Trend 3: Consumer behavior | KPMG | TH

Trend 3: Understanding consumer behavior will be the key to infrastructure planning and management

Trend 3: Consumer behavior

Changes in the way consumers now interact with infrastructure are turning common wisdom on its head and infrastructure planners need to keep up.


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The underlying parameters of infrastructure planning have changed. For the past 50 years, the common wisdom has been that bigger populations require more roads, bigger generation capacity and more transit, all macro solutions and quite appropriate given a ‘fixed’ technology solution (such as suburbs and the automobile) and ‘fixed’ consumer behavior.

But over the past decade, both technology and consumer behavior have begun to change. Changes in the way consumers now interact with infrastructure are turning common wisdom on its head. Infrastructure planners are struggling to keep up.

Consider, for example, how some Millennials in the developed world interact with transportation infrastructure. They do not see the need to own cars. When they do use a personal vehicle, it is often shared. They use real-time traffic and navigation apps to select their route through a city. And environmental impact influences their transportation decisions as much as cost and convenience.

In many developing markets, this trend is playing out somewhat differently. In Asia, rising affluence and a rapidly expanding middle class have led to massive demand for air travel. In Africa, the development of solar has reduced demand for electricity distribution investments. And across the globe, governments are considering how a bevy of new technologies – renewable generation, energy storage, driverless cars and others – will influence future demand for infrastructure.

Cities, too, are taking note of the need to embrace disruptive technology – blockchain, bitcoin, sharing economy, open data and autonomous vehicles – recognizing that these growth enablers will become particularly important as they compete for the share of future employment growth, particularly from the young wealth creators.

Over the coming year, we expect governments to take a more ‘bottom-up’ approach to infrastructure planning and development, taking the time to understand the changing demands of both current users and future generations to help shape their infrastructure agendas. Some may want to examine the UK’s Mistral–ITRC program, a leading initiative to build a ‘system of systems’ model designed to forecast future infrastructure needs.

We also expect some governments to take advantage of these changes to solve some of their larger infrastructure challenges. Incentivizing Millennials to ride bicycles to work, for example, would respond to their desire for low-carbon, low-cost transportation. Copenhagen has been remarkably successful in driving similar programs across the wider population. Improving access to solar generation sources in Africa would not only provide power to rural areas, it would also drive economic growth and help create a new consumer class.

Ultimately, we expect this year to bring significant change to the way consumers use their infrastructure. And this, in turn, will create even bigger challenges for infrastructure planners.

The long view

While this trend may cause some consternation for governments over the next decade or so, we believe that changing consumer preferences and demographics may eventually bring demand and supply back into line. However, as the ‘micro’ decisions of consumers start to influence the ‘macro’ infrastructure agenda, new areas of demand may emerge. Over the next decade, we would not be surprised to see a city or two ban all forms of carbon-fueled vehicles.

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