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Horizons Talks: Infrastructure futures

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The Horizons Talks speaker series brings experts from Canada and around the world to share their forward-looking research and ideas with public servants.

What will the future of infrastructure look like? The Global Infrastructure Hub has conducted a scenario-planning exercise to understand how a collection of 25 transformative trends could reshape the infrastructure industry.

Monica Bennett, Director of Thought Leadership and Stephanie Barker, Strategy and Operations Associate at the Global Infrastructure Hub presented insights on GI Hub’s Infrastructure Futures Report, delving into the three extreme but plausible future scenarios that were developed in response to these transformative trends. They explain the process and methodology, discover how we can respond to the challenges and opportunities affecting the infrastructure industry and find out what insights have come from this work.




Kristel Van der Elst, Director General of Policy Horizons Canada

Monica Benett, Director Thought Leadership, GI Hub (Chair)

Stephanie Barker, Analyst, Global Infrastructure Hub

MONICA BENETT:  Excellent.  Thank you so much, Kristel, for that introduction, and thank you as well to Rachel and Claire for the invitation to present today.  And indeed, I think a lot of the work that we’re doing around Futures is very much in line with what you’re doing at Policy Horizons, but I think more broadly as well around some of the interests of Canada, more broadly around the infrastructure. 

So if we can go on to the next slide please, Steph, just the next one.

So the work that we’re going to be presenting today is a summary of the infrastructure for Futures work that we developed in collaboration with the World Economic Forum and the Boston Consulting Group.  And really what we can expect from the presentation today is for us to share some of the global market sentiment around scenarios, you know, the survey that we undertook for 100 practitioners from around the world.  And some of the scenarios and the implications of some of those (inaudible) trends and also sharing some real world examples on how some of those potential trends might actually be applied in real life.

We hope to be able to stimulate some discussion around how some of these trends and ideas might actually apply to your context so I’m really keen to hear about some of the questions that you might have.

And I think the slides are a little bit slow in showing though so just bear with us for a minute.

So our agenda today is to talk very briefly about the introduction to the project and then I’m going to hand over to Steph to talk about our survey and the market sentiment on megatrends.  And then she will hand back to me to talk about the scenarios and some of the implications around the infrastructure.  And then I will give a few examples of how some strategies and policies that have been implemented in real life.  And then we will move to Q and A.

So you may be wondering why we went down the route the infrastructure (inaudible).  And I guess the Hub’s vision is really for a future where sustainable resilient and inclusive infrastructure (inaudible) people.  So you know, we’re really advocating for quality infrastructure because it does have the potential to have a long term effect on the economy and on the (inaudible) in general.

For us to be able to achieve a world where quality infrastructure is the norm, the transformation is (inaudible) entry and I guess what we mean by transformation is the way in which infrastructure is delivered.  So you know, it’s the ability for governments and the private sector to be able to create new benchmarks and best practices and then replicate it globally.  But you know, also for some of that transformative infrastructure to achieve some aspirational policy objectives when it comes to sustainable resilience and includes the infrastructure.

So you know, collaboration is absolutely critical for us in achieving that particular objective and we’re working in a number of themes or work across the Hub where, you know, collaboration is essential and we are looking to collaborate with people across the industry.  We acknowledge and best practice and research in this area to help us drive that particular objective.

And many of you may not know about the Global Infrastructure Hub so Kristel gave us a really good overview and we are a G-20 funded organization where our objective is really to help the G-20 drive that sustainable resilient inclusive infrastructure program.  We do that in three ways.

So the first one is we’re trying to encourage and mobilize more private (inaudible).  We are also helping the industry do more with less across the project life cycle.   And we would like to demonstrate that quality infrastructure can have a transformative economic (inaudible).  And we have five themes of work which I’ve listed there.  And that ranges from everything from investment all the way up to (inaudible).  But really, our work is focused on being able to create the evidence that can justify action and change.

