essay on infrastructure development

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• Published: 01 April 2019

Infrastructure for sustainable development

• Scott Thacker   ORCID: orcid.org/0000-0003-2683-484X 1 , 2 ,
• Daniel Adshead 2 ,
• Marianne Fay 3 ,
• Stéphane Hallegatte   ORCID: orcid.org/0000-0002-1781-4268 3 ,
• Mark Harvey 4 ,
• Hendrik Meller 5 ,
• Nicholas O’Regan 1 ,
• Julie Rozenberg 3 ,
• Graham Watkins 6 &
• Jim W. Hall 2  

Nature Sustainability volume  2 ,  pages 324–331 ( 2019 ) Cite this article

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• Civil engineering
• Developing world
• Sustainability

Infrastructure systems form the backbone of every society, providing essential services that include energy, water, waste management, transport and telecommunications. Infrastructure can also create harmful social and environmental impacts, increase vulnerability to natural disasters and leave an unsustainable burden of debt. Investment in infrastructure is at an all-time high globally, thus an ever-increasing number of decisions are being made now that will lock-in patterns of development for future generations. Although for the most part these investments are motivated by the desire to increase economic productivity and employment, we find that infrastructure either directly or indirectly influences the attainment of all of the Sustainable Development Goals (SDGs), including 72% of the targets. We categorize the positive and negative effects of infrastructure and the interdependencies between infrastructure sectors. To ensure that the right infrastructure is built, policymakers need to establish long-term visions for sustainable national infrastructure systems, informed by the SDGs, and develop adaptable plans that can demonstrably deliver their vision.

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Acknowledgements

We appreciate the contributions of the Infrastructure Transitions Research Consortium, which is funded by the Engineering and Physical Sciences Research Council by grants EP/101344X/1 and EP/N017064/1. S.T. thanks the United Nations Office for Project Services, specifically R. Jones, G. Morgan, S. Crosskey and T. Sway for providing useful suggestions that improved this manuscript.

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Scott Thacker & Nicholas O’Regan

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World Bank, Washington, DC, USA

Marianne Fay, Stéphane Hallegatte & Julie Rozenberg

Department for International Development (DFID), London, UK

Mark Harvey

German Agency for International Cooperation (GIZ), Bonn, Germany

Hendrik Meller

Inter-American Development Bank (IADB), Washington, DC, USA

Graham Watkins

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S.T. designed the study. D.A., S.T. and J.W.H. performed most of the analyses. J.W.H., S.T. and D.A. wrote most of the manuscript. All authors contributed to the development of the manuscript through methodological advice, analysis, comments and edits to the text and figures.

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Thacker, S., Adshead, D., Fay, M. et al. Infrastructure for sustainable development. Nat Sustain 2 , 324–331 (2019). https://doi.org/10.1038/s41893-019-0256-8

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Why Infrastructure Matters: Rotten Roads, Bum Economy

Subscribe to the brookings metro update, robert puentes robert puentes nonresident senior fellow - brookings metro @rpuentes.

January 20, 2015

• 12 min read

Cities, states and metropolitan areas throughout America face an unprecedented economic, demographic, fiscal and environmental challenges that make it imperative for the public and private sectors to rethink the way they do business. These new forces are incredibly diverse, but they share an underlying need for modern, efficient and reliable infrastructure.

Concrete, steel and fiber-optic cable are the essential building blocks of the economy. Infrastructure enables trade, powers businesses, connects workers to their jobs, creates opportunities for struggling communities and protects the nation from an increasingly unpredictable natural environment. From private investment in telecommunication systems, broadband networks, freight railroads, energy projects and pipelines, to publicly spending on transportation, water, buildings and parks, infrastructure is the backbone of a healthy economy.

It also supports workers, providing millions of jobs each year in building and maintenance. A Brookings Institution analysis Bureau of Labor Statistics data reveals that 14 million people have jobs in fields directly related to infrastructure. From locomotive engineers and electrical power line installers, to truck drivers and airline pilots, to construction laborers and meter readers, infrastructure jobs account for nearly 11 percent of the nation’s workforce, offering employment opportunities that have low barriers of entry and are projected to grow over the next decade.

Important national goals also depend on it. The economy needs reliable infrastructure to connect supply chains and efficiently move goods and services across borders. Infrastructure connects households across metropolitan areas to higher quality opportunities for employment, healthcare and education. Clean energy and public transit can reduce greenhouse gases. This same economic logic applies to broadband networks, water systems and energy production and distribution.

Big demographic and cultural changes, such as the aging and diversification of our society, shrinking households and domestic migration, underscore the need for new transportation and telecommunications to connect people and communities. The percentage of licensed drivers among the young is the lowest in three decades, as more of them use public transit and many others use new services for sharing cars and bikes. The prototypical family of the suburban era, a married couple with school-age children, now represents only 20 percent of households, down from over 40 percent in 1970. Some 55 percent of millennials say living close to public transportation is important to them, according to a recent survey by the Urban Land Institute.

Yet unlike Western Europe and parts of Asia, the United States still has a growing population. We’ve added 25 million people in the past 10 years. This tremendous growth, concentrated in the 50 largest metropolitan areas, will place new demands on already overtaxed infrastructure. Metropolitan areas must be ready to adapt not only to serve millions of new customers but also to help poorer residents, many of whom are jobless, have the best chance possible to find work.

A recent Brookings analysis found that only a quarter of jobs in low-skill and middle-skill industries can be reached within 90 minutes by a typical metropolitan commuter. Successful cities will be those that connect workers to jobs and close the digital divide between high-income and low-income neighborhoods. The White House notes that broadband speeds have doubled since 2009 and that more than four out of five people now have high-speed wireless broadband, adoption rates for low-income and minority households remains low (about 43 and 56 percent, respectively.)

Our economy is changing as fast as our society. Over 83 percent of world economic growth in the next five years is expected to occur outside the United States, and because of rapid globalization, it will be concentrated in cities. This offers an unprecedented opportunity for American businesses to export more goods and services and to create high-quality jobs at home. It also amplifies the importance of our seaports, air hubs, freight rail, border crossings and truck routes, which move $51 billion worth of goods quickly and efficiently each day in the complex supply chains of the modern economy.

The diverse energy boom also disrupts our infrastructure. Natural gas needs new truck, pipeline and rail networks. Rooftop solar panels have rattled electric utilities, which are scrambling to find ways to incorporate and store the energy they produce while keeping the grid operating. At the same time, finding the money to pay for the development of a smart electricity grid and for clean energy presents challenges, as hundreds of thousands of small and large projects are projected to come online in coming decades.

High-profile natural disasters, such as Hurricane Sandy, drew attention to problems with water infrastructure. Overwhelmed waste water systems, washed-out roads, shorted electrical circuitry and flooded train stations not only highlighted the economy’s reliance on these networks, but also revealed their poor condition. The nation’s water systems are now being rebuilt. Cities are working to capture storm and rain water rather than building costly pipes to sluice it away. The Center for an Urban Future recently described how New York City plans to spend $2.4 billion over 18 years in so-called “green” infrastructure such as rooftop vegetation, porous pavements, and soils to soak up rain.

Over and above the new types of needed infrastructure is a big change in how projects are financed.

Despite the importance of infrastructure, the U.S. has not spent enough for decades to maintain and improve it. It accounts for about 2.5 percent of the economy, compared to about 3.9 percent spent in Canada, Australia and South Korea, 5 percent for Europe and 9-12 percent in China. The McKinsey Global Institute estimates that the U.S. must spend at least $150 billion more a year on infrastructure through 2020 to meet its needs. This would add about 1.5 percent to annual economic growth and create at least 1.8 million jobs.

Split between Republicans and Democrats, the federal government appears incapable of doing this. For the foreseeable future, the Highway Trust Fund, the State Revolving Funds for water and others will face cuts and squeezed budgets. Other experiments, such as a National Infrastructure Bank, seem prohibitively complex in the current political environment. And of course, rising interest costs on federal debt, increases in entitlement spending and declining traditional revenue sources such as the gasoline tax mean that competition for limited resources is fiercer than ever.

Some cities and states are enjoying budget surpluses because property and sales tax revenues. But most localities will take years to build back their reserves, repay additional debt incurred during the recession and pay for deferred maintenance on infrastructure. Unfunded pension obligations and other debts facing all levels of government mean there just aren’t the public funds to pay for necessary infrastructure. And though interest rates remain at historically low levels, the ability of many governments to borrow from capital markets is hindered by debt caps and weak credit ratings.

Despite gradual acceptance in the past decade that infrastructure is vital to economic growth, debate of spending remains an amorphous and simplistic. Infrastructure is made up of interrelated sectors as diverse as a water treatment plant is from an airport, a wind farm, a gas line or a broadband network. The focus on infrastructure in the abstract led to unrealistic silver-bullet policy solutions that fail to capture the unique and economically critical attributes of each. In reality, each infrastructure sector involves fundamentally different design frameworks and market attributes. And they are owned, regulated, governed and operated by different public and private entities.

The federal role should not be exaggerated. American infrastructure in selected, built, maintained, operates and paid for in a diverse and fragmentary fashion. For certain sectors, such as transportation and water, federal spending is relatively high, averaging $92.15 billion each year from 2000 to 2007. But even there, according to the Congressional Budget Office, Washington’s share of spending never topped 27 percent. For other sectors, such as freight rail, telecommunications, and clean energy, the federal role is more limited.

