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Emerging Trends in Infrastructure

The 11th edition of KPMG Ireland’s ‘Emerging Trends in Infrastructure’ is here and is as much about inspiring an essential change in mindset as it is about predicting future trends. KPMG look ahead to potential approaches and technological solutions, raise new ideas and explore the opportunities that are being created.

Future generations may look back at 2023 with deep admiration or deep scorn. They may praise leaders for their foresight or damn them for their inaction. The decisions made this year could shape infrastructure for decades.

‘Emerging Trends in infrastructure’ is intended to help infrastructure players, governments and decision-makers think differently about the challenges and opportunities facing the infrastructure sector this year. No doubt, it will be a year of continued disruption. These are the ten trends you should be watching.

1. Tilting Towards Territorialism and Shifting Allegiances

In a world ruled by unstable temporary alliances, awareness and agility may be key. For global infrastructure players continuously shifting allegiances is creating complexity. Infrastructure is one of the few places that consensus can still be found. The advice is to keep their new geopolitical and supply chain security lenses on a pivot. 

2. Backed into the Sustainability Corner

Leave the old mindsets behind and factor sustainability into decision making now. Much of the heavy lifting of climate action will likely fall on the shoulders of the energy and infrastructure sectors. The trick will be in coming up with approaches that help solve the trilemma of security, affordability and sustainability at pace.

3. Age of Mass Customisation Emerges

Now is the time to create customised services that meet the needs of tomorrow’s citizens. The big challenge facing infrastructure players is how to remain relevant in an age where technologies and private players are already disrupting the service delivery model. This requires new ideas models and tough decisions about what to do with existing industrial age assets and how to embody the age of mass customisation.

4. Inflation, Pricing and Supply Elevates the Risk

Is an inflationary pandemic on the anvil after a health and supply chain pandemic? As inflation bites so does affordability. The trick now is to remember how uncertainty was factored in historically. Strong trust and cooperation between infrastructure players both private and public will be key. The challenge will be to maintain price discipline while allowing for prudent risk sharing. 

5. Getting the Most From Digital

Why is it taking so long for infrastructure to actually embrace digital? Brownfield infrastructure is notoriously difficult to digitise however many owners are still finding ways to adopt newer technologies to vastly improve their asset management. Greenfield however, should have digital embedded into every phase of infrastructure development. This year, it is expect to see significant pressure on contractors and developers to up their digital capabilities and integrate into the wider value chain. 

6. Cities Look for Purpose

Will this year bring real and collaborative debates on what value cities can deliver? There are seeing new cities being designed and developed as role models of the shared economy where work, play and live agendas overlap. Existing cities have to sprint to keep up with emerging markets having the upper hand. This year, expect to see city, regional and national governments start to engage in real and collaborative debates on what value cities can deliver.

7. Institutional Players Drive Climate Agenda

Institutional investors grasp the effects of climate change and want to do something about it. Governments have big ambitions on climate change. The cost of the required structural changes will be enormous and the justifiable debate on who holds the costs and reaps the benefits of climate change continues. Institutional investors wield the power of their capital to drive climate outcomes. Institutional investors, governments and owners will need to become more comfortable with the power of capital driving climate change. 

8. Globalisation Gets Buffeted By Security

Will infrastructure players rework their supply chains into more dynamic supply webs? It takes significant time, effort and investment to rework supply chains however governments are recognising that their assets could be vulnerable to insecure supply. Expect to see infrastructure players start to rework their supply chains into more dynamic supply webs that form around security of supply. 

9. Dealing with Sunk Costs and Abandoned Assets

Can new ways of thinking and approach to financing, funding, and regulation solve the issue? An obsession with sunk costs is slowing the ability to transform. The potential risks of trying to solve new problems within an old context and mindset are huge. If society is to move peacefully and confidently from the Industrial Age to the Age of Mass Customisation, it should become much more willing to abandon the status quo and encourage greenfield thinking. 

10. The Definition of Infrastructure Evolves

Has the concept of infrastructure broadened? The lines between sectors are rapidly blurring. The concept of ‘infrastructure’ is broadening to be much more about serving the needs of society than delivering a specific asset. In order to better respond to citizen needs, infrastructure investors, operators and owners shift towards collaborative, evolving partnerships and ecosystems to fluidly combine capabilities. 

Source: KPMG Ireland

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