7 Beliefs About US Infrastructure That No Longer Make Sense

US infrastructure is expensive because of the rules and regulations piled onto the infrastructure approval process - where NEPA documents are longer than War and Peace, and can take ten years to get through the review process - even for the greenest or most critical national security projects says: Norman Anderson

A lot can happen in ten years. Our infrastructure challenge, and the global infrastructure challenge, is as far from what it was ten years ago as you can possibly imagine. Try it though - imagine that ten years ago someone would have said that China will put 10,000 satellites into orbit in the next couple of years, building on their lead in 5G to dominate global logistics and communications, building their very own Skynet? The infrastructure challenges - and opportunities - we face now have nothing to do with what we faced ten years ago: they are different in quality; they require a new vision; and they are immediate, urgent. Digitization, electrification, planetary stewardship - and the binding constraint of $30 trillion in national debt - create a completely new economic reality.

We are facing a new world of possibilities - and possible outcomes - that smart business people, and a group of visionary entrepreneurs see clearly, while Washington’s thinkers, politicians and journalists are stuck in 2009. More highways and bridges… The visions that most of us see are different, hydrogen airplanes, driverless vehicles, industrial batteries base loading our renewable energy matrix, smart cities creating new sources of public revenue, huge education challenges and opportunities, and everything tied together by 5G/AI and Machine Learning that drives advanced manufacturing in this country. We don’t just see these visions - the stuff of Hollywood in 2009 - we know they are hurtling toward us.

Just as Cherry Point in the 1950’s no longer existed in 1968 - except for the constant danger from copperheads and water moccasins - our infrastructure challenges of 2009 are things of the past. That train left the station. Here are seven assumptions that seem embedded in our current discourse that are just wrong:

First, it’s all public investment. Actually nearly all of the new investment critical for economic growth and opportunity creation - new infrastructure, like renewable energy, smart cities, base loading the grid, autonomous and electric vehicles, and hydrogen - requires long-term private investment. There is more than $30 trillion in institutional funds - not new taxes, not new debt - that can be invested in our priority infrastructure. The public sector has a giant new role, guiding performance, and needs to step back from the role of investor - because it no longer invests.

Second, highways dominate investment requirements. Maybe, but where are people going to work in the future? and what about transit? The big demand globally is for clean water, and wastewater treatment… while the strategic demand everywhere is for digitization and electrification, especially of logistics networks. Highways are no longer strips of concrete and steel, but are smart platforms - for everything from 5G to fiber optics, hosting utility corridors and autonomous trucking. A coast to coast automated logistics system is in our future.

Third, the federal government funds infrastructure. Ah, no - that was your grandparents infrastructure. In 1980 roughly 70% of infrastructure investments happened through federal government transfers, today its only 25-30%. The states bear the burden of funding infrastructure, and it is both crushing them, and challenging them strategically. The federal government is the topper upper.

Fourth, U.S. infrastructure is prohibitively expensive because of the unions. Actually its incredibly expensive because of the rules and regulations piled onto the infrastructure approval process - where NEPA documents are longer than War and Peace, and can take ten years to get through the review process - even for the greenest or most critical national security projects. An average transit project is twice as expensive in the U.S. as in Europe, and ten times as expensive as in China. It’s the process, stupid.

Fifth, private investment is the same as private equity investment. No, and stop that! Private equity is a game of very high returns and rapid turnover; real infrastructure investment is thirty year steady, “stay and manage,” boring returns investment - your pension funds, and maybe a portion of your personal funds, so not the Wall Street Casino but Main Street value creation.

Sixth, we are building the same thing, just better. Think about it, why would we want the same thing? Our current infrastructure is neither digital nor electric, and shuttles money to China, and goods back across the Pacific to the U.S. That is how it is designed! We have a once in a generation opportunity to bring manufacturing home - the vision has to be enabling advanced, autonomous, logistics in this country, rather than rebuilding the system that imports everything from China. Our current opportunity - digitization and electrification - is incredible, if we seize it.

Seventh, the free market will get this done. Maybe, if there were a free market in infrastructure, but there isn’t - it is a Washington-controlled market, 84% ring-fenced from private investment. There are seven great ways to channel private investment into infrastructure, and that institutional investment will happen once the public sector is allowed to do its job - encouraging investment, de siloing decision-making, and taking risks. That’s not the public sector I know, you say? This is an infrastructure moment for strong and visionary leadership.

A conclusive fact - which I highlight in my book, Vision: Our Strategic Infrastructure Roadmap Forward - is that infrastructure initiatives are never evolutions, they are revolutions. They may play out over time, but you can see what’s coming - and when it comes it happens fast. My current visionary hero is Billy Mitchell, who clearly saw what was coming in terms of military aviation - and the requirements for massive innovation in the ecosystem of aviation - who was court-martialed in 1924 for his troubles, complaining to the press in frustration that inaction on the part of the Army and the Navy was an "almost treasonable administration of the national defense.”

Our future is incredibly bright, but only if we recognize that it is 2021, not 2009 - and that we urgently need a vision to organize and drive our investment strategy. This time is different, and we need to get it right.

This opinion piece was written for Forbes by  Norman Anderson Chairman & CEO of CG/LA Infrastructure, a firm focused on global infrastructure project development.

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