Researchers at the McKinsey Global Institute have concluded that the world will need to spend $57 to $67 trillion between today and 2030 in order to update its infrastructure. The American Society of Civil Engineers (ASCE) gives our nation’s infrastructure a grade of “D” and says the United States alone needs to spend $2.2 trillion over the next five years to get infrastructure back on track. Despite this tall, urgent task, infrastructure spending became a failed bargaining chip in the debates surrounding the fiscal cliff and many politicians remain unwilling to spend where spending is needed.
President Obama tried but failed to make infrastructure spending a priority in his first administration. The American Jobs Act of 2011 called for $50 billion in spending to improve railroads, airports and roads. It also would have set up a $10 billion “infrastructure bank” to stimulate spending and create easier access to project funding. The $50 billion figure also came up during the “grand bargain” talks when the President reportedly again sought $50 to $75 billion in infrastructure spending in exchange for spending cuts.
Infrastructure spending on an international stage is even more complex and daunting as many developing countries are still trying to build infrastructure, let alone modernize what’s in existence. The McKinsey research suggests that the United States is not a leader in terms of infrastructure and more closely resembles middle income nations like South Africa and China. The gap becomes wider when the focus is placed on transportation.
Finding funding is not going to be a cakewalk, nationally or internationally, but progressive methods are being implemented to beat back costs. This new wave of focus on more efficient methods could be part of the answer to our nation’s infrastructure woes, according to The Washington Post:
For example, Chile has adopted a set of standardized cost-benefit analysis procedures that have both made the approval process for infrastructure projects more predictable and increased the average effectiveness of approved programs. The Australian state of New South Wales adopted a permitting process that reduced time-to-approval by 11 percent in one year. Massachusetts embraced new ultra-fast manufacturing techniques that enabled it to build 14 bridges in only 10 weekends, which is both good in its own right and prevented the high costs associated with long-term, oft-delayed projects (like, say, Boston’s own Big Dig).
Adopting methods like those used for the Massachusetts “Fast 14” project (addressed by us here) could cut costs on a global scale, perhaps by as much as $1 trillion (from $2.7 trillion to $1.7 trillion) according to McKinsey’s research.