So what does all this mean and how are we going to pay for what we need?

Roads, bridges and transit must be paid for largely from public funds. Ballot measures have been important for fund raising, particularly at the local level, because general obligation bonds require popular approval. That’s how regions and municipalities pay for public transit systems, bridges, road construction, water and sewer improvements and a host of other infrastructure projects. Many cities are following this trend. Those places, especially in Westerns cities such as Los Angeles, Phoenix and Salt Lake City, are taxing themselves, dedicating substantial local money and effectively contributing to the construction of the nation’s infrastructure.

Metropolitan transportation initiatives are popular among voters. According to the Center for Transportation Excellence, 71 percent of measures were passed in 2014 as were 73 percent in 2013. While state level ballot measures on infrastructure spending are far less common, in 2013, eight states voted to raise taxes for such projects. This includes both conservative strongholds such as Wyoming and Democrat-controlled legislatures in states such as Maryland.

A number of cities are using market mechanisms that capture the increased value in land that accrues from infrastructure. This provides a more targeted way to finance new or existing transportation projects by matching the benefit from infrastructure with its cost. These techniques include impact fees where land developers are assessed a charge to support associated public infrastructure improvements, generally local roads and public works like sidewalks. The lease or sale of air rights is another practice that has been used by to finance development around transit stations for decades, famously around Grand Central Station in New York, and more recently in Boston and Dallas.

Another growing trend is the use of tax increment financing districts. These TIFs support infrastructure projects by borrowing against the future stream of additional tax revenue the project is expected to generate. Examples include a TIF used to pay for improvements at the Atlantic Station project in Atlanta and Portland, Ore.,’s similar strategy to fund its streetcar by creating a local improvement district that leveraged the economic gains of nearby property owners.

For its part, the federal government can allow greater flexibility for states and cities to innovate on projects that connect metros. Passenger Facility Charges used to fund airport modernization are artificially capped at $4.50 and do not begin to cover the airport’s operating and long-term investment costs. Busy airports could be freed to meet congestion and investment costs by removing the caps. Archaic restrictions on interstate highways tolls could also be lifted. Metropolitan and local leaders, with the states, are in the best position to determine which segments of road could best raise revenue.

Other infrastructures could be public-private partnerships. These often complex agreements allow the public sector to bring in private enterprises to take an active role during the life of the infrastructure asset. At their heart, these partnerships share risk and costs of design, construction, maintenance, financing and operations.

The public-sector interest in partnerships is propelled by the shortage of money. Ever since the recession, many states and local governments have been plagued by high debt, low credit ratings and limited options to borrow. PPPs are not “free money,” but they can offer benefits such as better and faster completion of the project, more budgetary accountability and overall savings.

Partnerships with the private sector are not appropriate for all infrastructure sectors or projects. Some may not be profitable enough to attract investors. Green infrastructure or public parks, for example, may lack a revenue stream. Private conservancies maintain and oversee parks in New York, Pittsburgh, Houston and St. Louis, but they are all nonprofit organizations set up solely for that purpose and do not help spread risk.

The best infrastructure projects for private sector involvement are those with a clear revenue stream from rate-payers, such as water infrastructure and toll roads. The private sector can bring in new technologies for metering and billing that can improve services. Thoughtful procurement can also facilitate projects that do not include ratepayers. Nearly any project can be suitable for a private partnership as long as there is a mechanism to spread risk among all parties, even without user fees. So-called availability payment models allow the public sector to pay a recurring user fee for the use of an asset based on its condition and accessibility. These payments are a form of debt since but require continuous public expenditure and a binding budgetary obligation.

It would help spur public-private partnerships if there were standard contracts and pricing, risk sharing and returns. In the past, Washington has set these kinds of standards for such vast areas of the consumer market as housing and small business. But the federal government appears unlikely to do so for infrastructure investment. A mix of public, private and civic bodies will have to do so instead.

An emerging example is the West Coast Infrastructure Exchange, a collaboration between California, Oregon, Washington and British Columbia standardizing transparency, contracts, labor and risk allocation. The goal is to build a market for projects. By sharing details, project finance and delivery methods can be scaled and replicated.

If successful, the WCX could be a model for other state, city and metro infrastructure exchanges. Each exchange could focus on the infrastructure delivery and finance strategies suited to the culture, traditions and needs of the region it serves. An East Coast or Mid-Atlantic Exchange could focus on rebuilding coastlines and climate resiliency after Hurricane Sandy, or on transportation projects that cross state borders. A Midwestern Exchange might focus on water infrastructure in a largely slow growth environment or on projects with Canada. A Southern Exchange might facilitate new infrastructure to accommodate fast growth and new manufacturing, supply chains and movement of goods. Regardless of their focus, exchanges could be linked through a project clearinghouse to share data, information and best practices.

Energy, telecommunications and freight rail will remain dominated by the private sector typically with federal and state regulatory oversight. But there will also be new types of public and private relationships in these sectors, too. For example, while broadband networks are still delivered by private companies, local governments recognize that this kind of network access is equally important to the future economic success of households as well as businesses. So as cities such as Los Angeles explore ways to extend broadband to all homes, they also are working to figure out the financing arrangements and business opportunities for firms interested in developing those networks.

The trade and logistics industry is highly decentralized, with private operators owning almost all trucks and rails, and the public sector owning roads, airports, and waterway rights. Unlike such countries as Germany, Canada and Australia, the U.S. does not have a unified strategy that aligns disparate owners and interests around national economic objectives. Innovative partnerships are therefore necessary to make freight movements in and around big cities more efficient and reliable. The CREATE program in Chicago aligns several such interests in a citywide effort to relieve freight and passenger bottlenecks that cause delays. The $2.5 billion for the program will come from a mix of traditional sources (federal grants), private investments (railroads), state loans (bonds) and existing local sources.

It is clear that projects are becoming more complex. There is not one-size-fits-all form of financing for them. It very much depends on the place, time and particulars of each project. The level of private engagement will depend on market and business opportunities.

In many respects, America’s ability to realize its competitive potential depends on making smart infrastructure choices. These must respond to economic, demographic, fiscal, and environmental changes if they are to help people, places and firms thrive and prosper.

This commentary was originally published by the Washington Examiner .

Infrastructure

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April 15, 2024

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Infrastructure Development: The Cornerstone of Economic Growth | Essay Writing for UPSC by Vikash Ranjan Sir | Triumph ias

Table of Contents

Infrastructure Development: The Pillar of Economic Growth

(relevant for essay writing for upsc civil services examination).

Infrastructure development is often considered the backbone of economic growth. But how exactly does it contribute to a nation’s prosperity? Let’s delve into the integral relationship between infrastructure and economic development.

Jobs, Productivity, and Investment

From constructing roads to laying down telecom lines, infrastructure projects create jobs and boost productivity. These projects also attract investment, becoming a magnet for business growth.

Beyond Economics: Social Progress

Infrastructure is not just about economics; it’s about social progress. By improving access to services and reducing inequality, infrastructure fosters a more inclusive society.

Building a Sustainable Future

In the era of climate change, sustainable infrastructure is essential. By considering environmental impacts and building resilience, infrastructure sets the stage for long-term economic stability.

Conclusion: The Way Forward

Infrastructure development is economic development. By weaving together growth, inclusivity, and sustainability, it crafts the blueprint for a nation’s progress.

To master these intricacies and fare well in the Sociology Optional Syllabus , aspiring sociologists might benefit from guidance by the Best Sociology Optional Teacher and participation in the Best Sociology Optional Coaching . These avenues provide comprehensive assistance, ensuring a solid understanding of sociology’s diverse methodologies and techniques

Infrastructure Development, Economic Growth, Job Creation, Productivity, Investment, Accessibility, Inequality Reduction, Sustainability, Resilience, Economic Development.

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• Religion in modern society: religion and science, secularization, religious revivalism, fundamentalism.
• Family, household, marriage.
• Types and forms of family.
• Lineage and descent.
• Patriarchy and sexual division of labour.
• Contemporary trends.
• Sociological theories of social change.
• Development and dependency.
• Agents of social change.
• Education and social change.
• Science, technology and social change.

INDIAN SOCIETY: STRUCTURE AND CHANGE

Introducing indian society.

• Indology (GS. Ghurye).
• Structural functionalism (M N Srinivas).
• Marxist sociology (A R Desai).
• Social background of Indian nationalism.
• Modernization of Indian tradition.
• Protests and movements during the colonial period.
• Social reforms.

SOCIAL STRUCTURE

• The idea of Indian village and village studies.
• Agrarian social structure – evolution of land tenure system, land reforms.
• Perspectives on the study of caste systems: GS Ghurye, M N Srinivas, Louis Dumont, Andre Beteille.
• Features of caste system.
• Untouchability – forms and perspectives.
• Definitional problems.
• Geographical spread.
• Colonial policies and tribes.
• Issues of integration and autonomy.
• Social Classes in India:
• Agrarian class structure.
• Industrial class structure.
• Middle classes in India.
• Lineage and descent in India.
• Types of kinship systems.
• Family and marriage in India.
• Household dimensions of the family.
• Patriarchy, entitlements and sexual division of labour
• Religious communities in India.
• Problems of religious minorities.

SOCIAL CHANGES IN INDIA

• Idea of development planning and mixed economy
• Constitution, law and social change.
• Programmes of rural development, Community Development Programme, cooperatives,poverty alleviation schemes
• Green revolution and social change.
• Changing modes of production in Indian agriculture.
• Problems of rural labour, bondage, migration.

