The infrastructure sector is among the last to embrace the potential of the digital revolution but it is in all of our interests to do so, says Richard Threlfall
It took less than five minutes to complete the process when I decided to open a new online bank account. Somewhere in the electronic ether, databases were cross-checked for my name, address, passport number, employment, credit score and other details.
No human was involved. It is a small element within the digital revolution in banking that we now all take for granted.
The infrastructure sector, however, is still a laggard in embracing the digital revolution; it is arguably the last sector to really exploit its potential. To be fair, infrastructure is difficult because it involves real and very complex things, unlike the world of money which, to quote Yuval Noah Harari, “isn’t a material reality”.
The enormity and diversity of the information that needs to be brought together to truly deliver infrastructure’s digital future makes it one of the world’s biggest challenges
In the Transforming Infrastructure Performance: Roadmap to 2030, published a few weeks ago, the scale of the complexity was laid bare. To make better decisions, the report says, “we need to be able to generate, process and share information not only about location, but also about assets, connections, natural surroundings, history, culture, economies and communities”.
The enormity and diversity of the information that needs to be brought together to truly deliver infrastructure’s digital future makes it one of the world’s biggest challenges. But it is not one that we can afford to shy away from, because the potential benefits are so vast.
Hence Infrastructure and Projects Authority CEO Nick Smallwood’s call to arms in the introduction to the roadmap: “I … challenge the industry to work with the government to grasp the opportunity … to drive the adoption of digital technologies and consistent data into the heart of our projects.”
What are those benefits? They fall into three areas:
First, increase in productivity in all organisations involved in the industry, but particularly in the construction supply chain. In The Value of Information Management in the Construction and Infrastructure Sector, published by the Centre for Digital Built Britain (CDBB) in June, KPMG and Atkins estimated potential direct labour productivity gains of between £5.10 and £6.00 for every £1 invested in information nanagement, and direct cost savings of between £6.90 and £7.40 from reductions in delivery time, labour time and materials.
Second, improved asset performance, which in turns drives economic growth. Because infrastructure is so fundamental to our economy – for example through the efficient movement of goods and people, quality of education and healthcare, and digital connectivity of businesses – it has a considerable financial multiplier effect outside of its own sector. The same CDBB report concluded that every £1 productivity gain in asset design, construction and maintenance would translate to an additional £3.70 in UK economic output.
Third, and in my view the most important benefit would be better outcomes for people, society and nature. Today, as the world grapples to avert the worst consequences of the climate change we have and still are inflicting on our planet, this matters more than ever.
Our ability to be more sustainable is critically dependent on our ability to collect, connect and interpret data across the entire ecosystem of infrastructure
It also means that the digital revolution and the sustainability revolution are not discrete, let alone in competition. Our ability to be more sustainable is critically dependent on our ability to collect, connect and interpret data across the entire ecosystem of infrastructure.
So how do we move as quickly as possible to unlock these benefits? There are many good initiatives referenced in the roadmap, some being driven by government itself, and others in the industry. But they boil down, I believe, to just two imperatives that we all need to seize:
First, to recognise the value in data and digital assets. Mark Enzer, head of the national digital twin programme at CDBB, notes that in the infrastructure sector balance sheets don’t record data as an asset: “We will unlock change when financial markets put a value on infrastructure data and information, which they implicitly do today for the data held by Facebook and Amazon.”
The government’s information management mandate is a nudge in the right direction, but urgently needs to be accompanied by the proposed information management framework, providing common standards for secure information sharing between organisations.
Second, to abandon our siloed, competitive mentality and recognise that we will all gain from sharing information across the entire ecosystem of the industry. Major infrastructure supply chains are already starting to adopt this approach, for example the port, shipping and logistics sectors are pooling data through port community systems.
The New South Wales government in Australia has recently announced the commissioning of a blockchain-based platform that will track the provenance of all inputs to a building and create a trustworthiness index. The digital twin programme envisages an even more hyper-connected future in which data can be shared across sectors to optimise, for example, the development and operation of a city; a future articulated most ambitiously by the Virtual Singapore project.
Data properly valued and then shared through interoperability between systems would allow the vision of the National Infrastructure Commission’s 2017 report Data for the Public Good to be realised. To quote the roadmap again: “We would be able to make better, outcome-focused decisions about how to optimise our infrastructure across the system.”
Smallwood has laid down the challenge, and it is the right one. Now it is for all of us in the industry to respond.
Richard Threlfall is a partner and global head of infrastructure at KPMG IMPACT