Infrastructure – the foundations of the future

 

„What makes business? The roads! How do they move the food they eat? The roads! How do they get to work? The roads! How do they get home to their wives? The roads!“

– Robert A. Heinlein, The Roads Must Roll

In 1940, the American author Robert A. Heinlein wrote the short story „The Roads Must Roll“. In it, he paints a picture of a city that escapes the threat of traffic and environmental collapse by abolishing rolling traffic. Instead, the roads themselves roll – powered by low-emission turbines – as do huge passenger platforms at their edges. The speed decreases from the center to the edges. The non-mobile urban environment emerges around this system, just as cities once developed along river courses. Unfortunately, this innovative urban topography also has a dark side. It manifests itself in the form of new social tensions, newly emerging precarious classes, technological vulnerabilities, and a fragile urban environment that is economically dependent on constant movement.

„The Roads Must Roll“ shows how difficult it is to rethink infrastructure, let alone regenerate and develop it. Since ancient times, infrastructure has played a key role in political and economic development. This is particularly true when a social order is geared towards innovation, expansion and participation. Infrastructure – transportation and communication networks, energy supply, basic physical and digital technologies, factories and buildings, or logistical and military capabilities – is still the basis for supporting this growth-oriented program today.

Europe has been the world‘s infrastructure champion for centuries. Despite wars, political upheavals, and fragmented national structures, it has succeeded in creating ever better structural conditions for the continent to prosper. The three golden decades after the Second World War – the „Wirtschaftswunder“ in Germany, the „Trente Glorieuses“ in France – are inextricably linked to an unprecedented infrastructure reset.

Today however, half a century later, it is obvious that something is wrong. Transportation, energy and communication networks are reaching their limits, highway bridges – up to 5,000 in Germany alone – are crumbling, cities are suffering from overcrowding, flooding and overheating, logistical chains are breaking down due to congestion and unreliable rail and air traffic. The equipment of many manufacturing companies – their halls, plants, machines – is also becoming an increasingly critical bottleneck factor because it is also outdated or cannot be adapted to rapid technology cycles and disruptive market changes.

It is becoming increasingly clear that a reliable, scalable, adaptive, and resilient infrastructure is needed. Without it, modern production concepts and digital initiatives will not work, nor will the design of circular and efficient production processes, the decentralization and decarbonization of the energy supply or adaptation to demographic change. The roads don‘t roll, and Europe‘s growing infrastructural backlog is increasingly becoming a problem in global competition.

There are a number of reasons for this development. Investments in infrastructure tie up a great deal of capital over the long term, which, as we discussed in the previous edition of DIALOG, is urgently needed to survive in the marketplace. At the same time, these investments take years to deliver results, meaning that decision-makers who embark on such projects incur the high costs and hassle, but usually do not reap the rewards of their decisions. Simultaneously, bridges, networks, systems, and buildings generally continue to operate for a very long period until they are completely unfit for use. The workaround – adapting to gradual deterioration and the constant postponement of investments – can therefore appear more rational from an individual perspective than expensive and complex renovation and maintenance. Furthermore, infrastructure is either a public good or it encroaches on public space, which in democratic states inevitably leads to tough and protracted social conflict and political negotiation.

Above all, however, both public and private players are faced with the problem of not knowing exactly what specifications will be needed in the future and what the risk of investing in something will be, given the very long construction and life cycles of infrastructure, and how the risk of investing in something that is already obsolete at the time of completion can be reduced. We therefore need concepts to deal effectively with this fundamental uncertainty as well as the courage to take the necessary steps.

As a global operations consultancy for the manufacturing industry, we are constantly confronted with various aspects of infrastructure aspects – whether in terms of change projects or in the context of framework conditions that enable and limit entrepreneurial action. For this issue of DIALOG, we have brought together our experience and external perspectives on the topic and outlined the contours of a smart and sustainable infrastructure.

We wish you an insightful read

Sebastian Diers
Managing Partner, ROI-EFESO

 

DIALOG #70 – SMART INFRASTRUCTURES

How we are future-proofing our infrastructures

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