3. Industrialization and Urbanisation in India:

• Evolution of modern industry in India.
• Growth of urban settlements in India.
• Working class: structure, growth, class mobilization.
• Informal sector, child labour
• Slums and deprivation in urban areas.

4. Politics and Society:

• Nation, democracy and citizenship.
• Political parties, pressure groups , social and political elite
• Regionalism and decentralization of power.
• Secularization

5. Social Movements in Modern India:

• Peasants and farmers movements.
• Women’s movement.
• Backward classes & Dalit movement.
• Environmental movements.
• Ethnicity and Identity movements.

6. Population Dynamics:

• Population size, growth, composition and distribution
• Components of population growth: birth, death, migration.
• Population policy and family planning.
• Emerging issues: ageing, sex ratios, child and infant mortality, reproductive health.

7. Challenges of Social Transformation:

• Crisis of development: displacement, environmental problems and sustainability
• Poverty, deprivation and inequalities.
• Violence against women.
• Caste conflicts.
• Ethnic conflicts, communalism, religious revivalism.
• Illiteracy and disparities in education.

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Infrastructure development in India: a systematic review

• Original Paper
• Published: 14 October 2023
• Volume 16 , article number  35 , ( 2023 )

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• A. Indira   ORCID: orcid.org/0000-0003-1189-5922 1 &
• N. Chandrasekaran   ORCID: orcid.org/0000-0002-0076-2019 2  

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It is now well-accepted that infrastructure development is essential for the growth of any economy. Successive governments in India, both at the Union and State level have given a thrust towards increased budgetary spending on infrastructure to help economic growth. On the eve of the 75th year of independence, there is a reiteration for long-term initiatives, including focused programs for roads, railways, airports, waterways, mass transport, ports, and logistics to further boost infrastructure spending. Keeping this in mind, the authors sought to systematically review the literature on how infrastructure development has unfolded in India between the years 2000–2022. The study shows that with diverse economic growth in India, there is interest in infrastructure development aligned with public interests. Infrastructure development is contextual and location-specific. Access to infrastructure positively impacts social and economic outcomes. There is however growing concern for sustainable development with rapid urbanization.

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Source  Handbook of Statistics on Indian Economy, 2021–22, Table 93

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Indira, A., Chandrasekaran, N. Infrastructure development in India: a systematic review. Lett Spat Resour Sci 16 , 35 (2023). https://doi.org/10.1007/s12076-023-00357-5

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The critical role of infrastructure for the Sustainable Development Goals

The critical role of infrastructure for the Sustainable Development Goals is an essay written by The Economist Intelligence Unit and supported by UNOPS, the UN organisation with a core mandate for infrastructure. The research uses three pillars—the economy, the environment and wider society—as well as the overarching theme of resilience through which to assess the role of infrastructure in meeting global social and environmental goals.

• Marianne Fay, chief economist for climate change, World Bank
• Jim Hall, director and professor of climate and environmental risks, Environmental Change Institute, University of Oxford
• Mark Harvey, head of profession (infrastructure), UK Department for International Development
• Morgan Landy, senior director of global infrastructure and natural resources, International Finance Corporation
• Virginie Marchal, senior policy analyst, Environment Directorate, OECD
• Jo da Silva, founder and director, International Development, Arup
• Graham Watkins, principal environmental specialist, Inter-American Development Bank

Introduction

From the water we drink to the way we travel to work or school, infrastructure touches every aspect of human life. It has the power to shape the natural environment—for good or for ill. As the world’s population expands, urbanisation accelerates and emerging middle classes in developing countries demand more services, the need for infrastructure is rising rapidly. Meanwhile, increasingly severe weather events and rising sea levels pose direct threats to infrastructure assets and the critical services these provide, with lack of precise knowledge about future climate change making long-term planning increasingly difficult.

So how can we address these challenges? Many argue that the answer lies in new approaches to sustainable infrastructure development. The New Climate Economy’s Sustainable Infrastructure Imperative sees investing in sustainable infrastructure as “key to tackling the three central challenges facing the global community: reigniting growth, delivering on the Sustainable Development Goals, and reducing climate risk in line with the Paris Agreement.” 3

Indeed, the Paris Agreement, the 2030 Agenda for Sustainable Development—which supports the Sustainable Developments Goals (SDGs) developed by UN member states—the New Urban Agenda and the Sendai Framework for Disaster Risk Reduction all require investments that deliver climate-resilient infrastructure that supports sustainable development.

Among the SDGs, SDG 9 explicitly refers to building resilient infrastructure. However, all the goals are underpinned by infrastructure development. “Infrastructure is really at the centre of the delivery of the SDGs,” says Virginie Marchal, senior policy analyst in the OECD’s Environment Directorate. She cites inequality as a key example. “How can you make sure that by building the right type of infrastructure you not only have a positive impact on the environment and meet climate goals but you also contribute to reducing inequality within societies?”

Achieving SDG 10—reduced inequalities—means meeting a number of the other SDGs. For example, SDG 6—availability and sustainable management of water and sanitation for all—demands investments in infrastructure of at least US$114bn a year, according to the World Bank. 4 When it comes to meeting SDG 7—access to affordable, reliable, sustainable and modern energy for all—investments needed include US$52bn per year to achieve universal electrification by 2030, only half of which is covered by planned investments. 5 And by helping empower women and girls, infrastructure contributes to meeting the objectives of SDG 5.

But what do we mean by “sustainable infrastructure”? First, while they offer solutions to sustainable development, infrastructure assets can have negative impacts. For example, infrastructure is responsible for more than 60% of global greenhouse gas (GHG) emissions. 6 The construction of large infrastructure assets, such as dams and railways, can disrupt and displace communities.

Sustainable infrastructure therefore needs to be planned, designed, delivered, managed and decommissioned to minimise its negative impacts and maximise its positive impacts. Meanwhile, infrastructure assets—throughout their entire lifecycle—should have positive impacts on the economy, society and the environment.

In this essay, Chapter 1 discusses the benefits of infrastructure, Chapter 2 examines the barriers to delivering sustainable infrastructure, and Chapter 3 highlights solutions and best practices.

The dividends

Delivering economic gains.

Investments in infrastructure will be instrumental in meeting the SDGs. By creating jobs and economic activity, infrastructure enables development. It also provides the services that underpin the ability of people to be economically productive, for example via transport. “The transport sector has a huge role in connecting populations to where the work is,” says Ms Marchal.

Infrastructure investments help stem economic losses arising from problems such as power outages or traffic congestion. The World Bank estimates that in Sub-Saharan Africa closing the infrastructure quantity and quality gap relative to the world’s best performers could raise GDP growth per head by 2.6% points per year. 7

In the US, it is estimated that about 63m full-time jobs in industries such as tourism, retail, agriculture and manufacturing depend on the quality, safety and reliability of transport infrastructure. 8 And McKinsey Global Institute analysis suggests that increasing infrastructure investment by 1% of GDP could create major new job opportunities across the world (see chart 1). 9

The failure of infrastructure is also a useful indicator of its economic value. For example, in 2013, when the Dawlish sea wall in south-west England was destroyed during storms, the repairs to the wall itself cost £35m, but the loss of a critical transport connection to the south west of England was estimated to cost the UK economy £1.2bn. 10

Infrastructure itself can also become more economically productive. The McKinsey Global Institute estimates that increasing the productivity of infrastructure can cut spending needs by 40%. Steps it recommends include optimising portfolios to avoid investing in projects that fail to meet needs or deliver sufficient benefits, streamlining processes, and implementing measures that increase the performance of existing assets. 11

Protecting the natural environment

From renewable energy to transport systems, the environmental benefits of infrastructure are manifold. For example, in the US, estimates are that if someone commuting 20 miles a day switches from driving to public transportation, it would lower their carbon footprint by 4,800 pounds annually. 12 Sustainable infrastructure assets can help to address climate and natural disasters, reduce greenhouse gas emissions and contamination, manage natural capital, and enhance resource efficiency. “The infrastructure built in the next five years will determine how we meet the Paris climate goals,” says Ms Marchal. “It’s a threat but also a huge opportunity for countries to leapfrog to infrastructure that is fit for climate.”

Professor Hall cites transportation as a tool in fossil-fuel reduction. “The transport sector needs to be largely electrified,” he says. “Whether you bank on electric vehicles or invest in mass transport in urban areas, it’s fundamental.”

Technology will facilitate significant environmental gains. In power infrastructure, for example, smart meters allow energy utilities to manage consumption patterns, creating price incentives to use electricity outside peak times, enabling them to reduce reliance on the more polluting “peaker plants” that supplement supply at peak demand times and that usually generate power using fossil fuels. 13

Integrating green infrastructure such as trees, plantings and forests into the portfolio of assets can improve air quality and contribute to removing carbon dioxide from the atmosphere or, in the case of mangroves, increasing flood protection and preventing soil erosion. Green roofs act as giant sponges, soaking up stormwater before it pollutes rivers and lakes, assist with flood control and, collectively, can reduce temperatures in cities during the summer. For example, one simulation study found that covering half of the available surfaces in downtown Toronto with green roofs would cool the city by up to 2˚C in some areas. 14

However, Professor Hall argues that efforts to increase investments in green infrastructure should not eclipse work to ensure that traditional infrastructure is sustainable. This includes addressing the emissions created by constructing and operating infrastructure. Erecting and running buildings, for example, consumes 36% of the world’s energy and produces some 40% of energy-related carbon emissions, according to estimates by the International Energy Agency, a research group. Meanwhile, while regulations are being introduced in many countries to reduce the environmental impact of construction, emissions generated by existing infrastructure must also be managed. In the developed world, for example, only about one in 100 buildings is replaced by a new one every year. 15

“If we focus only on green infrastructure, we lose sight of the amount that’s being spent on grey infrastructure and the potential for locking in patterns of development that may or may not be sustainable,” Professor Hall says.

