Sustainable Infrastructure Development

Scenario Report

Jamie Balmer, Joseph Graham, Peter Hall, Athanasios Kourniotis, Ian Laidlaw, Martyn Link. Kate Matisons, Tara Schmidt, Jennifer Stone.

February 2020

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Key Question:

“How will urban infrastructure evolve over the next 15 years?”

We believe that the majority of infrastructure spending in the next 15 years is likely to flow into urban areas, and our view is that it is important to understand how this will drive the development of sustainable infrastructure. A team of infrastructure practitioners from across Wood came together in the Burlington, Toronto office in October 2019 for a two-day scenario workshop. Through using the intuitive logics scenario planning methodology it was determined that the most critical uncertainties affecting the future of urban infrastructure were around the ability of cities to generate wealth and release capital, along with the depth of society’s connectedness to data and technology. By plotting these two major uncertainties on a 2x2 grid we created four scenarios, each combining both elements either in a high or low outcome. The scenarios focused primarily on cities as the main driver of urban infrastructure over the next 15 years.

We thank the following people for your valuable contributions to the project:• Ann Massey

• Athanasios Kourniotis

• Brittney Drake

• Christopher Harris

• Darren Martin

• Dean Harwood

• Dennis Papillon

• Farah Sattar

• Jamie Balmer

• Jennifer Stone

• Joe Sczurko

• John McGill

• Karen Miller

• Martyn Link

• Nawar Chapman

• Peter Hall

• Ray Steege

• Shawn Allan

• Stephen O’Neill

• Stuart Gray

• Tara Schmidt

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Flecks

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Each of these ‘modules’ provides brief overview and analysis on key scenario drivers and contexts

Core narratives are stories which explain how the key drivers change the world over the next 15 years, with a

focus on infrastructure related context.

• Macro factors• Urbanisation• Finance• Leadership & infrastructure planning• Degree of proactive planning• Tech & innovation• Society• Sustainability & energy transition• Water• Utilities & services• Transportation• Outcomes

CORE STORIES(c.2000 words each)

‘DEEP DIVE’ MODULES(c.500-1000 words each)

DRIVERS & CONTEXT PRIMERS

LOW INFRASTRUCTURE FUNDING HIGH INFRASTRUCTURE FUNDING

HIG

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FLECKS• Global economic peaks and troughs• Constrained levels of finance available for infrastructure

projects • Big Tech evolves and digital adoption thrives• Society upended by technology; winners and losers• Virtual offices and decentralisation of production • Rate of urbanisation begins to slow as people begin to move

away from large cities to smaller communities• Societal shift to more communal and sustainable living.

BLAZE• Economic growth throughout 2020s driven by digital and tech

boom• Governments begin to take control of critical digital resources• Society accedes to deep digitisation; accepts loss of privacy and

control for economic growth and stability • Boom in digital construction and big data in infrastructure leads

to efficiencies which unlock new finance streams • Sustainability and resilience accelerate alongside a rapid energy

transition• Infrastructure project returns reach new benchmarks• Urban infrastructure is transformed with help of technology.

LOW

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EMBERS• Economic turbulence • Insufficient infrastructure financing markets • Overly bureaucratic infrastructure planning • Social resistance to technology and data collection• Slow energy transition; no circular economy • Increasing pressure on public services • Increase in the number of failing cities and widening ‘wealth

division’ between cities / regions• Proliferation of underdeveloped urban centres, slums and

underprivileged crowded cities in developing world.

BEACONS• Good leadership and infrastructure planning drive progress• Large-scale investment in urban infrastructure focused on

improving quality of life and tackling congestion and pollution• Society turns against digitisation and automation; heavy

regulation of digital and technology• Infrastructure projects rely on existing solutions; inefficiencies

remain• Moderate energy transition and worsening of extreme weather

events • Widescale changes in urban transportation • Huge drive towards resilience and sustainability in cities.

Scenario report structureThis report is split into two main sections. The first includes the scenario narratives while the second contains a series of related primers. Details can be seen in the diagram below.

Cities as engines of a sustainable, wealthy world

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By 2035 economic turbulence, increasing populism and a retreat in globalisation have all contributed to a relatively unstable world. The gap between infrastructure needs and spending has widened exponentially due to overly bureaucratic decision making, declining public budgets and private finance taking flight. There is huge pressure on creaking urban infrastructure. Most cities are jammed with polluting traffic and struggling to deal with waste. Society has largely reacted against pervasive technology and ubiquitous data collection. Big Tech has been broken up with digital assets and data now highly regulated by governments. The impact of climate change on urban infrastructure is overwhelming many cities ability to respond effectively.

