The dedicated Northern think tank IPPR North described ‘Infrastructure’ in their 2014 Great North Plan as “the vascular system of the economy, its veins and arteries, allowing people and goods to move quickly from place-to-place, allowing trade to flourish and accelerating business activity.”
According to a recent McKinsey Insights article, building and maintaining infrastructure can be a critical and even a lifesaving undertaking. A global example is sewage and water-supply systems; in the developed and developing world they vitally keep diseases such as cholera at bay. In a more literal sense, much of the Netherlands would be swamp and marshland without the North Sea Protection Works, which so effectively guard the country’s below sea level landscape.
Mega infrastructure projects can also be economically transformative. In South America, the Panama Canal accounts for a significant share of the country’s GDP, as well as providing billions to the global economy in terms of time saved when considering logistics and goods transportation. Dubai’s international airport accounts for 21% of the State’s employment and is the world’s busiest, accounting for a huge 27% of its GDP.
Further afield, McKinsey argues that Hong Kong would surely grind to a halt without its clean and speedy subway system, the MTR, which has enabled the densely packed city to build beyond the downtown districts.
McKinsey estimates that a global spend of approximately $57 trillion on infrastructure is needed by 2030 to enable the anticipated levels of GDP growth globally. Of that, they estimate about two-thirds will be required across the developing markets.
Closer to home, a major argument for High Speed 2 is the spin off economic development it will bring to the newly connected North. The same can be said for the ongoing Northern Powerhouse debate and HS3.
Last week the preferred bidders were announced to fund and construct the Thames Tideway sewerage programme. Even in twenty-first century London, infrastructure investment is vital to ensure public health.
Korinna Sjoholm leads the national Infrastructure Practice for Berwick Partners helping to recruit senior leaders across the sector.