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Infrastructure

Infrastructure. Crafting a better tomorrow.

As countries gear up for post-pandemic economic recovery, many have committed to improving their infrastructure. But the infrastructure of the future will need to be built not just for performance, but sustainability.

While “Infrastructure” is one of the original long-term thematic Supertrends, the topic has recently attracted attention because of its role in major fiscal stimulus packages aimed at reviving global economies. This means that investors, too, are turning their attention towards the companies and innovators driving change in the world’s transportation, energy, water and telecommunications systems, as well as in the cities where people live.

This is a Financial Promotion

In this video, experts share their views on the future of infrastructure.

Infrastructure video teaser
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A backdrop of investment

The scale of government investment in revamping infrastructure is immense.

  • US: President Biden has proposed a USD 2.3 trn infrastructure program, with approximately USD 700 bn directed at electric vehicle infrastructure, electricity networks, energy-efficient buildings, green technologies and clean energy manufacturing.
  • Europe: The EUR 750 bn European Union recovery fund aims to build greener, more digital and more resilient economies while shoring up struggling sectors.
  • China: China’s large fiscal stimulus also helped the country rebound in Q2 2020 – and its pledge to become carbon-neutral by 2060 is shifting infrastructure investments as well.

 

5 Infrastructure themes to watch

Reinforcing mobility

Reinforcing mobility

Although the pandemic-related lockdowns made 2020 a difficult year for the transportation sector, the start of vaccination campaigns has raised hopes of higher travel demand. At the same time, the pandemic has delayed necessary infrastructure investments, with underfunding affecting not only public safety, but also a country’s economic growth, employment and competitiveness.

Energy in flux

Energy in flux

With climate change and the Paris Agreement top of mind, the energy sector has been challenged to add renewable power generation capacity. The International Energy Agency estimated that between 2019 and 2040, the world would need to spend approximately USD 12.9 trn to finance the required growth. Other investment areas range from improving the efficiency and connectivity of transmission networks to constructing ultra-high-voltage grids.

The challenge with water

The challenge with water

As water losses in cities can be significant in the distribution process to customers, the refurbishment of existing water pipes will be essential. The Organisation for Economic Co-operation and Development estimates that by 2040, USD 5.6 trn will be needed to improve global water infrastructure – slightly less than half of the required electricity network investments.

In search of bandwidth

In search of bandwidth

Telecoms-related infrastructure is tightly linked with the growth of videoconferencing and e-learning. The demand for internet data traffic and data storage looks set to expand beyond the pandemic, especially as 5G adoption takes hold and potentially leads to a jump in global wireless network traffic.

Smarter cities

Smarter cities

The construction of more sustainable building systems in large cities will also be important to global carbon reduction efforts. In light of the Paris Agreement targets, the World Green Building Council has set 2030 as the year all new buildings should reach net-zero emissions. The role of smart buildings – which will use big data, the internet of things and artificial intelligence to drive energy efficiency, security, and more intelligent waste management and recycling solutions – cannot be underestimated.

For more detail about the overhaul of global infrastructure to meet both economic and sustainability goals, please see the Supertrends report.

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