Embers Scenario

Key elements• Economic turbulence

• Insufficient infrastructure financing markets

• Overly bureaucratic infrastructure planning

• Social resistance to technology and data collection

• Slow energy transition; no circular economy

• Increasing pressure on public services

• Increase in the number of failing cities and widening ‘wealth division’ between cities / regions

• Proliferation of underdeveloped urban centres, slums and underprivileged crowded cities in developing world.

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A glowing, hot coal made of greatly heated wood, coal, or other carbon-based material that remain after, or sometimes precede, a fire.

This scenario sees a world where investment and social cohesion steadily decline and there is little progress in firing up the mechanisms needed to drive sustainable infrastructure.

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Macro environment very challengingLooking back from 2035, the last 15 years have been a period of turbulent economic upheaval and the first retreat in the era of globalisation. Populism, nationalism and xenophobia were prominent influences in domestic and international affairs. Nationalism poisoned relations between countries. Much of the insecurity people felt was related to disruptive innovation and the changing economic landscape.

Throughout the decade resistance to globalisation steadily increased. Countries began to focus more and more on their own interests. Diminished trade, economic cooperation and fragmented innovation led to even slower economic development. Decreasing infrastructure investment led to further dampening of economic growth. The winners were the national corporate champions providing jobs, products and services to the local economy. In this world of insular mindsets there was still opportunity to be found for those capable of providing emergency interventions to rescue assets or real estate of national value. Premiums would be paid for emergency relief to shore up fragile infrastructure in the face of imminent breach – bringing a new meaning to the slogan “Just-in-time” service.

Spending on infrastructure decreases and gaps with requirements widenBy the mid-2020s many governments in the developed world are facing a public debt crisis. This has been brought on by continued rises in government spending due to factors such an aging workforce and economic stagnation. In many countries the situation has been made worse by loosening of fiscal discipline by the rise to power of populist politicians. Social changes see younger generations become more adverse to spending limited budgets on infrastructure. The developed world is in crisis.

Mirroring the situation seen in Southern Europe in the 2010s, increasingly Western countries are caught in a spiral of ever-increasing interest payments on past debt, alongside increasing spending, falling tax revenue, aging populations, greater unemployment due to automation and weak or flat economic growth.

In the face of this fiscal crisis, throughout the 2020s infrastructure was often the target of swinging cuts and deferments. It was one of the easiest targets for desperate governments. Countries in both the developing and developed economies paid insufficient attention to maintaining and expanding infrastructure assets, thus creating economic efficiencies and allowing critical systems to erode.

By the end of the 2020s, years of chronic underinvestment in critical areas such as transportation, water treatment and power grids are catching up with countries around the world, as is resource misallocation in many past projects.

The shrunken government and municipal infrastructure budgets are largely spent on reactive measures in the face of mounting problems – fixing failing existing assets or dealing with damage caused by climate change related events such as flooding, drought or storms. The result was epic traffic jams, bottlenecked ports, blackouts, deteriorating dams, and tainted water supplies.

The sum of these problems sees the long-standing urbanisation trend begin to reverse as people seek to escape the pollution, gridlock and social problems of decaying cities. In the developed world there are many more cases of ghost-like failing urban areas. This has created an ever widening wealth divide, with the majority of cities and urban populations stuck in a cycle of stagnation and failure. In the developing world there is a similar dynamic. There is a proliferation of underdeveloped urban centres, and a massive growth of slums.

External finance takes frightThe global economic malaise over the last 15 years was not the only factor putting pressure on infrastructure funding. Throughout the 2020s there was continued and widening major disconnect between infrastructure projects desperate for capital and institutional investors (such as insurers, pension funds, and sovereign wealth funds) seeking opportunities to invest. Municipalities and governments struggled to find a way to unlock this capital.

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The rise of populist politics and parochial leadership compounded the problem further. The right setup and structures were simply not put in place to improve the case for attracting private capital to infrastructure projects. This was despite the increasing urgency for governments to circumvent tight budgets. Economic volatility and stagnation meant that institutional investors were increasingly desperate for stable, long-term, inflation-protected returns to match their obligations. However, state and city leadership did not deliver on meeting the necessary requirements.

Myriad problems continued to plague infrastructure finance markets. Municipalities and governments lacked sufficient resources and effective mechanisms for developing concepts into well-prepared projects with solid economics. Long planning and approval cycles and ineffective decision-making frameworks worked to erode returns on projects. Early stage concept development complexity and cost in terms of stakeholder involvement, legal opposition, or lengthy review and permitting turned investors away.

Into the 2030s, capital markets for infrastructure assets remain relatively complex, non-standardised, and illiquid. Many expected public private partnerships to solve the problem. However, in many places, PPP and/or privatisation was met with a large dose of political scepticism and this dynamic became worse as economies stagnated.

