Infrastructure continues to drive growth of the global economy. Governments have the desire and ambition to invest, and new technologies and innovation are unlocking development opportunity, but social, financial and political division risks stalling critical action. A new KPMG International report, Emerging Trends in Infrastructure 2018, identifies the trends that will pose the greatest challenges and fuel new opportunities for infrastructure projects over the coming year.

The report cautions that today’s divisive politics may result in many worthy projects becoming stalled under the weight of political and social indecision. Yet the report also notes that there is still great opportunity.

“With the disruption, confusion and uncertainty of the past year – it would be easy to be very downbeat on the prospects for effective infrastructure development around the world,” says Richard Threlfall, Global Head of Infrastructure at KPMG International. “Yet demand for infrastructure continues to accelerate globally, and indeed the more infrastructure we build, the more we connect the world and increase its resilience to local political risk.”

“Those markets with vision and adaptable institutions should find ways to rise above the din of divisiveness,” argues Stephen Beatty, non-Executive Chair and lead on Infrastructure in the Americas. “It takes a long-term perspective and purpose to accommodate and find ways to strike compromise between competing needs and interests. Those markets most adept at moving forward with purpose and vision stand to be most successful.”

The report points to the evolving security environment in many markets and argues that public spaces are becoming increasingly difficult to sustain. It notes that, having been on the ‘back foot’ for several years, governments will now start to adopt a much more aggressive stance toward infrastructure security.

Against this backdrop of competing forces, the report also predicts that debates about sustainability – in all its forms – will become more critical than ever, not only for users and planners, but also for investors and owners.

“Today’s view of sustainability is far too narrow,” according to Julian Vella, Infrastructure lead for KPMG in Asia Pacific. “Most people instinctively think about sustainability in terms of the environment, and that is clearly a critical consideration in any infrastructure project. But sustainability is actually a much wider concept, encompassing the social and technological sustainability of infrastructure and that is increasingly creating new pressures on decision-makers and planners.”

This year’s Emerging Trends, identifies a number of issues and topics that carry both pros and cons. For example, technology could enable unprecedented progress… or it could make current planning models obsolete; new pricing and funding models could release massive investment… or they could exacerbate issues of social and wealth inequality.

The nine trends identified in this year’s report include:

• The clash of competing forces
• Infrastructure planners start to think about flexibility
• Sustainability – in all its forms – rises up the agenda
• The pace of development comes under the microscope
• Security becomes critical
• Creating alignment between payers, financiers and beneficiaries
• Pricing models mature
• The benefits of sharing data become more evident 
• Alternative asset classes re-converge

While this year’s Emerging Trends in Infrastructure contains a number of trends that have been evolving for some time, it also highlights topics that are only now developing and should continue to shape infrastructure markets for years to come.