Emerging Trends in Infrastructure 2018.pdf

Emerging Trends in InfrastructureKPMG Internationalkpmg.com/emergingtrendsThe trends that will change the world of infrastructure in 2018.Viewed against the disruption, confusion and uncertainty of the past year, it would be easy to become despondent about the future of infrastructure around the world. Yet we see great opportunity and promise emerging. There is much to be excited about. Governments continue to demonstrate a strong desire and ambition to invest in infrastructure, both as a path to economic growth and as a way to hold back the rising tide of populism. New technologies and rapid innovation are creating new approaches, models and tools for infrastructure development and helping to bring down costs. The quest to identify new pricing and funding models offers the potential to unblock pipelines and unleash a new era of rapid development. And new perspectives on key issues such as sustainability, governance and investment are driving greater sophistication in many markets. A new dawn may be rising. Yet this is no time for governments, investors and developers to relax; great threats also loom on the horizon. The politics of the past year have grown more divisive and fractured in the West. Institutions have lost some of their legitimacy and public trust. And the gap between the ‘haves’ and the ‘have-nots’ has grown wider. Infrastructure players will need to redouble their efforts and their collaboration if they hope to deliver on the demands of their citizens and economies. In this year’s Emerging Trends, we have identified a number of issues and topics that carry both pros and cons. Technology could allow unprecedented progress… or it could fracture our societies further. Politics could lead to new visions and value… or it could become more divisive and isolating. Pricing and funding models could release massive investment… or they could beggar the poor and enrich the privileged. How accurate are our predictions? Last year, we forecasted that the rise of the populist agenda would slow the momentum of globalization in the West while the East consolidated power and pushed for greater regional collaboration. We argued that shifts in consumer behavior would change the way service providers prioritize their investments. And we predicted that we would see a greater confluence between energy, transportation and technology. #infratrends Emerging Trends in Infrastructure© 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.Richard Threlfall Global Head of Infrastructure KPMG International E: richard.threlfall@kpmg.co.uk @RThrelfall_KPMGStephen BeattyNon-Executive Chair, Global InfrastructureKPMG InternationalE: sbeatty@kpmg.ca@stephencbeattyJulian Vella Asia Pacific Head of Infrastructure KPMG International E: julian.vella@kpmg.com @jp_vellaSome of our predictions from last year have yet to fully develop. In that edition, we talked about the coming convergence of real estate and infrastructure within the investment market — a trend that has been slow to materialize but become increasingly important in its impact. We also expected swifter action on the impact investing and credit enhancement fronts. Not surprisingly, therefore, there are a number of trends in this year’s report that could be seen as a continuation of previous evolutions. At the same time, this year’s edition also highlights topics that are only now emerging and, we believe, will continue to shape infrastructure markets for years to come. We hope that this year’s report catalyzes infrastructure participants to think differently about the opportunities and risks we face today. We believe there is huge potential for great good to be unlocked. But, if we do not respond with vision and purpose, we may also be sowing the seeds of discord and division for future generations. The choice is ours. To discuss the trends highlighted in this year’s report, or to assess how the issues raised will impact your unique projects, markets and investments, we encourage you to contact your local KPMG member firm or any of the authors listed in this report. Lastly, a special thank you goes to James Stewart, formerly Global Head of Infrastructure, who helped author much of this document.Emerging Trends in Infrastructure#infratrends © 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.Trend 1The clash of competing forcesThis was supposed to be a decade of growing global harmony. Technology was going to break down barriers between societies. Social media was going to strengthen democracy. Globalization was going to remove distance between markets. And political stability was going to drive growth. Utopia was on the horizon. But reality has proven to be far different. ...