Technological disruption stokes troubleDespite the economic and political tumult that characterised the global investment environment through the 2020s, initially technological innovation and advancement continued. To a certain degree, it was driven harder by the difficult market conditions which increased the need for cost savings and efficiency. Unemployment became a perpetual challenge in many countries as companies became increasingly fixated on minimising costs and maximising flexibility. Unexpectedly, this led to a surge of advances in technologies that allowed companies to automate and streamline their operations.

Some winners emerged from this upheaval. However, there were many economic losers and people and governments struggled to adapt. The backdrop of economic turbulence made the adaptation process even more difficult than in previous periods of disruption from innovation.

The gap between rich and poor grew wider as wages continued to be squeezed while income from capital and investments grew only sporadically. Changing terms of employment and income exacerbated fear among consumers that bled into the broader economy, perpetuating uncertainty and a lack of confidence about where markets and industries were headed.

Against this backdrop of economic disruption, there were a growing number of major data breach incidents. The use of social media by politicians and governments increased

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exponentially. Online misinformation proliferated well beyond what was imagined possible in the 2010s. Corporations antagonised people by making huge profits from the use of personal data – often ‘stolen’ through the use of unauthorized microphones on personal devices such as phones and smart speakers in the home.

Society and government fight back against Big TechFrom the mid-2020s, huge anger in societies built up against Big Tech. Fear of automation replacing people in the workplace led to the rise of opposition to new technology. Critics began to win the argument that an open digital network economy is unstable and prone to misuse and that Big Tech could not be trusted. Governments continued to struggle to adapt to digitally enabled ways of working and bowed to societal pressure to begin a ‘fight back’ against what they saw as the damage done by rapid digitisation.

As a result, by 2035, work often remains more traditional than some had anticipated. Use of artificial intelligence and robots is constrained and limited only to certain functions. Algorithmically derived insights are used to complement human decision-making but people always make the final decisions. Robots are used only for tedious or dangerous tasks. Because of privacy and security concerns, there is strict regulation of the sharing and use of personal data including video and speech. People still continue to improve their lives but are much more selective about which technologies they use. There is a big focus on privacy – which has become a huge social issue. Technology companies have been broken up and are bound by strict regulation.

Energy transition stuck in the doldrumsBy 2035, the hoped-for energy transition has stalled indefinitely. Energy consumption patterns have not shifted substantially since 2020. Meaningful efforts to curb emissions continue only in regional pockets. Significant step changes in energy technology have been hampered by major and prolonged global economic struggles and a lack of international coordination. While gas and renewables are now the primary fuel of choice for power generation in the developed world, in the developing world, economic hardship has driven a resurgence of coal-fired power generation. Climate related problems are becoming ever more prevalent around the world. Extreme weather patterns are causing chaos, while migration and conflict are increasing rapidly.

Not very smart cities do not embrace sustainabilityBy 2035, the constraints around infrastructure finance, backlash against technology, lack of effective decision making and generally poor economic conditions have led to a lack of progress in utilisation of smart technologies in cities. The sustainable city concept has been largely buried underneath a profusion of problems caused by unplanned, rapid urbanisation and insufficient funding. Where efforts towards sustainable cities have appeared, this has been in small pockets where good leadership and governance pro-actively planned the implementation.

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Energy landscape remains the sameIn line with the wider lack of progress with the energy transition, by 2035 the energy infrastructure landscape in cities is largely the same as that seen in 2020 – albeit with more problems. There is a continued reliance on fossil fuels and only limited additional deployment and adoption of renewables. In the developing world urban pollution levels are completely out of control. As a result, schools and offices are regularly closed and hospitals full of respiratory cases due to severe air pollution. Many people are choosing to leave affected cities to escape the fumes.

Energy efficiency has generally improved as a means to save money in the face of economic challenges and as a result of incremental replacement of older, more inefficient machinery and equipment. However, this is more than offset by increasing use of air conditioning and heating throughout the developing world.

By 2035 huge gaps have emerged between power demand and electricity grid capacities. Lack of electricity infrastructure investment and delays in replacing older equipment has led to chronic problems. Rolling blackouts are common in many developed and developing countries.

Transportation fails to move forwardAdvances in urban transportation has been a huge disappointment over the last 15 years. In 2020, the expectation was that urban centres would become largely combustion engine free and there would be a shift towards

autonomous unmanned vehicle (AUV) zones. None of this has happened.

Instead, economic downturns, the backlash against technology, poor planning and lack of access to finance has led to a continued reliance on the same types of infrastructure. There is now limited use of smart technologies, very little use of AUVs and a large gap between transportation needs and demand.

By 2035, city centres are often grid-locked, clogged with vehicles powered by combustion engines. Rail stations are jammed with passengers waiting for overcrowded trains. Diesel buses clog intersections. Regulation and unions have forced the closure of Uber (and similar enterprises) in many cities in favour of more traditional taxi services. Some cities are bearing the fruits of large investments in mass transit rail systems. This, however, is largely concentrated in China and India. In the developed world, where investment has been made services are often extremely expensive. Governments have largely had to remove transportation subsidies as a result of fiscal tightening.

