The Global Infrastructure Boom
The next 20 years will see an unprecedented global investment in infrastructure. Two primary factors will fuel this boom:
- The aging of the infrastructure in the developed world.
- Economic growth, especially in the developing world.
New and better infrastructure will be needed everywhere, not because it is an end unto itself, but because it provides the means for people to realize radically improved lifestyles.
In short, infrastructure will drive prosperity and growth, which will have a positive impact on quality of life globally. This includes social well-being, health, and safety of citizens.
The primary challenges will lie in funding these enormous investments and ensuring that the resources are not mis-allocated to fund “bridges to nowhere” and “green projects” that deliver no real payback.
This surge in spending is necessary because the long-term economic well-being of both emerging and developed economies is threatened by the infrastructure gap caused by years of under-investment, as well as mal-investment. The fact is, existing infrastructure will not be adequate to meet the demands of the economic growth to come.
This is especially true in the developing world, where transportation and other types of infrastructure were never built to serve even today’s increasingly urban population.
For instance, meeting the needs of the population and expected economic activity of 2030 means that transportation infrastructure will need to handle two to three times as many passengers as it does today.
According to the Futures Project on Transcontinental Infrastructure from the Organization of Economic Cooperation and Development (OECD), between now and 2030:
- Airline traffic worldwide will grow by 4.7 percent per year.
- Airfreight will increase by around 5.9 percent annually.
- Maritime container traffic will increase by more than 6 percent per year.
- Railroad passenger traffic will increase around 2 percent annually.
- Railroad freight traffic worldwide could increase at around 3 percent per annum.
As a result, air passenger traffic could double in just 15 years, air freight could triple in 20 years, and port handing of maritime containers worldwide could quadruple by 2030.
Since the current infrastructure won’t be able to handle even a 50 percent increase, we must act quickly to ensure that growth is not stymied by this looming infrastructure bottleneck.
That’s why the success of the coming global economic revolution depends as much on solid planning and unencumbered free markets as it does on breakthrough technologies and healthy demographics… Read the full article.