Underpinning social progress

From schools, hospitals and roads to power and water networks, sustainable infrastructure enables governments and the private sector to provide services that contribute to sustainable individual livelihoods, as well as broader economic growth, while improving quality of life and enhancing human dignity. As part of this, ensuring equitable access to these services is critical, an aspiration enshrined in many of the SDGs, which call for basic services such as health, education, shelter, water and sanitation to be available to all.

When it comes to gender equality, infrastructure plays an important role, both protecting women and accelerating their advancement. For example, public transport systems both enable women to enter the workforce but also, when well designed, provides them with safety and security and ensures that they have equal access to opportunities and services.

Sanitation infrastructure is also crucial in ensuring equal participation in economic and education opportunities. If safe toilets or private hygiene facilities in schools or workplaces are unavailable, during menstruation women and girls are often forced to stay at home or leave school or their jobs altogether. The World Bank estimates that at least 500m women and girls globally lack adequate facilities for menstrual hygiene management. 16

This can also be harmful to women and girls. “Maternal mortality rates are affected by the quality of water and hygiene. And it tends to be the girls who don’t go to school because they have to go and fetch water,” says Ms Fay. “Services do have these differential impacts on gender.”

Infrastructure is a tool in increasing social mobility. For example, introducing solar power to Sudan and Tanzania in schools enabled an increase in completion rates at primary and secondary schools from less than 50% to almost 100%. 17

Morgan Landy, senior director of global infrastructure and natural resources at the International Finance Corporation (IFC), argues that infrastructure’s social impact is rising up the agenda. “If you are going to have a wind power project you need to bring a community lens to that to make sure the benefits are shared,” he says. “That’s the future. The environmental side will always be strong, but the next frontier will be social impact.”

The role of resilience

Infrastructure that can withstand the shocks and stresses experienced over its lifetime provides resilience and protects development by having a positive impact across all three pillars of sustainability.

Resilient infrastructure protects the economy by reducing disruptions to industry from shocks, such as severe storms. Similarly, when resilient infrastructure ensures the continuity of critical services such as power and water during a crisis, it offers greater stability to communities and reduced disruption to their livelihoods. “During hurricanes in the Caribbean, you lose particular bridges,” says Graham Watkins, principal environmental specialist in the climate change division of the Inter-America Development Bank (IDB). “So if you strengthen those bridges that are critical, you can maintain conduits and people suffer less.”

If infrastructure has to be less frequently rebuilt or repaired, governments not only save money—they also need to use fewer natural resources. Moreover, using green infrastructure to protect against climate-related floods and intense storms helps communities adapt to the effects of climate change. Examples range from street plantings, parks and green roofs in cities to wetlands and mangrove forests, which protect coastal communities from storm surge and sea-level rise.

Japan is well recognised for its ability to build highly resilient infrastructure that can withstand frequent or severe earthquakes. This includes the construction by many towns and cities of new energy infrastructure based on micro-grids—groups of interconnected and distributed energy resources that act as single, controllable entities—and decentralised power sources. Supporting such developments is the country’s National Resilience Programme, established in the wake of the 2011 earthquake and tsunami. 18

However, Ms da Silva stresses that resilient infrastructure goes beyond the assets explicitly designed for the protection and mitigation of disasters to all systems that support society—such as energy, transport and water—and how they connect with each other.

“When you look at the definition of critical infrastructure, it is critical if, when it fails, it has a severe detrimental effect on human wellbeing and economic development,” says Ms da Silva, who leads the Resilience Shift, an initiative supported by the Lloyds Register Foundation to raise awareness of the need for infrastructure to be resilient and develop new approaches that will drive changes to current practice.

“Given the complexity of modern infrastructure and the pressures on infrastructure systems due to increasing demand, ageing and/or climate change, failure is a possibility,” she says. “So infrastructure has to be resilient or it’s going to have a severe effect on society.”

The Challenges

Growing demand.

As the world’s population expands, delivering basic services will become increasingly challenging. And as more and more people live in cities, pressures on urban infrastructure are becoming intense. By one estimate, infrastructure investment of up to US$3.2trn-US$3.7trn per year is needed between now and 2030. 19 Infrastructure investment gaps are already an issue in many emerging and developing markets, totalling US$452bn over 2014-20, with actual spending of an estimated US$259bn dwarfed by requirements of US$711bn (see chart 2).

The G20-backed Global Infrastructure (GI) Hub estimates that investments of US$94trn in infrastructure will be needed by 2040. More than half of these investment needs are in Asia, according to GI Hub. At US$28trn, representing 30% of global infrastructure investment needs, China will have the greatest demand over this period.

Some of the gaps look daunting. Take water and sanitation infrastructure. In 2015 some 844m people lacked even a basic drinking-water service, according to the World Health Organisation, and at least 2bn people were using drinking water sources contaminated with faeces. 10

Meanwhile, if current spending trends continue, the US—where an estimated US$3.8trn needs to be invested in infrastructure 21 —is forecast to have the world’s biggest spending gap to 2040, according to the GI Hub. 22 This imposes a high price on Americans, with one estimate that the cost to the average motorist of poor road infrastructure is US$599 annually, or US$130bn nationally in repair costs, accelerated vehicle deterioration and depreciation, increased maintenance, and additional fuel consumption. 23

The increasing risks and vulnerabilities brought about by climate change will also increase pressure to upgrade infrastructure and repair or replace assets damaged during extreme weather. For example, tens of billions of dollars of damage to infrastructure in New York and New Jersey was caused by Hurricane Sandy in 2012, prompting the creation of the Hurricane Sandy Rebuilding Task Force. 24

Funding and resource gaps

Given the rate at which governments need to build infrastructure, many will struggle to secure the financing to meet demand. Tight public-sector budgets, particularly in developing countries, mean governments will need to tap into some of the trillions of dollars in global capital markets.

Yet the many risks to infrastructure investments, from complex permitting and potential construction delays to the large amount of time before assets generate cash flow and produce a return on investment, deter private investors. Of the more than US$120trn in assets under management by banks and institutional investors globally, infrastructure makes up only about 5%. 25

Moreover, for assets that deliver public good, it is often hard to find a business model that would generate the kinds of financial returns private investors seek. “In some cases, it’s easy to leverage private-sector funding,” says Ms Marchal. “With power plants, you have the regular flow that makes it financially sustainable, but water is much more difficult to monetise.”

Meanwhile, countries often lack human resources with the required skills to plan, deliver and manage sustainable, resilient infrastructure at the scale required to meet demand, particularly in developing countries, where the lion’s share of the world’s infrastructure gaps exist.

“There just aren’t enough engineers, town planners and technical specialists in many of the countries that are aiming to fill their infrastructure gaps,” says Mark Harvey, head of profession (infrastructure) at the UK’s Department for International Development (DFID). “So capacity is money but it also means having technical expertise and staff to manage projects, finance and procurement.”

He argues that much of the skills development needs to take place in government. “We still have around 85% of infrastructure globally funded through public resources and there’s not as much attention paid to building that capacity as there should be,” he says. 26

In many cases it is weak governance that exacerbates the shortage of skills, with the codes and regulations that are needed to shape hiring and training decisions lacking.

Questions of governance

A number of governance hurdles exist to the development of sustainable infrastructure, including the short-termism in policy development created by election cycles, lack of appropriate legislation, codes and standards, and lack of capacity.

Given the sums of money involved, lack of transparency and corruption often accompany the development of infrastructure assets. And even if outright graft is not involved, infrastructure can be shaped by the motives of those developing it. “Politicians are fond of vanity projects,” says Professor Hall. “Infrastructure provides big opportunities for rent-seeking, and the number of white elephants and grossly over-budget or underperforming infrastructure projects around the world is disturbing.”

For governments, there can also be competing priorities. Developing countries may put rapid economic growth ahead of environmental and social protection. Linking the different elements of sustainable development is harder because of the silos that exist within government and between those executing different stages of infrastructure, from planning and delivery to operation and maintenance. “Institutions are set up with their own vertical silos, and crossing those is not so easy,” says Mr Landy.

Even within infrastructure sectors, silos exist. “Within the water sector, for instance, you have a whole raft of different people and institutions, some private some public, responsible for different aspects of water,” says Ms da Silva. “You’ll have an environmental agency worrying about flood risk and a water company worrying about potable water.”

Often infrastructure investments meet single goals, rather than taking into account all stakeholders in society and the environment. For example, infrastructure focused on mitigating climate change, such as large hydro power plants or wind turbines, may meet resistance from indigenous groups or other local communities fearing disruption or loss of their land. “Even if you have some aspects of sustainability, you’re tripping over other ones,” says the IDB’s Mr Watkins. “Unless you take the whole integrated package, it’s going to slow your delivery.”