Despite the demise of globalisation, air travel has continued to grow, driven in particular by demand from Asia, where a huge airport build-out has continued due to the high priority placed on this by governments. Airports in the developed world are overcrowded and degrading, generally suffering from lack of expansion and/or investment. Plans for upgrading or improvements generally stall due to funding issues or protests.

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The retreat of globalisation and generally muted economic growth seen through the 2020s has led to a fall in trade volumes. This, in turn, has meant that the widespread build-up of port facilities seen through the previous decades has ensured that there is not a huge demand for further capacity build-out. By the end of the 2010s there had already been a shift towards use of robots and AI in freight handling. This continued to a certain extent, although by 2035 most governments have regulations in place to enforce minimum employment criteria – which has acted to stifle further advancement in this area. Robots are only used for the most dangerous work.

Dirty water By 2035, a lack of investment in water infrastructure along with the underlying trends of increasing water scarcity and pollution has seen water become one of the most critical problems facing cities. There has been a chronic underinvestment in new water systems and solutions. At the same time, ongoing rapid urbanisation has seen water demand surge. Unplanned urbanisation in developing countries has seen sanitation problems escalate exponentially, exacerbated by ever more severe climate change related weather events.

Many developing world cities are unable to provide even basic sanitation or fresh water supplies to inhabitants. Many rivers in the developing world continue to be so contaminated that they are unfit for human consumption and considered unsafe even for swimming. Water has now become a key factor in ongoing geopolitical tensions. Several small-scale wars have been fought over access to rivers and lakes. As the earth heats, it is widely expected that this issue will only escalate further.

Waste piles upOver the 2020s waste problems built up exponentially due to bad planning and lack of funding to improve infrastructure. As people moved to cities and income levels in developing countries increased, ever greater amounts of solid waste were produced. The circular economy concept has failed to make significant headway. Good waste management became more and more expensive making it more difficult for many cities to find sufficient funding to tackle the issue.

By 2035, many cities in the developed world are struggling to provide adequate core services such as solid waste management and street sweeping due to budget constraints. In the developed world continued urbanisation has been a major contributing factor to this problem. Unplanned urbanisation has seen waste management in developing cities become underdeveloped, inefficient, and inadequately managed. The majority of waste continues to go to landfill or dumps rather than recycling. These inadequate waste solutions remain a key contributor to methane emissions, disease, water and pollution problems.

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By 2035 deep digitisation and ailing urban environments has led to huge societal upheaval. The limited money available is increasingly being consumed by preserving an aging asset base or repairing damage from climate related events. The long-standing urbanisation growth rate has retreated.

The high cost of living in large cities, widespread virtual working and decentralisation of production is encouraging people to move to semi-rural communities. There has been a shift towards a more communal and sustainable form of living.

Key elements• Global economic peaks and troughs

• Constrained levels of finance available for infrastructure projects

• Big Tech evolves and digital adoption thrives

• Society upended by technology; winners and losers

• Virtual offices and decentralisation of production

• Rate of urbanisation begins to slow as people begin to move away from large cities to smaller communities

• Societal shift to more communal and sustainable living

Flecks ScenarioA very small patch of colour or light.

This scenario sees a world where investment is lacking, but people generally embrace technology and share data to improve their lives.

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There has been a dramatic integration of technology into people’s everyday lives. Society has broadly accepted the sharing of personal data in order to get access to technology and consumables. Free digital devices have been distributed en masse throughout the developing world in return for access to data. Mass human data interfacing has transformed human interactions. New sustainable communes now self-finance through charging for sharing of their data.

Economic rollercoaster flatlines infrastructure spendingThe last 15 years have been a rollercoaster ride for the world economy. One moment high, the next speeding back towards the ground. Once you had your bearings on where the world was headed—or at least thought you did—the world economy and energy markets would suddenly shift the other way. The steep peaks and valleys of economic growth during this period contributed further to a sense of imbalance and loss of perspective as the global investment environment spun in unexpected ways.

There were a number of good years over this period but the ever-shifting landscape exacted a toll on the confidence of businesses and consumers around the world. Confidence and stability never fully returned after the Great Recession of 2008–09. Indeed, decades of volatility and change have entrenched a singular and hazardous focus on short-term results and benefits as the primary drivers of economic and political decision making.

Despite the turbulence, prosperity and wealth did rise for many people around the world. But the peaks and valleys were unforgiving for those caught flat-footed. Technological progress created new companies and industries and transformed the way that we live and work. But the price that has been paid is reflected in part by the number of unemployed or underemployed workers in developed and emerging-market economies across the world and in an ever-yawning gap between rich and poor.