We help facilitate that change by, you know, through networking and collaboration with our G-20 stakeholders and (inaudible) industry.  And a lot of the work we do around (inaudible) leadership is also about keeping in touch with the market needs and the market trends so that then we can be responsive to those market trends and create the relevant (inaudible) that are actually relevant to the market.

So the next slide, please, Steph.

I believe I might be handing over to you. 


MONICA BENETT:  So I will hand it over to you now to talk about the methodology.

STEPHANIE BARKER:  Thanks, Monica. 

So as Monica mentioned, we do hope that this report is only the beginning of the conversation on the future of infrastructure and how we can all work together in a collaborative effort to create a better and more resilient and more sustainable and inclusive world.

So we followed a three-step methodology to construct our scenarios.  The first step in which was to identify and prioritize megatrends.  And we ultimately identified a list of 25 megatrends which we believed would have the greatest impact on the infrastructure development over the course of the next 30 years.

We then conducted a survey of over 400 infrastructure experts from around the world to further prioritize and analyze global sentiment on those megatrends.  And I will go into more detail on those trends in just a moment.

This survey helped us to rank the megatrends according to three dimensions which were certainty, impact, and preparedness.  As part of this process we also conducted a workshopping session with the World Economic Forum, Global Future Council and Infrastructure.  Following this session we constructed our three possible scenarios describing the future these trends might create.

These scenarios are relatively extreme extrapolations of the current trends yet they still remain plausible and these will be presented later as Monica mentioned, along with the implications or the potential implications of these scenarios.

So we’re now in Step 3 of our methodology to create impacts through action.  And we hope to, through these sorts of conversations, to be able to prioritize research in areas for further work and investigation.  We also hope to test the ongoing resilience and evolution of our scenarios and the implications in a post-COVID world.

We encourage members of the infrastructure community and indeed the sort of broader community to investigate the potential impacts and implications of these scenarios and to take action to ensure that strategies and plans are resilient to the full spectrum of possible development.

I will (inaudible) back to Step 1 in our methodology which was to identify and prioritize the megatrends which you can see (inaudible).  To ultimately end up with this list of 25 megatrends we first contacted BCG Centre for Sensing and Mining the Future.  I should mention that BCG were one of our partners on this project, along with the World Economic Forum.

So we got in touch with BCG Centre for Sensing and Mining the Future which (inaudible) database of over 100 potential (inaudible) megatrends.  We triangulated these trends with others from the (inaudible) such as the World Economic Forum which produce a number of relevant thought leadership pieces.  Perhaps the most relevant to this work is their annual global risk report and also the world future society.

Next, we conducted interviews and held internal brainstorming and prioritization sessions to ultimately end up with this list of 25 megatrends and we finally sought feedback and validation on this list through the workshop we did with the World Economic Forum’s GFC (phonetic).

These 25 megatrends can all be categorized into one of the following five things.  You can see on the screen there, the first being society and workforce which largely comprises of trends to do with demographic shifts and changes in societal preferences.

Then it’s marketing customers and these are largely related to trade, supply and demand, procurement and financing.  We then have geopolitics and regulation which are pretty self-explanatory but are largely related to international spheres of influence and politics.

Technology is the next group of trends. And finally, we have sustainability and resilience which are more or less related to climate change and related developments.

The next step in the process was we conducted a survey whereby we had over 400 respondents with a really diverse mix between mature and emerging markets, and representation from all G-20 countries.  The majority of respondents came from the countries depicted on the slide there but we did have responses from about 70 countries in total.  And Canadian respondents accounted for 12 percent of the total mature market responses, which you can see was 65 percent of total responses.

Respondents came from the full spectrum of different organizational types and represented all organizational levels including quite a large number of CEOs and directors.  We had 27 Canadian respondents across all organization types with the exception of international organizations.  And there were 82 government respondents across all countries.

This diversity in respondents gave us quite forward access to a solid cross section of the global infrastructure community and allowed us to glean a wealth of insights from their responses.

So for each of the 25 megatrends the survey asked members of the infrastructure community for their views on three dimensions.  The first was the certainty of the direction and impact of each trend.  The second was the potential impact of the trend.  And the third dimension was the preparedness of the infrastructure industry to handle the trend.