The Way Forward

From new forms of finance to the use of digital technologies, new approaches to sustainable infrastructure are emerging. Equally important are efforts to move away from treating infrastructure projects as individual investments and to view them as part of a system that comprises a portfolio of interlinked assets that provide essential services for society. “We talk about bridges and roads when we should be talking about mobility, connectivity and ensuring the flow of goods, services and people,” says Ms da Silva.

Harnessing innovative finance

While public-sector budgets may be insufficient to finance the infrastructure governments need to build, some are finding new ways to tap into the global capital markets and encourage more private-sector investment in the sector. For example, using concessional climate finance from sources such as the Green Climate Fund and the Climate Investment Funds, it is possible for governments to assume a first loss position, reducing risk for private investors. 27

The growing interest in impact investing (investments that generate both financial and social and environmental returns) and use of ESG (environmental, social and governance) considerations to prioritise investments could also unleash new streams of funding for infrastructure. This growing enthusiasm is reflected in the gradual rise of the green bond market in recent years (see chart 3).

Because impact investors—from individuals to institutions—are often prepared to invest with longer time horizons or accept lower than market-rate returns for increased impact, they could play a particularly important part in financing sustainable infrastructure.

Policymakers can pave the way for these kinds of investments. For example, in the US the NY Green Bank was set up in 2014 by the State of New York to increase capital flows into the clean energy market. The bank has developed the expertise to identify clean energy projects and, since many involve untested business models or emerging technologies, to assess their risk, making it easier to attract investors to these projects.

However, some argue that accessing more capital is not the only answer to sustainable infrastructure, particularly in developing countries. “We tend to focus on finding more financing to be able to spend more as opposed to being able to spend better,” says the World Bank’s Ms Fay. She argues that it is more cost-effective to improve planning and procurement. “In many cases, countries could get more out of the financing they do have,” she says.

Countries can also tap into existing legislation to increase private-sector investment in sustainable infrastructure. Washington, DC, for example, has regulations that require developers in certain districts to incorporate into their developments green infrastructure (such as parks, grass roofs and plantings), which soaks up untreated stormwater, preventing it from polluting rivers and other waterways. 28

If installing green infrastructure is not feasible, developers can purchase stormwater retention credits from those that have invested in green infrastructure in areas not covered by the regulations. 29 The project not only demonstrates the effectiveness of green infrastructure in reducing the harmful effects of severe storms. It also offers an innovative financing mechanism to accelerate the investment into these green systems.

Tropical Landscapes Finance Facility, Indonesia

Financing sustainable infrastructure often requires cross-sector collaboration. This is the case in Indonesia, where a financing facility is bringing together a number of global public- and private-sector stakeholders to foster investments in renewable energy and improved management of forests, biodiversity and ecosystem restoration services throughout the country.

The Tropical Landscapes Finance Facility (TLFF) was launched in October 2016 by the Indonesian government and is a partnership between UN Environment, the World Agroforestry Centre, ADM Capital and BNP Paribas.

With two sources of capital—a lending platform run by ADM Capital and BNP Paribas and a grant fund run by UN Environment and the World Agroforestry Centre—the TLFF provides technical assistance and co-funds early stage development costs enabling donors and foundations to harness private-sector funding. 30

Filling the project pipeline

In many countries, the biggest challenge to infrastructure development is in the pipeline of viable projects. “One of the problems with sustainable infrastructure is that there are just not enough bankable projects in the market, especially in the poorest countries,” says Mr Landy.

The problem is felt in different ways. First, the ability to develop a pipeline of viable projects—a strategic set of projects that governments plan, prioritise and implement—is often lacking. Countries need to build “upstream planning”, which enables them to identify the projects that will most help them to meet their development targets. And inability to do this makes it hard to create a pipeline of projects and encourage private-sector investors to participate.

To address the pipeline problem, the UK Infrastructure Transitions Research Consortium (ITRC), a consortium of seven leading UK universities, led from the University of Oxford, is working to support infrastructure planning in the US, Australia and the Netherlands. The ITRC has created a process for developing long-term strategies for national infrastructure that includes a modelling platform and database called NISMOD (the National Infrastructure Systems Model) that will enable academia, industry and policymakers to access infrastructure datasets, simulation and modelling results. 31 A similar tool, NISMOD-Int, will be applicable in developing countries. 32

Second, the project lifecycle—from feasibility studies to design, delivery and operation—is hampered by lack of capacity. As part of World Bank Group’s efforts to address this gap, it has established a US$150m global infrastructure project development fund called InfraVentures, designed to ensure more projects become a reality.

However, filling the project pipeline usually requires more than funding. This is something InfraVentures takes into account, explains Mr Landy. He cites its work as a co-developer of the Nachtigal Hydropower project in Cameroon, supporting the country’s goal to extend access to electricity to 88% of the population by 2022. 33 “We put on a venture capital hat,” he says. “We also spent 2,000 hours of IFC environmental specialist time looking at the project to make sure it was being designed to meet our standards, and that we were baking into the design things we want to see as an investor.”

Global Infrastructure Project Pipeline

To help governments attract private-sector funding for their infrastructure projects, the G20’s Global Infrastructure (GI) Hub has created a free digital platform providing details of government infrastructure projects across the world.

Launched in 2016, the Global Infrastructure Project Pipeline platform allows potential investors to search for projects at different stages, from the initial government announcement and feasibility studies to projects that are in the final stages of construction or already in operation.

The idea behind the platform is to give private-sector investors detailed information on potential projects and enable them to track the projects as they move from design to operation. By providing free access to this information, the GI Hub aims to make it easier for investors to evaluate investment opportunities in public infrastructure across a wide range of jurisdictions and markets. 34

Blending green and grey

Great potential is seen in green infrastructure, which can both mitigate the effects of climate change and help society to adapt to climate change through the restoration of wetlands and floodplains or the installation of grass roofs, rain gardens, parks and street plantings in cities.

Green infrastructure can often lower the cost of infrastructure development compared with traditional grey infrastructure. For example, research conducted on the cost-savings associated with the green infrastructure investments of Lancaster, a city in south central Pennsylvania in the US, found that the green infrastructure plan would deliver an estimated US$120m in savings over 25 years compared with grey infrastructure. 35

Natural infrastructure can also be combined with traditional grey infrastructure. For example, in south-western Pennsylvania, frequent rainfall and ageing sewer infrastructure are degrading waterways and posing threats to human health. Rather than expensive expansion of the underground pipes and tanks that convey wastewater to sewage treatment facilities, it is deploying green infrastructure approaches—from permeable paving to bioswales (vegetation and layers of gravel and soil that slow stormwater movement and filter pollutants) to manage stormwater where it falls. 36

In New York, a plan called BIG U developed by the Bjarke Ingels Group in the wake of Hurricane Sandy is designed to protect the city from flooding by creating a series of levees, a floodwall and a park that would not only help protect the island from inundation but would also provide a new green space for residents. 37

And in San Francisco, as the Public Utilities Commission upgrades its sewer system over the next 20 years, it will use infrastructure that is both green (natural management tools that reduce stormwater impacts and beautify neighbourhoods) and grey (upgrades to pipes and treatment plants for reliability, resiliency and regulatory compliance).

Making infrastructure smart

In the move to create sustainable infrastructure, building information modelling (BIM), sensors, big data and machine learning will be increasingly important tools, improving the planning of new assets and the retrofitting of existing ones, increasing infrastructure’s operational efficiency and reducing its environmental impact. Smart infrastructure—which combines physical with digital infrastructure—improves the quality, speed and accuracy of decision-making while generating cost savings.

For example, 3D visualisation and BIM software enable planners to consider different design alternatives and take into account the impact of conditions, such as local climate, before starting construction. Meanwhile, advances in virtual and augmented reality as well as computer simulations and BIM are enabling engineers and architects to visualise designs at an early stage to model their resilience to climate shocks and measure their impact on the environment. 38

“Systems of digital modelling enable you to plan and design infrastructure assets before they get built, and you can then monitor how that infrastructure performs and behaves when it is used,” says DFID’s Mr Harvey. “Big data can tell us how people are behaving in relation to that infrastructure. And when you put these together, that’s powerful for improving performance, value for money and sustainability.”

Technology can also increase the environmental sustainability of existing assets while cutting costs associated with maintenance. This is the aim of Singapore’s WaterWiSe system. Using a combination of hardware and software, the system monitors in real time the city’s water distribution network. Sensors track indicators, such as pressure, flow rate, pH levels, turbidity and dissolved organic matter. The system enables quicker detection of leaks or burst pipes and facilitates long-term planning for maintenance and system expansion. 39

Smart technologies not only get more out of key assets—they make infrastructure a more appealing investment opportunity. According to the University of Cambridge’s Centre for Smart Infrastructure & Construction, smart infrastructure is worth up to £4.8trn globally. 40

Smart sustainable infrastructure does not necessarily require sophisticated technologies, but can also be the result of smart planning. In some cases, creative thinking can avoid substantial costs. For example, to cope with rapid growth of the Brazilian city of Curitiba, planners had originally called for the construction of a subway system. Instead, the city pioneered the development of bus rapid transit (BRT) systems, where buses run along dedicated routes not used by other vehicles, avoiding the high cost of building a subway network. 41

Improving transparency

Given the traditionally poor transparency in the infrastructure sector and the opportunities it offers for corrupt practices, international attention has focused on increasing visibility into how funds spent on infrastructure are distributed. “Corruption is the biggest obstacle to sustainable development,” Neill Stansbury, director of the Global Infrastructure Anti-Corruption Centre, told delegates at the recent Global Engineering Congress in London. “The infrastructure sector and engineering are probably one of the biggest areas where corruption takes place internationally because of the amount of money which is spent on it.” 42

A number of initiatives are emerging to tackle the problem. For example, in 2012 CoST—the Infrastructure Transparency Initiative, also known as the Construction Sector Transparency—was launched with the support of the World Bank to encourage the disclosure, validation and interpretation of data from infrastructure projects. Working with governments, industry and civil society, CoST promotes reforms that can reduce mismanagement, inefficiency and corruption in building projects. 43

“Transparency and open procurement [are] critical if governments are to persuade the private sector to invest in infrastructure,” says the OECD’s Ms Marchal. “You need to provide ongoing monitoring and reviewing of the efficiency of public-private partnerships in the process and to implement safeguards to avoid corruption.”