Under this uncertain and competitive environment it was harder for countries, cities and companies to raise capital. Greater risk meant that financial institutions were more averse to invest in infrastructure that had a 10+ year payback when there was no certainty around what would happen next. This acted to suppress much discretionary spending that had been in the pipeline.

Big Tech evolves and digital adoption thrivesDespite the highs and lows of the 2020s, Big Tech had already made enough progress to become a seemingly unstoppable juggernaut. In addition, the economic turbulence made the cost savings on offer from technology more attractive. In reaction to the challenging new business environment, new business models, new strategies, and

new companies emerged. Artificial intelligence, advances in robotics, and ever-increasing computer processing power were vital ingredients. Whole sectors of the economy were upended, from education to manufacturing to medicine.

Personal technology soared in computing power and interactivity. New entrants such as Brainz and Mindfool broke new ground quickly cannibalising market share and customer loyalty from the complacent Apple and Amazon. Competition in the rollercoaster economy was fierce and the winners were more affordable, personalisable and nimble neo-tech companies. Consumers formed personal tech eco-system that they individually created for their own needs and personal tech image.

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A seminal moment occurred in 2025 when Facebook and Apple merged, heralding the creation of FacePad. By 2030 user stats rose to 87% of the planet’s population as they pioneered the use of “digital drops” – airdropped packages of phones powered by solar power during the day and with wind up ability at night that were given away for free. Anyone who agreed to sign away their personal rights and let the company use their personal data could log on. A drop of blood and a fingerprint activated the reader. The results were phenomenal – uptake of 79% in many African countries as whole communities entered the digital era in the space of a few days.

This mega-hoarding of the planet’s human data led to the creation of the first ever real-time, mass human / data interface. Not only could Face-Pad see into the lives and bodies of over three billion humans and – through strict data sharing corridors – individuals could also see into the lives of each other. When combined with the new eco-system of tech rivalry, consumers became more and more comfortable sharing ever more personal data, as cybersecurity and digital protection became second nature to every Millennial – now the major decision makers and influencers. When viewed at a city level this sharing of data created “social swarms” – massive movements of people and data towards, or away from, areas of high interest.

Deep digitisationBy the time the 2030s had arrived, it felt like deep digitisation has already disrupted almost every facet of life to some degree.

3D printing and automated production had shortened manufacturing supply chains, reducing demand for container shipping as more goods were produced near the point of consumption. Digital technologies using vast banks of real time data are tracking and pricing the usage of roads and public transit systems in a more accurate and convenient way than ever before. This provides an accurate assessment of traffic volumes and modes as well as providing a more accurate reading of the demand for new infrastructure.

E-commerce has changed demand across logistics networks and drone deliveries are now standard, reducing traffic and demand for road infrastructure. Many universities are selling off buildings or closing because of disruptive competition from internet-based further education.

3D printing led to the proliferation of millions of micro factories—including many in garages, extra bedrooms, or repurposed warehouses. Advanced robotics allowed many companies to reverse the trend of “offshoring” manufacturing to low-cost labour countries and instead build highly automated factories in or near demand centres in their key markets.

Healthcare has been transformed. In return for sharing their data, local communities are able to get the benefits of the herd effect – better access to creative solutions and improved problem solving; shared property and stronger

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defense. By sharing physical metrics healthcare improved dramatically as community nurses, supported by advanced diagnostic devices and preventative medicine began to anticipate rather than react to medical emergencies. Due to the communal living and real time collection of personal health data, each nurse could cover hundreds of people each. Biometric algorithms predicted the onset of a heart attack 30 seconds before the attack by tracking fractional changes in blood pressure, heart rhythm and physical exertion – allowing just enough time for prophylactic self-medication. Nurses became the best paid members of the community as they were one of the few people allowed total access to the full suite of data being collected. Criminal detectives and political leaders were allowed only a fraction of the data being tracked by nurses.

The 2030s also saw a revolution in wearable tech, which enabled people to anticipate physical or digital attack via audible or visual cues using real time analytics of mass data flow. Cyber-attacks became everyday occurrences and often more harmful than physical attack. Personalised tech enabled people to avoid hazardous locations where suspicious movements had occurred moments earlier, as well as pre-empt cyber-attacks by powering up extra strong jamming signals using blacktooth harmonics.

On the positive side, this deep connectivity also meant that no one in a community of many hundreds of thousands of people was a stranger. Face-Pad analytics constantly roamed the faces and servers of the people passing in the street and looked for areas of connection. Two people with more than 15 mutual friends or 5 shared interests were automatically notified as they walked towards each other. This ability, using an App called Kindling became an instant hit and became the strongest predictor of relationship success with a new partner. By 2035 people began experimenting with arranged digital marriages where surveys by friends and family were inputted into community datasets to identify the optimal partner.

