outstrips the pace of infrastructure development.

The implications for infrastructure planners and developers are massive. Indeed, the vast majority of assets that are currently under development around the world are based on the expectation that they will serve their purpose for decades to come. But will they still be needed in the next 10 to 20 years? Or will technological change have made them obsolete?

The reality is that, across almost every infrastructure sector, disruption is inevitable. Plummeting costs for wind and solar generation is already disrupting the energy sector. The introduction of telehealth and remote monitoring is shaking up the health sector. The development of automated vehicles will soon change the way we build roads, parking lots and even residential neighborhoods. The question is not whether or not disruption will occur but rather how fast and how dramatic the change will be.

So why do we continue to develop infrastructure to meet the needs of today without planning for the possibility of tomorrow? Why do we simply assume that the current technology set will remain static? If we know - beyond a shadow of a doubt - that disruption is coming, why do we insist on sticking our heads into the sand and pretending that it isn't coming?

It's easy to simply say that the future is unpredictable; that we do not know what tomorrow's consumers will need and want; or that we can't prepare for what we don't yet know. But uncertainty is not an excuse.

I believe that we can start developing infrastructure that will meet the needs of future generations. We just need to be willing to build more flexibility into our assumptions and our plans. We need to stop planning on the basis of a single future scenario and start looking at multiple planning scenarios. And then we need to test our business plans against them until we find the solution that will deliver the best result against the greatest number of likely scenarios.

In some cases, that will likely mean choosing the option that - in our current reality - may seem somewhat suboptimal but offers the greatest flexibility and opportunity in the future. It will likely mean investing slightly more today in order to maintain the value of our investments tomorrow. And it may mean taking some bets and possibly making some mistakes. But preparing for the future is possible.

When building a new transport corridor, for example, we should be thinking about what may replace present day technology in the future and how our plans can be adapted to accommodate a range of potential new technologies. This future feasibility may cost more up front but will save millions.

For instance, when designing and developing new high-speed train lines we should also be thinking about how we would use the same land and space to also accommodate a Hyperloop line or maybe a drone corridor. When developing a new hospital or community center, we should be thinking about how we could repurpose that asset into an elderly care facility or school. When building cycle paths, we should be considering what other modes of transport might also use that space and plan accordingly.

The bottom line is that technological change is coming - and it's coming faster than we think. We need to put more time into thinking about the possibilities and the opportunities. We need to be more flexible and we need to be think about all of the potential future scenarios. And, in some cases, we need to invest more today in order to make the right choices for tomorrow.

We can no longer ignore the coming disruption. It's time to think outside of the box.

The top three big ideas that might change our world

While it’s easy to get caught up in the hype of new technologies and blinded by big ideas, there are a number of new concepts that, while not yet fully ‘ready for prime time’, do point toward the potential for massive and fundamental disruption in the infrastructure sector. And, therefore, they are worth watching.

Here are the top three concepts that I’m personally following:

  1. Machine learning: Machine learning essentially allows computers to learn by themselves and, by doing so, enables massive amounts of data to be analyzed to uncover new insights. Machine learning is already being used in the medical field to sort through DNA and find new disease markers. It could also be used to analyze passenger data and uncover new efficiencies in metro systems, for example, or to discover new compounds to improve the strength and durability of building materials. When computers are let loose to learn on their own, how will we make sure they are learning the right things and acting ethically?
  2. Mobility as a service: Uber and Lyft are already demonstrating that there is a growing market for urban mobility solutions. However, once vehicles become fully automated, many expect the urban mobility market to really take off as people seek to get more value from their vehicle investments and ride-share programs start to invest into fleets of self- driving cars.This, in turn, should help reduce congestion on city streets and radically alter demand for urban parking lots. Will new ride-share and urban mobility services require regulation? Will they cannibalize current mass transit solutions? And who will ensure the safety of passengers, pedestrians and other road users?
  3. Data and analytics (D&A): D&A is already having a massive impact on the way infrastructure is designed, built and operated. Owners are using D&A to understand the optimal design and placement of new assets; construction companies are using D&A to reduce costs and improve safety; operators are leveraging D&A to monitor performance and extend lifespans. The more sophisticated analytics techniques are even being used to predict future outcomes and impacts. The challenge isn’t getting the insights from the data but rather acting on those insights in a way that improves the way infrastructure is delivered. Are infrastructure developers, owners and operators ready for data-driven predictive decision-making?

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