One Year Later: Impact of the Election on Infrastructure and Local Government Spending
“We’re very overdue for a strategic infrastructure initiative. It’s an important issue because our average assets are between 50 and 60 years old.”
- Norm Anderson, CEO of CG/LA Infrastructure
About 70 percent of current federal funding maintains these aging roads, bridges, and public transit systems. Discussions of a new infrastructure plan encompass far more than traditional elements—they also include digital technologies like 5G and AI, which will transform schools, healthcare systems, transportation, water works, and energy generation and transmission. “Infrastructure is no longer the substrate that allows the economy to be productive,” says Anderson. “It’s the brains of the economy.”
An Ambitious Vision
This new infrastructure concept would enable technologies like 5G, autonomous vehicles, and IoT sensors to become ubiquitous. “The digitization of our interstate system, for example, would put 5G posts every hundred yards, creating an autonomous speedway for trucks,” says Anderson. “Creating a logistics end-to-end system in the U.S. will enable local advanced manufacturing and agriculture. That’s a long-term, ambitious vision.”
Currently, the U.S. government invests about $300 billion per year in infrastructure, but only about 30–40 percent of that goes toward new construction. As recently as 1980, about 70 percent of infrastructure spending came from the federal government, but today, states and municipalities shoulder most of the burden for infrastructure investment.
Currently, the U.S. government invests about $300 billion per year in infrastructure, but only about 30–40 percent of that goes toward new construction.
In March, the Biden administration proposed a roughly $2 trillion plan that includes traditional infrastructure elements along with other non-traditional provisions like funding for electric cars and home care for elderly populations. As negotiations in Congress continue, the plan is likely to evolve a bit. “I think the total plan will land at around $1–1.5 trillion over 10 years, all earmarked for new infrastructure,” says Anderson. “As Congress thinks about this bill, they realize that we’ve got $30 trillion in debt already, which we’re passing along to the next two generations. That’s not okay. We’ve got to make significant investments while figuring out how to bring in long-term returns to assist with those investments.”
Digital Transformation
The infrastructure plan has evolved toward digital transformation, advanced manufacturing, and bringing the supply chain to the home front, particularly following the pandemic-induced supply chain complications of the past year. To achieve these results, the plan must prioritize logistics, facilities, and intelligent highways. “Smart new infrastructure is going to get a relatively large proportion of the budget,” Anderson predicts. “If you think about infrastructure as the brains of the economy, it means prioritizing artificial intelligence, big data, machine learning—but it really means empowerment of the individual, making sure people have the connectivity and flexibility they need to start businesses anywhere they want.”
“I think the total plan will land at around $1–1.5 trillion over 10 years, all earmarked for new infrastructure.”
- Norm Anderson, CEO of CG/LA Infrastructure
The U.S. needs to start measuring returns on these massive public investments—and emerging technologies will make that possible. Innovations such as IoT sensors will allow governments and private companies to do a better job of monitoring performance and making iterative changes to increase that performance.
Preparing for the Flood
If and when a significant infrastructure bill passes, local governments will receive an influx of funding. “They need to prepare now so they’re ready to start lots of projects,” says Anderson. “They should first make sure they have enough project managers on staff.” In the public sector, he notes, leaders have problems spending the money they have. “Typically, their problem is not going over budget—it’s neglecting to spend the budget they were given. So it’s helpful to make sure they have the planning staff in place to create and implement new projects efficiently.”
“The public sector’s role isn’t to block everything until there’s no risk left. Instead, they need to facilitate needs and drive innovation—rapid, creative, imaginative, and effective public investment in projects.”
- Norm Anderson, CEO of CG/LA Infrastructure
Successful initiatives worldwide demonstrate that when countries transform their infrastructure, trust emerges between the public and private sectors. “The public sector’s role isn’t to block everything until there’s no risk left,” says Anderson. “Instead, they need to facilitate needs and drive innovation—rapid, creative, imaginative, and effective public investment in projects.”
Engaging Citizens
Engaging CitizensIf the public infrastructure plan is to be a success, Anderson stresses, Congress must prioritize citizen engagement. “Getting them into this conversation is key, from the use perspective,” he says. “We’ve got to figure out what people want and build things that way—viewing mobility as a service, for example, or designing water meters where homeowners can see the quality of their water when they turn on the tap. These innovations will yield clear benefits to the general public.”
Congress needs to create better channels to listen to people about infrastructure projects. “One constant I hear from chambers of commerce, farmers, and other groups across the country is that nobody in Washington listens to them and there’s no way for their voices to be heard,” Anderson says. “That’s a huge problem.”
In part to help create spaces for those conversations to happen, Anderson and his consulting team have created the Strategic Infrastructure Performance Institute, a nonprofit organization that supports cutting-edge work on infrastructure projects and markets in the U.S. and globally. “I’d love to get as many public sector participants engaged in this as possible,” he says. “The point is to focus on how to prioritize projects and how to think about innovation, especially technology innovation in our infrastructure.”