Professor Hall points to Nigeria as an example of good practice. “The Infrastructure Concession Regulatory Commission has made all the contracts for public-private partnership concessions publicly available,” he says. “That serves the purpose of transparency, but it also helps competition because concessionaires are aware of the prices that their successful competitors are bidding.”

In some cases, capacity-building initiatives can also increase transparency. For example, the Africa Infrastructure Development Association (AfIDA)—part of the Africa Finance Corporation (a development finance institution)—was set up to foster increased project development activities in Africa. The AfIDA does this is by creating standardised project development template documents, fostering knowledge-sharing between members, and setting ethical and professional standards—measures that also serve to increase transparency. 44

Similarly, the International Infrastructure Support System, an online tool developed by the Sustainable Infrastructure Foundation and the Asian Development Bank gives countries templates on which to prepare projects, and enables project teams to work together online—but it also has features that enable the sharing of information with investors and the public. 45

Managing infrastructure

Increased climate uncertainties, growing demand and tightening finances all demand a more flexible, adaptive approach to infrastructure development than has been seen in the past. “People are increasingly focusing on how different kinds of infrastructure interrelate to create systems of infrastructure,” says Mr Landy.

He sees much of the progress on this front taking place in cities. “Thoughtful mayors are working across those boundaries and pushing their systems to connect the dots,” he highlights.

A systems approach also means looking at infrastructure from more than one angle. For example, with their extremely high temperatures, cement plants can be used as incinerators if municipalities locate waste-management facilities near them. Fibre optic cables can be run along rail lines. Lampposts equipped with sensors and motion detectors can monitor and manage traffic and pollution and save energy by illuminating only when a vehicle or pedestrian approaches.

This systems approach demands strong institutions, the breaking down of silos need and the de-linking of planning from political cycles. Part of this means putting in place long-term strategies, such as the Investing in Canada infrastructure plan, the objectives of which are to create long-term economic growth, to support a low-carbon, green economy and to build inclusive communities. 46

Others have established dedicated infrastructure departments designed to work across political cycles. In Australia, the latest incarnation of such a dedicated department is called Department of Infrastructure, Regional Development and Cities (founded in 2017). And in 2015, the UK launched an independent National Infrastructure Commission (see case study). 47 “If we could begin to replicate that sort of thinking in some of the countries where we work, that would be no bad thing,” says DFID’s Mr Harvey.

“Infrastructure involves resource allocation and decisions about building things in people’s backyards, so you can’t depoliticise it,” argues Professor Hall. “But these are more technocratic bodies that also have a mandate to look for the long term and to bridge different political administrations so you don’t get the stop-start of projects whenever there’s a change of government.”

Establishing an integrated cross-sector planning process and a long-term national plan has another advantage: increasing market confidence, making it easier to attract private-sector financing and supporting the creation of a project pipeline of viable and bankable projects.

Future-proofing infrastructure

Recognising the importance of infrastructure and adopting a systems approach is what will underpin the resilience not only of infrastructure itself but also of society and the planet. “One side of the sustainable development agenda is linked to one planet-living and finite resources,” says Ms da Silva. “The other side is about resilience. But over the past decade, we’ve become more aware of how complex and interconnected the world is, how much uncertainty is out there, whether it’s climate change or economic downturns like 2018, and how we’re all interconnected. We cannot predict the future, but the ability for critical infrastructure to continue to function and provide essential services for society whatever happens is what matters.”

First, because infrastructure assets may need to be in place for decades, it is critical to “future-proof” those assets. This can be done by anticipating changes in climate, use patterns and growth in demand over their lifecycle as well as by building in flexibility and the potential to add capacity over time.

London’s Thames Estuary 2100 strategy, to manage tidal flood risk in the Thames estuary over the next 100 years is one example of infrastructure design that uses an adaptive capacity approach to not only current risks but also future climate adaptation. Milestones and reviews are scheduled at defined points, along with a plan for how to enhance capacity of not only a specific flood barrier but also of the wider system over the next century. 48

Ms da Silva argues that this approach—looking at resilience within and between critical infrastructure sectors—has yet to become widespread. Developing resilience, she says, means not only thinking about how to deliver services but also how to prevent collapse. “It’s a mind shift and one of the fundamental shifts is to contemplate failure,” she says. “Resilience engineering is about ensuring that assets can continue to function even if all sorts of things happen. It’s designing for the ordinary and then thinking about the extraordinary.”

The UK’s National Infrastructure Commission

Countries often struggle to disentangle infrastructure plans from other national and private-sector interests and implement plans beyond election cycles. Launched in 2015, the National Infrastructure Commission is designed to address such challenges. “It’s still set up through political and democratic processes, but its intention is to get the politics out of long-term infrastructure investment,” explains Mark Harvey, head of profession (infrastructure) at the UK’s Department for International Development.

The commission provides the government with impartial expert advice on major long-term infrastructure challenges. It assesses the UK’s national infrastructure assets and needs, and the technologies that may change over time. At the start of each five-year parliament, it produces a report with recommendations for infrastructure project priorities. 49

Seen individually, sustainable infrastructure assets perform an essential role in providing people with the services they need, improving quality of life and protecting the environment. Some of this is delivered through construction of new infrastructure. However, creative ways can be found of making current systems more efficient—through smart meters, for example—without the need for disruptive and resource-intensive new construction.

Ensuring that infrastructure is sustainable also means approaching it not as a series of assets but as a system. For example, cities that are well equipped with public transport systems increase social mobility and equality, making it easier for people to go to school, work and access healthcare services. Shifting energy sources from coal-fired power generation to renewables not only cuts greenhouse gases but also reduces air pollution, improving health.

A systems approach to infrastructure can also deliver cost savings or avoid unnecessary expenditure, such as the construction of highways to borders with countries where trade agreements have yet to be secured or micro-grid solutions have yet to be developed in rural areas where people cannot afford to purchase electricity. Smart investments in public transit systems can reduce the need to build more roads, as is the case in Curitiba’s BRT systems.

Treating infrastructure as an interlinked portfolio of assets also enables more to be done to build resilience into the system. For instance, this can involve combining green and grey infrastructure while creating assets, such as parks, that not only contribute to clean air and stormwater retention but also provide public amenities that improve quality of life, as is the case in Washington, DC, where the stormwater retention programme fosters the development of parks that can be used for recreation.

The need to build resilient and sustainable infrastructure is urgent. Climate change is already disrupting life on the planet, something that is unlikely to change even if the world manages to achieve its climate goals. In the face of increasing risks to communities and their environments, resilient infrastructure will play a key role in shoring up energy and water systems and ensuring that communities can survive shocks and recover from them more quickly. In doing so, infrastructure is not just a means of delivering services; it is a critical enabler and guardian of sustainable development.