For the purpose of generating scenarios, the most interesting megatrends are those that are high in uncertainty involving many possible futures, high in potential impact for the infrastructure industry involving potentially very different futures, and those that are (inaudible) for which the industry felt least prepared and involved potential future actions and policies that can make a significant difference.

This chart on the screen provides a snapshot of the entire dataset in one concise view.  It shows that on average respondents were mostly certain about the direction of the megatrends and whilst this is interesting, our focus for this webinar and indeed for the future work will be more centred on the other two dimensions for impact and preparedness as these two dimensions, when combined, can identify the trends which pose the biggest potential risk and therefore where we, as an industry, should focus our efforts. 

As can be seen from the chart, our survey respondents on average felt that infrastructure industry was rather unprepared for the future and I will break this down a little further in the coming slides.

These two charts show the average scores for impact and preparedness.  As I mentioned earlier, we will be focusing on these two dimensions.  And they show the average scores for these two dimensions across the 25 megatrends for both mature market respondents on the left hand side and the emerging market respondents on the right.  And each dot on the chart represents one of the 25 megatrends.

So we have preparedness on the vertical axis with the average line running across the screen.  And the impact on the horizontal axis with the average line running up and down the screen.  The higher the score, the higher the impact and the higher the preparedness of the megatrend.   So these lines break the plot into four quadrants with the bottom right quadrant presenting the megatrends with the lowest preparedness but the highest impact.  And in essence, these are the ones that pose the highest risk to our industry if we remain unprepared to address or to manage or mitigate them.

Overlaying the megatrends that our respondents felt they were least prepared for, you can see they are quite similar across mature and emerging markets.  The lowest preparedness score on average was that of climate change in mature markets on the left hand side there which had an average score of 1.93 out of 4.

The megatrends here are clustered in the sustainability and resilience and the geopolitics and regulation themes which were the two themes with the lowest preparedness overall.  And as you can tell by our position on the chart in that bottom right quadrant they also overlap significantly with the list of megatrends respondents selected as likely to have the greatest impact.  This suggests that sustainability and geopolitics are viewed as two areas in which further preparation may be required.

Now if you look now at the highest impact trends on the right hand side of the charts, these are the trends which present different potential futures from today.  Emerging and mature market respondents were both of the opinion that urbanization and population growth would have the greatest impact on infrastructure development.  Interestingly, the views of these two markets diverge on the trends which will have the next greatest impact.  Whilst you can see on the chart on the right for emerging market respondents, they were preoccupied with technology trends like the rise of green energy sources and internet (inaudible) senses and smart infrastructure.

Mature market respondents have focused more on trends like aging infrastructure, with the rise of natural disasters and (inaudible) infrastructure also featuring quite highly in terms of impact. 

We believe this difference likely reflects the degree of existing infrastructure in each market with the relatively (inaudible) nature of emerging markets leading to more of an emphasis on new technologies and financing with a couple of the financing trends also featuring highly in terms of impact whilst mature markets with extensive (inaudible) aging infrastructure were more focused on green issues and how to recycle, retrofit and make existing infrastructure more (inaudible). 

And while the rise of green energy sources and (inaudible) and smart infrastructure were there only technology trends, those in yellow on the right hand side, that ranked in the top five megatrends in terms of impact industry.  Technology megatrends overall were all ranked above average in terms of impact leading to that theme having the highest overall impact rating out of the five themes.

The trend with the highest perceived risk which is shown in these charts by having led preparedness and high impact was the rise of climate change.  This was also validated through a question we asked in the survey on the megatrend which would pose the greatest risk to infrastructure development, and climate change was also selected as the greatest risk.

So which megatrends did Canadian respondents think posed the greatest risk?  So Canada’s responses were largely aligned with the results shown on the previous slides.  We have overlayed Canada’s responses in yellow on top of the mature market responses from the previous slide.  Respondents from Canada also selected urbanization and population growth as the megatrend which would have the greatest impact on infrastructure development which is aligned with mature market response overall which you can see just here.

