Infrastructure has remained largely untouched by the technology revolution underway around the world. With the exception of the telecoms sector, there has been no fundamental change in the type of infrastructure built compared to 50 years ago. We still use the same assets and we still follow the same basic assumptions we did 50 years ago. But the reality is that the technology revolution is now upon us.
Technology is rapidly and fundamentally disrupting the way we plan, design, develop and operate our infrastructure.
Solar power technologies, for example, are not only redefining the way power is generated, they are also disrupting the ‘centralized’ generation and distribution models that underpin most of the developed world’s energy investment strategies. The technology for driverless cars is developed; now the question is how they will be adopted and integrated into society. And the continued efforts to develop the Hyperloop threaten to shatter traditional transportation assumptions.
Interestingly, much of the demand for technological advancement is being driven by the consumers. In the developing markets, concerns about the affordability of conventional technologies are driving adoption of newer approaches. In the mature markets, consumer desire for more control over their infrastructure use is driving demand for more sophisticated services.
Demand for technology is also being catalyzed by a growing alignment between ‘macro’ infrastructure requirements (such as reducing emissions) and the ‘micro’ consumer decisions (such as investing in web-based home thermostats). Over the coming year, we expect to see the macro and micro come even closer into alignment as technology costs continue to fall and consumer demand rises.
While it is clear that consumers will continue to drive decision-making and progress, this isn’t about buying into the newest technologies and consumer demands. This is about understanding the direction, pace and impact of technological change to make informed long-term decisions around investment, business models and customer service.
Indeed, while much of today’s classic micro-economic theory assumes that technology is ‘fixed’, this is clearly no longer the case. Put simply, the infrastructure we are going to need and use in 20 years’ time is going to be very different from what we are using – and designing – today.
Over the coming years, infrastructure owners and operators will become much more comfortable with technology and technological change. In fact, some jurisdictions (such as those with high solar generation potential) will leverage new technologies to essentially ‘leapfrog’ more evolved economies in terms of cost and service availability.