Public investment in infrastructure systems in the U.S. has tapered off, while demand for high-performing, high-capacity and resilient systems has grown. Current levels of public funding are far below what is needed to maintain, improve and expand system capacity to accommodate future demand and avoid the economic costs and inefficiencies associated with underperforming systems. In order to deliver on our mission of serving the public good, we need alternative financing mechanisms. Intelligent infrastructure, data analytics based on information derived from infrastructure, and the integration of performance data with financing mechanisms offer new opportunities.
Modern infrastructure is connected and automated through sensors and computational approaches that help us better understand the performance of these smart systems. Roads and bridges, water and energy systems, buildings and industrial operations—all are being designed to become more adaptive, responsive and resilient. The data generated in this information-driven approach can bring in new investors, attracted by the information efficiencies and value of the infrastructure and the premiums they can get if the infrastructure exceeds performance targets.
The 10-year infrastructure investment gap in the United States is $2 trillion.
Smart infrastructure financing models can also democratize access to quality systems across income disparities. Traditionally, the credit rating of a municipality determines what they (and thus the people living there) have to pay to obtain investment. This tends to disadvantage lower-income communities, which often have lower credit ratings. Smart infrastructure financing has the potential to offset this disparity, since it does not depend on credit ratings only. Rather infrastructure performance and the value of the data derived from the infrastructure are largely uncoupled from credit ratings. With smart infrastructure financing, investors can access new cash flows and equity value from the data markets, not just fixed interest payments from the municipality. In this way, some of the debt burden is taken off the taxpayers.
These ideas are percolating in the finance world and require an understanding of the actual infrastructure. Civil and environmental engineers have a wealth of expertise to bring to the table. Our deep domain knowledge in designing smart infrastructure systems that are in harmony with natural environments, our capacity to harness data and distill information through engineering models, combined with our direct involvement with the potential applications and needs facing communities across the globe, is central to the digital revolution of smart systems. By helping to develop standards and benchmarks, civil and environmental engineers will enable the responsible and equitable integration of smart infrastructure design with efficient financing models in service to society.
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