Next in terms of impact were rise of natural disasters and (inaudible) infrastructure, aging infrastructure, and the rise of climate change.  And again these were aligned with mature market responses.  You can see these two dots here which are slightly overlapping the rise of climate change and the rise of natural disasters dots for mature market responses.  And this dot under here is the aging infrastructure dot for mature market responses.

So I am now going to pass mic back over to Monica who is going to talk to you about how we used these survey results to eventually create our scenarios.

KRISTEL VAN DER ELST:  Monica, you’re on mute.

MONICA BENETT:  I knew that was going to happen.  Sorry about that.

So what we did was we constructed scenarios using megatrends that we saw as having the highest potential to shape the very different futures so we chose (inaudible) you know, what we called (inaudible).  So the first one is geopolitical context.  The second one is the pace of climate change.  And the third one is technological progress.  And we actually mapped around eight different scenarios across, you know, contrasting — across a range of different combinations, I guess, of those extreme determinants.

So of the eight we reviewed them to identify the three that provided, you know, the most extreme views because some of those scenarios, when you really broke it down and decided to develop a narrative around it were quite similar, so we actually chose what we felt had sufficiently contrasting views to provide a bit of colour to what some of the potential scenarios for the future of infrastructure might (inaudible).

So those three scenarios are the conflict of planets, the digital planets, and the green planet which I will talk to you about in a little bit more detail in the coming slides.

So the next slide, please, Steph.

So in each of our scenarios we developed a narrative of what the world could potentially look like in terms of infrastructure and so these scenarios are extreme, you know, but yet they are plausible.  And there would certainly be more than one interpretation of this planet scenario, but what we will do is we will start with the various scenarios and implications that we had in our report.  And I won’t go through this in too much detail as you probably can read the full narrative in our report if you really wanted to.  But what I will do is I’ll outline the key features in each scenario.

So in this scenario, all of the conflict of planets, you can see some of the extreme (inaudible) geopolitical context, the pace of climate change, and technological progress all on the left hand side of that chart there.

And in the conflict planets that is shown here, the main feature is really the increased political competition globally which drives much of the (inaudible).  And you know, this increased political competition basically has the effect of less sharing of knowledge and best practice globally which affects two main things, really.  And the first one is world (inaudible) climate change.  So a lack of global cooperation, you know, can lead to domestic climate policies that are essentially variable around the world rather than coordinated.  And this ultimately leads to regional climate inequality where some countries are more severely impacted by climate change (inaudible).  And you know, what happens is the world also lose the ability to leverage some of synergistic effects of coordination around climate action.

The second main thing is that increased global competition also hinders technology development and innovation.  So this not only has a detrimental effect on the country’s ability to fight climate change because there is a lack of technology, but it also leads to less productivity and economic growth.  So all in all this is a rather grim global outlook scenario that we’re heading towards.

Next slide, please, Steph.

Our next slide is the digital planet which is the complete opposite of the conflicted planet so as you can see by the three dimensions shown on the right there.  So in this scenario there is actually a high global cooperation which leads to the development of disruptive technology and (inaudible).  So this rapid development of technology essentially transforms the global response to climate change as technology now enables rapid mitigation and adaptation measures.

On the infrastructure front, there is also large emphasis on InfoTech which enables data to be treated as infrastructure.  So rather interestingly what this means is that data now has a value associated with it, very much like a physical asset, and its value is essentially derived by how effectively it can help you make better decisions around optimizing that particular (inaudible) asset.

So another really interesting feature of the digital planet is the rise of big tech firms as the primary agency for the delivery of infrastructure services.  And because technology is evolving so rapidly, large tech firms basically become the first response to market needs rather than government.  And you know, you could probably see some of the examples emerging at the moment like autonomous vehicles, for example, and ride-sharing scheme, or the use of unmanned aerial vehicles or drones for passenger travel which is still in the conceptual stages but that could become a reality.

