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“This too shall pass”. This sentiment seems particularly apt when talking about the disruptions the world has faced over the past year. Much like during other epoch-defining events (like the Second World War), the future of the world remains shrouded in a veil of deep fog. Planning for the future has never been more challenging.

What we do know, however, is that the current disruption will pass; the fog will lift. What we do not know is the extent or permanency of the disruption's impact. How will the way people travel and vacation change? Will they continue to avoid social interactions in favor of digital experiences? How must infrastructure adapt in order to support potential new ways of living and working?

When building assets with lifecycles that span decades, this level of short to mid-term uncertainty and reduced forward visibility can be particularly challenging. Being able to understand user trends is important for making the right infrastructure investment decisions, but those trends are now in flux. And being able to distinguish the permanent changes from the transitory is not easy.

We may all agree that we should `build back better', but what exactly does that mean? And what investments will allow us to achieve that goal?

In an effort to answer these questions, infrastructure planners have been considering a bewildering range of different scenarios on their long term planning (Transport for London, for example, agreed to a wide-ranging review of their future financial position and financial structures in return for nearly USD2.2 billion of subsidy from the UK Government in May 2020). Scenarios under consideration have ranged from the potential for a continued shift in the value proposition of cities (see Trend 2: Cities rethink their value proposition, for more on this) through to what might be required to support a remarkably strong rebound.

The problem is that one scenario may suggest a reduction in mass transit investment while another will point to a return to previous demand trajectories requiring significant capacity enhancements. And both seem just as plausible. What do you do?

The temptation may be to wait until more certainty can be found. But that will only exacerbate the infrastructure deficit and leave countries and jurisdictions with suboptimal infrastructure to support society and drive economic growth. Waiting, therefore, is not a viable option. Choosing the right actions for the future, however, requires strong vision, leadership and - ultimately - consensus.

In the absence of clarity, infrastructure owners and planners are now trying to identify 'no regret' investments that align to their existing long-term plans but allow for increased flexibility and agility to meet the rapidly evolving needs of business and society.

Over the coming year, we expect infrastructure planners, operators and developers to start looking for ways to enable a much more nimble and flexible approach to infrastructure planning, development and delivery. This will be particularly difficult in today's highly-politicized 24/7 media environment. Traditional approval structures and processes will be challenged.

Indeed, our view suggests that the infrastructure sector will need to get used to operating within a more dynamic and evolving environment. As we first suggested back in 2016, infrastructure owners and planners will want to learn lessons from the technology sector where the leaders continuously reinvent, recalibrate and refocus based on evolving market conditions; translating that mentality into a world of real, fixed assets may be a challenge, however.

Don't expect the fog of uncertainty to dissipate in 2021 (it may get even thicker). But do expect to see infrastructure owners focus on enhancing asset utilization and optimizing performance as a way to better 'sweat' their assets.

At the same time, infrastructure planners will also need to focus much more on leveraging technology (such as using digital twins to support better planning through simulations), data and analytics (leveraging Internet of Things technologies for better operations and maintenance, for example) and decision-making tools. Doing so will help infrastructure planners them get more from their assets and to enable them to better navigate uncertainty and prepare for a future characterized by changing dynamics, risks and opportunities.


The excerpt was taken from KPMG Thought Leadership, Emerging trends in infrastructure 2021 edition.