Infrastructure decisions made this year will greatly determine the course of the world’s evolution over the next century, said KPMG, one of the Big Four accounting organisations.

 

Leaders will have to brush aside their differences and put collective interest at the top to ensure that the future is more equitable, productive and cleaner, said KPMG in its report, Emerging trends in infrastructure (2022). 

 

“Infrastructure leaders, particularly in the GCC region, have the potential to redirect the trajectory of upcoming infrastructure developments through future-oriented decisions that take into account long-term sustainability goals, embedding digital as an integral part of the infrastructure solution while acknowledging the primacy of users and their evolving needs,” said Imran Shaik Najeebuddin, Director, Deal Advisory, KMPG in Kuwait.

 

The report points out that the execution of those decisions will rely primarily on the four-fold approach comprising insight, agility, collaboration and bravery.

 

Ankul Aggarwal, Partner and Head of Deal Advisory, KPMG in Kuwait said: “The current uncertain times provide an opportunity for infrastructure planners to bring new perspectives into the sector and become more focused on stakeholder engagement, with the key themes being driving climate agenda, digital literacy, governance, evolving social expectations and ways to fund infrastructure plans.” 

 

The following are the highlights of the trends listed in the report:

Trend 1: Moving from talk to action

It is predicted that the race to net-zero will surge, leaving no room for infrastructure organisations to not participate in the pursuit. Owing to that, organisations may find themselves in a fix should they be unable to report their net-zero efforts. 

 

Additionally, the sector will look to invest in the direction of innovative technology solutions and recruit the right climate talent. Over the next year, it is expected that businesses may find themselves faced against insurmountable costs pertaining to the protecting, relocating, rebuilding and strengthening of infrastructure following governments’ and communities’ inability to safeguard essential services.

 

Trend 2: Building long-term in a short-term world

There is a dearth of new ideas, approaches, and models. Organisations will not only look to engage with stakeholders and communities on a broader level but also shift their focus toward becoming customer centric rather than procurement centric. 

 

The society and its needs are constantly changing, giving rise to new trends. To better gauge this gap between the stated and real societal preferences, businesses will leverage innovation in technology — particularly data and analytics. Despite that, there may remain some unanalysed uncertainties that infrastructure planners will need to address with an increased sense of trust and flexibility.

 

Trend 3: Maintaining control while encouraging agility

Governments, regulators and infrastructure players are anticipated to embrace governance. The report highlights that while this repositioning is expected to cater better to the society’s needs, it is not merely a way to control costs and mitigate risks. 

 

Instead, it is a means to facilitate better scope, delivery and management of projects. In addition, the regulation needs to be agile and flexible enough to accommodate the right measures to tackle any changes in the need or to fulfill unmet objectives. It is expected that over the course of the year, regulators and governance bodies may take up a more central role. Its goal would be to encourage value pertaining to the delivery and governance of infrastructure.

 

Trend 4: Making digital real

In addition to last year’s efforts, organisations are accelerating their digitisation endeavours. Businesses are utilising data, analytics and other technologies to better their planning cycle. They are not only embedding digital to procure new assets and services but also to improve their operational capabilities. 

 

Major players are scouting for ways to create more value vis-à-vis collection and management of data across a host of assets throughout their supply chains. The study found that infrastructure institutions will need to be accommodative of users who are unable to navigate the digital divide and tackle risks pertaining to cyber threats. It is expected that business leaders will embrace a holistic view of digital and look to think like a tech leader. 

 

Trend 5: Supply infrastructure, supply the world

There is a prevalent supply chain fragility among infrastructure institutions which is driven by their supply chain shortages, ranging from materials to talent. Players may invest significantly toward the creation of infrastructure assets. 

 

Additionally, they will need to address the constriction of supply chains to prevent the development rate from declining and costs from rising and ensure that the supply of government services is seamless. 

 

However, unlocking the global supply will depend greatly on how macro-economic trends such as rise of resource nationalism, resistance to offshoring, increasing demand for local offerings, etc., impact it. The report also stressed that to mitigate talent supply constraints and overcome the scarcity of fresh perspectives, infrastructure businesses will focus on becoming more diverse as a whole.

 

Trend 6: Toward a new ‘livable’

The pandemic-driven division of how people today want to live, work and play may be a cause for concern for infrastructure planners. They will need to take into account the different investments, assets and priorities required to meet the needs of the two segments that emerged from the bifurcation. In essence, they will strive to come up with solutions that cater to everyone. While radical changes are not anticipated, businesses will still need to be flexible enough to adapt to the change of use over the course of time.

 

Trend 7: Paying for it all

Owing to the scarcity of materials, costs are soaring — resulting in record-high government spending. Despite that, there are still numerous infrastructure projects that governments are keen on delivering. However, there may not be sufficient funds to finance the said projects. Governments are increasingly looking to shift tax brackets or implementing newer capital tax gains. 

 

They want users to bear the bulk of infrastructure costs but are concerned that it may result in a political backlash. It is expected that governments are highly likely to review their infrastructure funding plans and will make the necessary amendments to support their endeavours in the sector.--TradeArabia News Service