A recent survey — conducted by Deloitte in September 2021 and released last week — called on 300 public officials across all levels of government to weigh in on these topics.
“I do think that the trick is going to be resilient, flexible, customizable infrastructure. When that’s developed, I think we’ll start to see some very interesting outcomes from that,” said Avi Schwartz, a risk and financial advisory principal with Deloitte Transactions and Business Analytics.
Infrastructure is, of course, top of mind among countless public- and private-sector thought leaders given the recently passed Infrastructure Investment and Jobs Act, which, over the next five years, will send some $1.2 trillion toward refurbishing, updating and repairing standard pieces of infrastructure like roads and bridges. But the legislation also charts new courses in areas like the electrification of transportation or greatly expanding access to broadband.
Some 42 percent of survey respondents listed increased demand for broadband and Internet access as one of the lasting impacts of the COVID-19 pandemic, the highest of any other impact.
The infrastructure package is also public policy drafted in the shadow of the COVID-19 pandemic, which revealed societal shortfalls in areas like social and environmental equity and the general resilience of cities. As states and local jurisdictions plan for the future through infrastructure investments, the most successful regions will be those that build resiliency and flexibility into their projects, said Schwartz.
“The developers and agencies that figure out how to do that are going to have a tremendous advantage for whatever the next unforeseen pandemic or tragedy is. And that, I think, is something that I hope we see a lot more innovation around,” said Schwartz.
“And I think the places that do that, whether they’re urban or suburban, I think will be attracting more people to live in them. They’re more attractive places to be,” he added.
In terms of how new infrastructure — and the design, the planning and the deployment of the infrastructure — may look different from years past, watch for more merging of the "bricks-and-mortar and digital,” said Schwartz.
As an example, departments of transportation may have no shortage of civil engineers but will need to think about adding data and cyber engineers to their staffs.
“And other kinds of engineers,” said Schwartz. “Not just your typical civil engineers, because when you install pavement, there’s now sensors in it.”
Survey responses indicate that AI is one of the biggest growth areas for government infrastructure, with 61 percent of respondents saying AI and machine learning will have the biggest impact on infrastructure projects.
“How does that change the way that government has to plan for infrastructure projects?” said Schwartz. “I think there is the potential for the public to interact with physical infrastructure differently because now physical infrastructure and digital infrastructure are more closely aligned.”
Watch for more public and private partnerships, in part, as a mechanism to get more mileage out of the government funds.
“I think there’s an opportunity for these federal dollars to de-risk projects in a way that will make private capital more excited, and interested, and able to participate,” said Schwartz. “Now, it may not go that way. But it is sort of up to our government leaders to decide.”
Chris Bast, director of EV infrastructure investments for the Electrification Coalition, echoed a similar point on a recent panel discussion around the build-out of a national electric vehicle charging network. The infrastructure law has earmarked $7.5 billion for the project; however, the success will be in how well this money is leveraged to encourage much more in private investment, said Bast.
Other officials, like Michael Berube, deputy assistant secretary for sustainable transportation at the U.S. Department of Energy and the Office of Energy Efficiency and Renewable Energy, made similar statements.
“Private-sector investment, separate from the federal dollars, will be critical,” said Berube on a panel discussion in January at the National EV Charging Summit, organized by the EV Charging Initiative.
“We anticipate ongoing private investment and opportunities, quite honestly,” he added.
“We could go out and build EV [charging] stations with however much the $7.5 billion will allow,” Schwartz offered. “Or, do maybe take a little bit more risk, a little bit more effort, a little bit more planning, and leverage those dollars to get $10 billion or $20 billion worth of EV stations built.”
Schwartz noted that for this approach to work state and local governments have to have legislation that allows the public-private partnerships.
Climate change also seemed to be more top-of-mind among federal government survey respondents than state and local officials. The new law is seen as perhaps the nation's most sizable step to date to take meaningful steps to address climate change, and respondents largely believe governments will increase incentives to encourage the use of renewable energy.
A scant 2 percent of survey respondents “believe that there will be fewer people living in cities, and only 13 percent believe that there will be more demand for larger residential units.” This seems to fly in the face of pandemic-fueled migration trends as urban dwellers departed cities like San Francisco for other areas, driven, in part, by increased work-from-anywhere arrangements.
Considering that the survey was polling government workers, this could reflect a bit of “wishful thinking,” said Schwartz.
“To me it just speaks to the requirement to build infrastructure with resilience, and flexibility,” he added. “But I don’t think anybody is going to count cities out. Cities generally are resilient, and they’re fun, and they’re energetic.”