• 1 McKinsey Global Institute, Bridging global infrastructure gaps, June 2016,  https://www.un.org/pga/71/wp-content/uploads/sites/40/2017/06/Bridging-Global-Infrastructure-Gaps-Full-report-June-2016.pdf
• 2 Center for Climate and Energy Solutions, Reducing Your Transportation Footprint,  https://www.c2es.org/content/reducing-your-transportation-footprint/
• 3 The New Climate Economy, The Sustainable Infrastructure Imperative, 2016,  https://newclimateeconomy.report/2016/
• 4 World Bank, The Costs of Meeting the 2030 Sustainable Development Goal Targets on Drinking Water, Sanitation, and Hygiene: Summary Report, January 2016,  https://openknowledge.worldbank.org/bitstream/handle/10986/23681/K8632.pdf?sequence=4
• 5 UNDP, Financing Solutions for Sustainable Development, Goal 7: Affordable and clean energy,  http://www.undp.org/content/sdfinance/en/home/sdg/goal-7–affordable-and-clean-energy.html
• 6 World Economic Forum, Could infrastructure investment help tackle climate change?, February 2016,  https://www.weforum.org/agenda/2016/02/could-infrastructure-investment-help-tackle-climate-change/
• 7 World Bank, Why We Need to Close the Infrastructure Gap in Sub-Saharan Africa, April 2017,  http://www.worldbank.org/en/region/afr/publication/why-we-need-to-close-the-infrastructure-gap-in-sub-saharan-africa
• 8 TRIP,Bumpy Roads Ahead: America’s Roughest Rides and Strategies to Make Our Roads Smoother, 2016,  http://www.tripnet.org/docs/Urban_Roads_TRIP_Report_October_2018.pdf
• 9 McKinsey Global Institute, Infrastructure productivity: How to save $1 trillion a year, January 2013,  https://www.mckinsey.com/~/media/mckinsey/industries/capital%20projects%20and%20infrastructure/our%20insights/infrastructure%20productivity/mgi%20infrastructure_executive%20summary_jan%202013.ashx
• 10 The Resilience Shift, Critical Infrastructure Resilience Understanding the landscape, July 2018,  https://www.resilienceshift.org/wp-content/uploads/2018/10/Critical-infrastructure-resilience_RevA_Final_011018.pdf
• 11 McKinsey Global Institute, Infrastructure productivity: How to save $1 trillion a year, January 2013,  http://www.mckinsey.com/insights/engineering_construction/infrastructure_productivity
• 12 Center for Climate and Energy Solutions, Reducing Your Transportation Footprint,  https://www.c2es.org/content/reducing-your-transportation-footprint/
• 13 Longe O M et al, “Time programmable smart devices for peak demand reduction of smart homes in a microgrid”, conference paper, March 2015,  https://www.researchgate.net/publication/283101576_Time_programmable_smart_devices_for_peak_demand_reduction_of_smart_homes_in_a_microgrid
• 14 Pompeii II, W C, Assessing urban heat island mitigation using green roofs: A hardware scale modeling approach, Shippensburg University thesis, May 2010,  https://www.ship.edu/globalassets/geo-ess/pompeii_thesis_100419.pdf
• 15 “Home truths about climate change”, Economist ,January 3rd 2019 
• 16 “Menstrual Hygiene Management Enables Women and Girls to Reach Their Full Potential”, World Bank, May 25th 2018,  https://www.worldbank.org/en/news/feature/2018/05/25/menstrual-hygiene-management
• 17 UNDESA, Electricity and education: The benefits, barriers, and recommendations for achieving the electrification of primary and secondary schools, December 2014,  https://sustainabledevelopment.un.org/content/documents/1608Electricity%20and%20Education.pdf
• 18 “The Resilience Programme: Changing Japan’s grid”, Power Technology, February 19th 2018,  https://www.power-technology.com/features/resilience-programme-changing-japans-grid/
• 19 World Bank, “Infrastructure Investment Demands in Emerging Markets and Developing Economies”, September 2015,  http://documents.worldbank.org/curated/en/141021468190774181/pdf/WPS7414.pdf
• 20 WHO, Drinking-water, fact sheet, February 2018,  https://www.who.int/en/news-room/fact-sheets/detail/drinking-water
• 21 The United States, GI Hub:  https://outlook.gihub.org/countries/United%20States
• 22 “Infrastructure demand: A major global challenge”, GI Hub blog,  https://www.gihub.org/blog/global-infrastructure-demands/
• 23 TRIP, Bumpy Roads Ahead: America’s Roughest Rides and Strategies to Make Our Roads Smoother, October 2018,  http://www.tripnet.org/docs/Urban_Roads_TRIP_Report_October_2018.pdf
• 24 Hurricane Sandy Rebuilding Task Force, Hurricane Sandy Rebuilding Strategy, August 2013,  https://www.hud.gov/sites/documents/HSREBUILDINGSTRATEGY.PDF
• 25 “Could infrastructure investment help tackle climate change?” World Economic Forum, February 2016,  https://www.weforum.org/agenda/2016/02/could-infrastructure-investment-help-tackle-climate-change/
• 26 In developing countries the figure is 80-85%. See G20, “The G20 agenda on infrastructure financing – key concerns and actionable recommendations”, July 11th 2018,  https://civil-20.org/c20/wp-content/uploads/2018/07/C20-policy-paper_infrastructure-financing_.pdf.
• 27 Meltzer, J, Blending climate funds to finance low-carbon, climate-resilient infrastructure, Brookings, June 2018,  https://www.brookings.edu/research/blending-climate-funds-to-finance-low-carbon-climate-resilient-infrastructure/
• 28 CD Department of Energy & Environment, Stormwater Retention Credit Trading Program,  https://doee.dc.gov/src
• 29 Ibid. 
• 30 TLFF,  http://tlffindonesia.org/about-us/
• 31 ITRC, NISMOD,  https://www.itrc.org.uk/nismod/
• 32 ITRC, NISMOD-International,  https://www.itrc.org.uk/nismod/nismod-international/
• 33 “Cameroon: World Bank Group Helps Boost Hydropower Capacity”, World Bank, July 19th 2018,  https://www.worldbank.org/en/news/press-release/2018/07/19/cameroon-world-bank-group-helps-boost-hydropower-capacity
• 34 GI Hub News, December 6th 2016,  https://www.gihub.org/news/gi-hub-launches-project-pipeline/
• 35 Environmental Defense Fund. Unlocking Private Capital to Finance Sustainable Infrastructure, 2017,  http://business.edf.org/files/2017/09/EDF_Unlocking-Private-Capital-to-Finance-Sustainable-Infrastructure_FINAL.pdf
• 36 Washburn, M, Green infrastructure report status, University of Pittsburgh, March 2015,  https://www.iop.pitt.edu/sites/default/files/Reports/Status_Reports/Status%20Report%20-%20Green%20Infrastructure%20-%20March%202015.pdf
• 37 Rebuild By Design, The BIG U,  http://www.rebuildbydesign.org/our-work/all-proposals/winning-projects/big-u
• 38 Arup, Virtual and Augmented Reality changing the way we design and build infrastructure,  https://www.arup.com/perspectives/virtual-and-augmented-reality-changing-the-way-we-design-and-build-infrastructure
• “From algorithms to virtual reality, innovations help reduce disaster risks and climate impacts”, World Bank blog, August 5th 2017,  http://blogs.worldbank.org/sustainablecities/algorithms-virtual-reality-innovations-help-reduce-disaster-risks-and-climate-impacts
• “How Are Buildings and Infrastructure Changing in Response to Climate Change?”,  engineering.com
• July 26th 2018,  https://www.engineering.com/BIM/ArticleID/17327/How-Are-Buildings-and-Infrastructure-Changing-in-Response-to-Climate-Change.aspx
• 39 National Research Foundation, WaterWiSe,  https://www.nrf.gov.sg/innovation-enterprise/innovative-projects/urban-solutions-and-sustainability/waterwise-water-monitoring-system
• 40 Bowers, K et al, Smart Infrastructure: Getting more from strategic assets, Centre for Smart Infrastructure & Construction,  https://www-smartinfrastructure.eng.cam.ac.uk/files/the-smart-infrastructure-paper
• 41 “How Curitiba’s BRT stations sparked a transport revolution – a history of cities in 50 buildings, day 43”, The Guardian, May 26th 2015:  https://www.theguardian.com/cities/2015/may/26/curitiba-brazil-brt-transport-revolution-history-cities-50-buildings
• 42 Institution of Civil Engineers, GEC 2018: Closing Plenary session, Day One, October 22nd 2018,  https://www.ice.org.uk/knowledge-and-resources/global-engineering-congress-2018/gec-2018-closing-plenary-session-monday
• 43 CoST, Our story,  http://infrastructuretransparency.org/about-us/our-story/
• 44 AfIDA,  https://www.afida-africa.org/about.php
• 45 World Bank, The International Infrastructure Support System – A Project Preparation, Collaboration and Information Sharing Tool,  https://olc.worldbank.org/content/international-infrastructure-support-system-%E2%80%93-project-preparation-collaboration-and
• 46 Infrastructure Canada, Investing in Canada Plan,  https://www.infrastructure.gc.ca/plan/about-invest-apropos-eng.html
• 47 “Chancellor announces major plan to get Britain building”, UK government, October 5th 2015,  https://www.gov.uk/government/news/chancellor-announces-major-plan-to-get-britain-building
• 48 Critical Infrastructure Resilience Understanding the landscape, The Resilience Shift, July 2018:  https://www.resilienceshift.org/wp-content/uploads/2018/10/Critical-infrastructure-resilience_RevA_Final_011018.pdf
• 49 “Infrastructure at heart of Spending Review as Chancellor launches National Infrastructure Commission”, HM Treasury press release, October 30th 2015,  https://www.gov.uk/government/news/infrastructure-at-heart-of-spending-review-as-chancellor-launches-national-infrastructure-commission

Further reading

No resilience without preparedness.

More than 14 million deaths are estimated to have been directly or indirectly associated with the COVID-19 pandemic between 2020 and 2021.

Building health system resilience

A multitude of shocks—including the covid-19 pandemic, ongoing conflicts around the world, climate change and economic instability—have severely challenged global health systems in recent years.