A new perspective on social mobilityWhilst personal health, safety and security began to improve, the cornerstone of city attractiveness – namely career development and social progression – began to unravel. Times were changing fast and many could not keep up. The economic uncertainty combined with deep digitisation meant society began to shift and restructure as a result. Tech-savy consumers no longer relied so heavily on the government to solve their problems, whilst the elderly, infirm and those on the margins of society struggled to adapt. Governments were unable to provide the kind of services and safety nets that could better enable a larger number of people to retrain or gain the education needed to transition. As the gap between rich and poor grew wider, and the very nature of work evolved to ultra-flexible working economies, the independent and entrepreneurial began to out-grow the 20th century attraction to mega-cities.

Large cities become less attractiveThe 2020s saw a number of factors converge which made large, densely populated cities become less and less attractive in comparison to living in smaller communities.

Tightening fiscal budgets saw the infrastructure spending gap widen throughout the 2020s. Existing infrastructure was aging and smaller budgets say the focus changed from building new assets to preserving what was already there. At the same time, an increasing proportion of city budgets was taken up with repairing damage from climate change related weather and natural disasters. Cities located on flood plains, near the coast or in close proximity to forest fire zones were most affected and many began to struggle in the face of mounting costs. Widespread water shortages and surging energy demand in large cities caused utility bills to soar.

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The advent of deeper digitisation and rapid development of technology enabled a widespread decentralisation of production. Labour started to become increasingly de-clustered with fewer corporate employees working in offices and more home-based free agents providing services such as financial planning, insurance, graphic design, and consulting over the internet. This, in turn, has made geographic location and transportation links less important.

Even in the early 2020s a decent standard of living had become unaffordable in many densely populated mega-cities. Only the very wealthy could afford to have more than one child and live comfortably. Most people did not want to live in high density urban areas only able to afford a small living space. The dislocation of labour caused by technology only served to increase the affordability gap.

As a result of these factors, people increasingly began to leave expensive cities for smaller conurbations or the rural countryside. Free-agent knowledge workers and their families began to disperse across the map, with many of them fleeing overcrowded megacities and infilling more sparsely populated regions in search of a higher, more affordable, standard of living.

The new ‘semi-rural urban’As a result of this move away from larger cities, new communities began to spring up that blurred the traditional boundaries among rural, city, and suburban areas. With super-fast broadband internet access and advanced telecommunications links to the rest of the world, inhabitants of these semi-rural villages are able to do business without the need to commute to a major city, and they are conveniently close to sources of food and energy.

Inhabitants of these communities are able to own spacious houses in a rural setting, whilst enjoying the same economic opportunities and cultural amenities of urban areas due to deep connectivity to technology. People have everything at home, including remote working, remote learning, online retail, and virtual games and entertainment. Aside from a few exceptional shared experiences in the city, such as major concerts or sporting events, these out of town communities continue to flourish, primarily through social networks.

Education and work is now mostly conducted online as virtual reality meant that VR classrooms and offices became indistinguishable from the real world, and much more flexible. The very idea of a commute is fast becoming nostalgic. Only emergency services still had to travel to do

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their jobs. Robotics revolutionised industrial farming, 3D printing de-bottlenecked local manufacturing and supply chains become as close to circular as feasibly possible.

Rejuvenation of rural townsAs waves of connected, informed, relatively wealthy individuals leave cities, they begin to stimulate the local towns with fresh thinking and personal wealth. As a result many of these towns begin to be characterized by a sustainable mindset, pooling infrastructure and producing their own food, energy and water. As a result a greater degree of autonomy and self-sufficiency begins to take hold of the infrastructure planning and the decision-making processes. This allows better sustainability decisions to be made, which apply to a local context in a more relevant way. Local firms diversify into new markets and many grass roots businesses flourish as people look local for their goods and services.

Typically communities ban building in flood and fire zones and use trees and shade to minimize the urban heat-island effect. Water and electricity are priced to encourage efficiency and conservation. Sustainable agriculture is developed close to city hubs to limit transport, encourage 100% food security and to allow residents to enjoy nature. Less water intensive crops are encouraged.

Communities tend to be arranged as a series of urban regional hubs connected by local rail and bus lines. National transport infrastructure budgets prioritise high speed rail links between regional clusters communities. Shared ownership autonomous vehicles are increasingly used for local journeys (which are less frequent).

Biomass, wind, solar and geothermal energy are the preferred means of energy generation. Enough power is produced within or close to the towns through micro-grids to enable self-sufficiency. Buildings share energy resources, generating as much energy as they consume. Solar panels incorporated into all surfaces of the building’s facade during construction capture the sun’s energy. Lighter and cheaper bladeless wind turbines on building rooftops provide supplementary energy.

Water use is carefully monitored and stratified into different levels of quality. The amount of waste produced decreased due to re-use or recovery (e.g. composting). Community residents take ownership of running communal facilities. The population lives in harmony with nature and utilises natural transportation like walking and cycling, or canals and rivers wherever possible.

