Although power was quickly restored, the Northeastern Blackout remains the largest electric failure in history. It also made clear that such failures, once a trademark of Third World cities, are becoming common in industrialized nations. The reason is globalization. As the world population grows and becomes increasingly mobile, it also demands more goods and services and consumes more energy. This is pushing existing infrastructure to its limits.

Within the next few decades, in addition to shoring up utilities, governments will need to invest billions in new roads, bridges, hospitals, airports and social facilities. While industrialized countries will focus on replacement infrastructure, emerging markets and developing nations will face extreme infrastructure demands due to the growth of cities.

GRAVITATION TO CITIES is one of the great trends of the modern era . By 2030, 61% of earth’s population is expected to live in cities. Consequently more megacities will emerge (those with 10 million people or more). By 2015, it is expected there will be 22 megacities (up from five in 1975) with 17 located in developing countries. To meet the demands of people in both industrialized and developing nations, massive investment will be required in the four key sectors of energy, water, transport and telecommunications in particular. Energy consumption in China still managed to increase by 6.67% year-on-year in 2008 despite the economic downturn. This underlines the demand for energy in developing markets. In 2006, the OECD Infrastructure to 2030 report estimated that China needed to invest $2 trillion in electricity production and distribution facilities until 2030. Yet, surprisingly, the United States and Canada could need to make investments similar to China (currently 20% of GDP). The main reason is failure to adequately maintain facilities and invest in replacement plants.

Only 0.01% of water available on our blue planet is fit for human use, and much of that is in the wrong place. Only 83% of people have access to clean water and 58% to sanitary facilities. As water availability worldwide has been falling since 1950, substantial investments are needed to ensure its availability – and not just for today. According to projections, by 2025 agriculture, industry and private households will need up to 40% more water to maintain living standards.

Investment is also necessary just to maintain existing infrastructure. For example, in London, where some pipes date from original 19th century installations, up to 50% of piped water leaks away. The OECD expects annual investments of more than $600 billion over the next 20 years in order to ensure water supplies. And wastewater disposal is also an issue. It is expected that by 2025, China will need to invest $200 billion, India $100 billion and the United States $150 billion to adequately deal with the problem.

The number of passengers passing through Beijing’s airport more than doubled between 2000 and 2006. While growth rates in the 15 largest airports in the world are lower (10–40%), the International Air Transport Association (IATA) expects that within five years, in Asia alone, 300 million more people will fly than currently.

Mobility is a central trend of modern life and aviation will play an increasing role, but roads will also be a key. Based on OECD figures, annual investment in road construction will rise from $10 billion to $70 billion by 2030 in emerging countries. Across the globe, almost $200 billion is spent each year maintaining existing roads and building new ones.

The impact of the Internet has only just begun. Whereas 70% of the population in the United States and 40% in Europe are online, only 10% of Asians can log in. Penetration is low so the annual growth rates are remarkable. In Asia, 20% of the level of current users is added each year. In Africa, where the Internet remains a curiosity, the figure is more than 30%.

THIS GROWTH REQUIRES substantial investment in telecommunications not only to provide broadband access to the Web, but also to supply a connection to the public telecommunications network. For example, only 25% of Chinese and 4% of Indians have a conventional telephone line. Some $100 billion is needed for new telecommunications capacity in developing countries in the foreseeable future. Most of this (55%) is required for new cable networks, satellite systems and mobile phone masts.

While the economic crisis may have distracted attention from infrastructure projects, global demographic changes and the continuing growth of cities mean such investments are essential and offer long-term potential. Indeed, as noted economist Jeffrey Sachs recently commented (“Dig for victory,” The Guardian, 22 March), a short sharp stimulus will not be enough to restore economic growth. “What is needed is an overhaul of the world economy to sustainability.”

In every part of the world, he argues, “there is backlog of vital infrastructure investments that need to be brought online to offset the decline in worldwide consumption spending that underlies the global recession.” More importantly, they are needed in the long term, because a world of 6.8 billion people (and rising) “simply cannot sustain economic growth unless it adopts sustainable technologies that economize on scarce natural resources.”

Published by PROJECT M in November 2009

(Photo: Tom Nagy/gallerystock)