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Infrastructure, Education, and Economic Development in India

Advances in Finance, Accounting, and Economics

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Journal of Economics and Behavioral Studies

VINOD GUPTA

Provision of adequate infrastructure, in terms of both quantity and quality, is very essential for the rapid achievement of sustainable economic growth, both by increasing productivity and by providing amenities that enhance the quality of life. The objective of this paper is to investigate the role played by infrastructure, grouped under physical, social and financial, in determining economic development in India over the different time periods. An attempt is also made to find out the existence of intra-regional disparities, in terms of infrastructure, among the states of India. Using Factor analysis and regression analysis, the paper finds that infrastructure plays a significant role in determining the inter-state level of development in India during the past quarter century. The paper at the end discusses various challenges and opportunities for the infrastructure development in India and its link with sustainable economic growth.

sumedha bajar

IAEME Publication

India is considered to be one among the top 10 fastest developing countries of the globe and the growth rate of the economy has been one of the highest among the countries of the world for the last few years. The country started garnering momentum of growth after the economic reforms in 1991 which has been followed by massive investment in infrastructure building in the country by the entry of many countries and companies through FDI participation. The country is forecasted to grow at a higher rate in future also which is evidenced by the data released by international agencies such as IMF, WTO and the World Bank. The country’s inclusion in trade blocks such as BRICS is an indication of its growing importance among various trading nations. The economy has been experiencing an annual average growth rate of around 6.02 percent from 1991 onwards. To maintain the tempo of growth, infrastructure development is an inevitable necessity as all the sectors of an economy depends upon the basic infrastructural framework for it smooth and efficient functioning. Even though the concept of economic development used to be measured in terms of growth of output, a real outlook about the economic progress can be assessed by measuring the growth rate in per capita output and human development index, which is very much influenced by infrastructure development. Regional development in terms of infrastructure growth in a nation like India is highly impacted by a mixed bag of multiple factors such as topographical, economic and political variables. The uneven pattern of investment in industries as well as in economic overhead like transportation and communication facilities, irrigation and power has resulted in regional disparities also in India. Kerala and Gujarat are very small regions in India; still these states are center of attention of the world’s development economists due to the improvement in infrastructure facilities.

Http Dx Doi Org 10 1080 13547860903169340

Ranjan Kumar Dash

BUDDHADEB GHOSH

States which were developed and rich 20 years ago have progressed faster and higher compared to the relatively backward and poorer states.

astha agarwalla

There does not seem to be a consensus on the importance of infrastructure investments in the process of economic development. With persistent regional disparities, and increasing regional identities, there is a need to determine the drivers of regional growth. Contribution of infrastructure to regional productivity growth is analyzed in this paper. Empirical analysis using data from 25 states in India for the past two decades suggests that composition of infrastructure investment is important in facilitating economic growth. Empirical results also highlight that investments in economic infrastructure have the closest linkage with regional productivity growth.

International Journal of Business Continuity and Risk Management

CHANDAN SHARMA

Flora Pandya

In this paper, we analyze the availability of infrastructural facilities across the Indian States and Union Territories through Infrastructure index. In Literature, the impact of infrastructure on economic growth and development is positive and highly significant. On the basis of literature the paper tries to find out the relationship between availability of infrastructure and PCNSDP using OLS regression model in various States and Union Territories. The result indicates that there exists interstate disparity in availability of infrastructural facilities in Indian States and Union Territories. There exists a significant positive relationship between Infrastructure Index and PCNSDP.

BISWAJIT PAUL , Ashish Sana

Infrastructure sector is a key driver for the Indian economy. Infrastructure may be termed as physical infrastructure which may include social infrastructure. Importance of infrastructure in economic growth cannot be overemphasized. Infrastructure is the lifeline of an economy and the fate of the economy is intricately linked to the development or otherwise of its infrastructure. The objective of the paper is to examine the effect of infrastructure investment on economic growth of India. Gross Capital Formation (GCF) and Gross Domestic Product (GDP) are considered as infrastructural development macroeconomic variable and economic growth variable respectively. The data have been collected for a period of 57 years i.e. 1960 – 2016 (World Bank). Different charts and graphs have been used to analyse the status of infrastructure investment during the study period. Short run and long run relationships between infrastructure investment and economic growth have been examined using time seri...

Nicholas Horsewood

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Infrastructure and Economic Development

Last updated on October 10, 2023 by ClearIAS Team

As India draws closer to being a $5 trillion economy, the government’s strategic initiatives to encourage the infrastructure sector are providing a boost to the collective growth of the Indian economy.

The manufacturing sector in India continues to face several difficulties due to the country’s poor infrastructure. According to reports, China spends 20% of its GDP on infrastructure development, compared to India’s 4.3% annual expenditure.

In an effort to promote the expansion of the manufacturing sector, the Indian government introduced the “ Make in India ” initiative in September 2014. This was done primarily to support India’s status as the preferred location for global manufacturing and to stimulate the design, innovation, and startup sectors.

Table of Contents

Since independence, the government has had the full responsibility of providing the entire infrastructure like rail, roads, ports, power, airports, etc. But due to its capital-intensive nature, financial constraints, and human resource constraints, the government after LPG reforms (post-1991) seek the help of the private sector to bridge the infrastructural gap in the country.

In an economy, infrastructure can be built on the following three models:

Complete Government

Public private partnership (ppp).

• complete Private

Government constructs the entire infrastructure with a financial burden on its own and outsource some tasks and operation. Its maintenance is done by the government itself.

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Complete Private

Private construction is responsible for the construction, maintenance, and operation of the infrastructure but the traffic may be regulated by the government.

The PPPs, which were implemented in the early 1990s, redefined the roles of the public and private sectors in the provision of public services. Public-private partnerships (PPPs) are a mechanism for the public and private sectors to work together to implement and maintain a project (often an infrastructure project) for the delivery of goods and services.

In a typical PPP project, generally, the government shall be responsible for getting all the clearances like environment, forest, water, power, and land acquisition and the private party shall be responsible for the construction and maintenance of the project. Any political risks like nationalization of a project, government abandoning the project in between, war or social unrest shall be taken care of by the government and the private party shall take care of design and construction quality and maintenance facilities.

Necessary Steps to Boost Economic Development and Infrastructure

A Robust Strategy: Procurement strategy is a very important aspect of the overall execution of infrastructure projects.

Technological Obsolescence: The entire project execution chain, including engineering, procurement, construction, and commissioning, uses technology. Though it is challenging for leaders to keep up with technological advancements from beginning to end.

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Planning Strategy: The supply chain is a major issue for construction companies due to the vast variety and quantum of raw materials and supplies required. It requires proper planning and a crisis management plan to tackle sudden uncertainties.

Many infrastructure projects are today financially stressed, accounting for almost a third of stressed assets (Non-Performing Assets) in banks.

Large-scale infrastructure projects have been hampered by delays brought on by successive COVID-19 waves combined with a nationwide lockdown.

Current contracts place more of an emphasis on financial (government revenue) benefits than on providing services effectively. For instance, the bidder giving the highest revenue share to the government gets chosen for port and airport contracts.

Of late the government has started shifting its own responsibilities such as land acquisition, environmental and forest clearances, etc. in various projects to the private parties. If the private party is unable to obtain the clearances, it may abandon the project in the middle. As a result, there are disagreements between the public and private sectors, and the project is severely delayed.

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Uncertainties and disruptions in the supply chain are serious problems that require immediate attention. Construction companies experienced severe shortages of building materials, a lack of transport capacity, and prolonged wait periods for construction supplies imported from overseas due to port congestion.

There is no existing structure for the renegotiation of projects in case of failure. If a bureaucrat restructures a project, there are no rewards; instead, it may lead to an investigation for graft. So, in such cases of failed projects, bureaucrats naturally avoid renegotiation and the project suffers long delays and court cases.

Certain bidders are involved in reckless bidding (very aggressive in quoting prices) as they that the government will come to their rescue in case the project faces financial distress (for example Tata Ultra Mega Power Project in Gujarat).

Also read: Non-Performing Assets (NPA): How serious is India’s bad loan problem?

IIPDF Scheme

The Department of Economic Affairs (DEA), Ministry of Finance, announces the India Infrastructure Project Development Fund Scheme (IIPDF Scheme) for Financial Support for Project Development Expenses.

The India Infrastructure Project Development Fund Scheme (IIPDF Scheme), a Central Sector Scheme, would assist in the development of high-quality PPP projects by providing the financial support required to the project sponsoring authorities, both in the Central and State Governments, for developing a shelf of bankable viable PPP projects to achieve the goal of modern infrastructure for the country.

The DEA is putting a lot of emphasis on enhancing the quality and rate of infrastructure development in the country by encouraging private sector involvement in the sector. The DEA has taken a leading role in developing the ideal legal framework for private investment in infrastructure development. PPPs are promoted as a way to bring private capital and efficiency to the planning, construction, and maintenance of infrastructure projects. In addition, new programs and initiatives are being introduced to offer the private sector financial and technical support as needed.

National Infrastructure Pipeline (NIP)

Public Private Partnership in Infrastructure has been an important sector investment source. India is ranked second among developing countries in terms of both the quantity of PPP Projects and the related investments, according to the World Bank’s database on private participation in infrastructure.

India has to invest around $1.4 trillion in infrastructure over the next few years in order to reach a GDP of $5 trillion by 2024–25. In order to achieve this goal, the National Infrastructure Pipeline (NIP) was established with a planned infrastructure investment of around 111 lakh crores (US$ 1.5 trillion) between 2020-25.

Infrastructure Development Projects

To improve connectivity in the North Eastern Region, various infrastructure development projects have been undertaken by the relevant Ministries and Departments of the Central Government. These are related to enhancing the NER’s air, rail, road, waterway, power, and telecommunications connectivity.

In conclusion, India is certain to experience increased infrastructure expansion as a result of the government prioritizing infrastructure for overall economic development.

GatiShakti, for example, is a significant “productivity” booster initiative for the infrastructure industry. This program will assist in removing significant bottlenecks caused by the abundance of approvals and the lengthy clearing processes. Its multiplying effects will speed up project execution and keep expenses in check.

The program has the same transformational impact on the infrastructure market that the 1990s liberalization did. Additionally, given the endless possibilities, engaging private companies in national infrastructure projects may aid India in raising its infrastructure to international levels.

Article Written By: Priti Raj

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