The boom and bust economic cycles and greater societal concern for the environment drives the development of local circular economies. A general reduction in consumption and more production of goods locally has generated new business models and encouraged direct relations between producers and consumers. Business takes place via short supply channels, second-hand products are strongly encouraged, and recycling becomes standard, as some people’s waste becomes other people’s resources.

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By 2035, de-layered decision making and rigorous project planning has unlocked huge new sources of finance for infrastructure. Large scale transportation, sanitation and projects have transformed the way millions of urbanites live. Cities have embraced resilience and sustainability in the face of ever more extreme climate related weather and disasters. However, progress has been curtailed by society’s suspicion and fear of digitisation and automation. Big Tech is now subject to heavily regulation and scrutiny. Jobs are protected from automation. The use and benefits of digitisation and technology in infrastructure have often been tied up in red tape.

Key elements• High levels of infrastructure finance available

• Good leadership and infrastructure planning drive progress

• Large-scale investment in urban infrastructure focused on improving quality of life and tackling congestion and pollution

• Society turns against digitisation and automation

• Governments heavily regulate Big Tech and data use

• Infrastructure projects rely on existing solutions at greater scale; inefficiencies remain

• Moderate energy transition and worsening of extreme weather events

• Wide-scale changes in urban transportation

• Huge drive towards resilience and sustainability in cities

Beacons Scenario A beacon is an intentionally conspicuous device designed to attract attention to a specific location.

This scenario sees a world where investment is unlocked, but people are generally resistant to sharing their personal data or embracing technology.

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Prosperity and stability drive population growth and urbanisationFollowing the relatively moderate economic conditions experienced throughout the 2010s in the wake of the financial crash of 2008, the world’s economy experienced a surge of growth and prosperity throughout the 2020s and into the 2030s. Growth was driven by a strong pickup in the Asian economic superpowers, China and India. This, in turn, was propelled by a softening in geopolitical tensions as a new generation of more moderate politicians came to the fore in major Western economies. These favourable economic conditions drove continued high population growth and increasing urbanisation.

Growth puts pressure on citiesIn the early 2020s, the rate at which the global population moved from rural areas to large cities challenged the way that economic development progressed around the world. Traffic, congestion and pollution began to make urban life unbearable. In addition, extreme weather and climate change were beginning to cause serious disruption. In many cities these issues were becoming a danger to health and a serious impediment to economic growth.

A new generation of leaders emergeFrustration began to mount. Through the first half of the 2020s this led to turnover of city governments and waves of reforms. The need to find ways to preserve their economic base and quell growing social unrest became a vital political goal for civic and national leaders. Leadership had to be effective to stay in government. Voters demanded an end to traffic jams, pollution and increasing disruption and damage from extreme weather. Improving the quality of life in cities, and providing effective resilience against climate related weather events, became the focus of municipal leadership, supported by national and regional government.

Better leadership and planning unlock infrastructure financeThe emergence of more effective politicians focused on achieving improvements, moved the dial towards better leadership and more proactive urban planning. Politicians began to pro-actively work towards finding solutions that could substantially increase investment in public urban infrastructure. As the economic boom continued through the 2020s, governments were less likely to cut infrastructure budgets.

Progress was made towards attracting higher levels of corporate finance for public infrastructure through more stable and attractive regulatory models. This included the creation of instruments that demonstrated risk-value returns. There was more clarity on policy issues. Cities also worked with companies to enable them to build

infrastructure that provides new markets for them and enabled infrastructure (e.g. 5G networks).

The development of better project pipelines became a key priority for municipalities, which helped improve the build out and financing of infrastructure. National infrastructure plans and project pipelines were published to give investors transparent long-term visibility. Concept development and project preparation was improved by making processes simpler and introducing venture fund structures or early concept development units.

In addition, regulatory and investment framework impediments were removed to improve access for institutional investors. Infrastructure was developed as an asset class and public accounting standards were brought in line with corporate accounting so that infrastructure assets were depreciated over their life cycle rather than adding to deficits during construction.

Revenue optimisation became a key element. Governments and municipalities began to increase funding steams by raising user chargers, capturing property value, selling existing assets and recycling the proceeds for new infrastructure.

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By 2035, infrastructure finance is booming across many part of the developed world, and the infrastructure investment gap is steadily narrowing. Pension and insurance funds are investing heavily in infrastructure. Previously unattractive, infrastructure now provides a more attractive proposition to match against liabilities. Many of the physical infrastructure needs of rapidly expanding cities are provided to municipalities at low cost by large global concession operating companies.

New importance placed on policy and planningThe benefits of visionary leadership enable some cities to push ahead of their counterparts cities around the world. Authorities seek to foresee stresses and implement solutions. Planning is integrated for land, transport, energy, water, and waste planning. Emphasis is placed on structural energy-effective solutions, including compact city development and public transport. Knowledge is shared and valued.