Next slide, please.

And our final scenario is the green planet.  And in this scenario everything comes second to safeguarding the environment, and this is really what drives the global collective action around climate change.  Technology development here is incremental and all technology is now focused on achieving green outcomes rather than that of productivity and growth, so you know, it’s not (inaudible) nice and (inaudible) green sustainability and resilience.

There is a big emphasis on the circular economy and therefore there is the decline of development of green infrastructure projects.  And also the centralized utility model ends up being disrupted by the emergence of (inaudible).

Next slide.

So the scenarios and their implications give us a good feel for some of the areas that the industry needs to start thinking about and responding to.  And our scenarios are really designed to be able to stimulate some discussion across the industry to help test the robustness of some of the policies and strategies that are emerging.  And that’s especially important post COVID.

And if you move on to the next slide, Steph.

So since Steph and I have just spent the last 20 minutes talking about hypothetical (inaudible) and megatrends I wanted to finish this presentation by giving three examples of where policy and strategy have been developed and perhaps implemented to drive the idea of future.

So the three organizations presented here, presented at one of our other webinars on the infrastructure Futures, and I should also point out that your very own Kristel van der Elst was also a panelist in the webinar.  And she didn’t represent Policy Horizons at the time but she provided us her perspectives on alternative futures for infrastructure.  And I was going to include some of her comments in here as well but I thought it might be a little bit unusual if I were to relay her views while she is actually sitting on the call.  So I think, Kristel, (inaudible) share your views later on, (inaudible).

So the first example here is that of EBRD, or the European Bank for Reconstruction and Development.  And they have adopted a very strong culture and strategy for investing in sustainable resilient (inaudible) infrastructure with their clients.  And part of their strategy includes their transition impact qualities framework — and I encourage you to look it up; it’s actually really interesting — which basically aims to make the countries in which they work competitive, inclusive, well-governed, green, resilient, and integrated.

And one of the criteria that the bank implements is that they choose qualities from this framework to (inaudible).

The next example is that from the Royal Institution of Chartered Surveyors who are responding to a drastic shift market that remarkably has not yet been filled, and that is really the issue of the future of work (inaudible) as a result of rapid digital transformation.  So RICS recently developed a paper on industrialized construction and the future roles and new skillsets that might be needed to make this happen.  Ad they are currently working with government and academia to bridge this gap and (inaudible) skill sets, more specifically for the construction industry.

The next example is the Infrastructure Client Group in the U.K. which piloted the project for (inaudible) infrastructure delivery strategy which you may be familiar with.  So in a project (inaudible) is the set of best practice principles for infrastructure delivery in general, but a key element of this is also around data and digital transformation.  So they are working with a lot of private sector organizations so as government, to be able to create a standardized set of rules around data.  And the vision for a digital future is one where the industry moves from a transactional model to an enterprise model of (inaudible) which enables a much clearer flow of data from (inaudible) through to the ecosystem and vice versa which, you know, is a really critical essential component of having a successful digital future.

Next slide, please, Steph.

And so finally, another example is some of the work that the Global Infrastructure Hub has done in collaboration with the World Bank and the Saudi G-20 Presidency.  And this is on InfoTech.  So the InfoTech agenda which was recently endorsed by the G-20 is a policy guidance to advise the adoption of technologies and infrastructure.  And the role that we had under that was to develop an InfoTech use case library, and the aim of which was really to help raise awareness of what (inaudible) and what works with the goal of being able to help the industry overcome some of the barriers to technology adoption.

So the goal of the InfoTech agenda more generally is to stress the importance of technological solutions in achieving sustainable resilience and includes (inaudible).

And that brings us to the end of our presentation.  I think we’re going to Q and A but we are going to pause for three seconds.

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Policy Horizons | Horizons de politiques

Policy Horizons Canada, also referred to as Policy Horizons, is an organization within the federal public service that conducts strategic foresight on cross-cutting issues that informs public servants today about the possible public policy implications over the next 10-15 years.

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