The majority of cities use availability of finance to carefully plan regional development and engage in major works programs. Vertical skyscrapers are developed to save space. Increasing urban density is accompanied by proactive functional and social diversity, including mandatory social housing quotas in every project. Cities also renovate building stock in order to reduce consumption. Space for parks and recreation is seen as a key priority. Where possible, land for heavy industry and farming is placed away from the dense city centres. Collective transportation is prioritised ahead of cars.

Too much money has its downsidesThe effects of unlocking infrastructure finance are not entirely positive. In many ways throughout the 2020s the overriding characterisation of infrastructure projects was ‘more of the same, but bigger’. There is a feeling that a lot more could have been done to revolutionise infrastructure projects. Unnecessary and wasteful inefficiencies remain. Bloated budgets mask problems and a general failure to push boundaries. Often new innovations in project design were overlooked in favour of the tried and tested.

Society turns against Big TechIn the 2020s societies around the world come to see open digital networks economies as unstable and prone to misuse. Growing incidents of data breaches and misinformation result in suspicion of digitisation. Corporations antagonise people by profiting from the use of personal data. Despite these concerns, many people continue to use digital technologies to improve their lives, but they increasingly require it to be on their own terms. Protecting privacy becomes a major concern for many. Imposed limits on data sharing hold back advances in machine learning. Governments struggle to adapt to digitally-enabled ways of working. Fear of automation in the workplace leads to the rise of opposition to new technology.

Beacons Scenario

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By 2030, Big Tech has been significantly constrained as a result of widespread government regulation. Action is taken to protect individuals’ privacy – through local regulation, taxation, mandates, break-ups and take-overs. Corporations are often forced to make their data available for official use. Privacy and security concerns dictate that the sharing and use of personal data including video and speech is strictly regulated.

Sustainable materials begin to become standardAs society largely turns its back on the digital infrastructure interface, in the leading cities, the idea of a smart building is replaced with a truly clean building. Iconic new builds strive with each other to be carbon negative, water and waste neutral, through innovative designs and blending of natural and man-made materials. People seek out these new urban eco-systems to raise their families and launch their businesses. Pockets of sustainable infrastructure spring up around the leading cities, raising the overall livability scores and reducing social unrest.

Challenges foster resilienceIn this scenario the energy transition progresses at a moderate pace. There is strong political, social and corporate will to reduce carbon emissions. However, technology innovation and deployment is slower than hoped, not helped by the growing societal mistrust of digitisation and technology. There has been some notable progress in adoption of renewable energy and cleaner forms of fuel in transport. Nevertheless, carbon emissions have continued to climb upwards.

Prior to the beginning of the 2020s governments and infrastructure owners around the globe under-invested in infrastructure adaptations that would mitigate the effects of climate change. One reason for this was the

unpredictability of disasters in both timing and extent. Another was that many cities, regions, and nations were struggling to keep up with basic infrastructure needs, let alone incorporate forward thinking resilience mitigation and adaptation.

As the 2020s progressed, climate change began to have an increasing impact, and this was a problem that appeared here to stay. Essential infrastructure assets became increasingly vulnerable to climate-related forces: rising sea levels, drought, earthquakes, and violent storms were having far-reaching humanitarian and economic impact. In addition, other economic impacts were becoming apparent, for example average home prices in areas prone to flooding, hurricanes, and wildfires stalled in comparison with those in lower-risk areas. All of these factors drove a realisation that in the long run it is nearly always easier and cheaper to build resilience considerations into infrastructure development from the start rather than as a response to a major event.

Thus, resilience eventually became a part of asset development and design. Governments and municipalities, particularly in coastal and heavily urbanized areas, began to pay close attention to the particular risks of their unique geography, calculate costs of asset loss or damage as well as business disruption, decide how to protect critical components, and prioritise strategies with the greatest return on investment. Governments at all levels brought in measures to encourage resilience by establishing building codes and guidelines that promote climate-resilient infrastructure, supporting owners with funding and resources, and establishing resilient, focused land-use policies (e.g. restricting building in flood plains).

Governments poured huge investment into resilience research and development, including on-the-ground assessments. This scientific research in a variety of fields enabled development of technologies and processes that

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are being used to extend the life of infrastructure, expedite repairs and replacements, and increase cost savings.

In areas of the world impacted by the most extreme weather events, a key focus has been on energy resilience. Many cities, especially in the developing world, have turned to micro-grids and rooftop solar PV. Historically, economies of scale have dictated a preference for centralised power generation with control outside local boundaries. However, in some parts of the world extreme weather events damaged significant elements within these networks (e.g. a power station or main transmission line) leaving millions without power and significant repair costs. In cities where this was a regular occurrence, micro grids soared in popularity due to their inherent resilience. These grids were mostly powered by rooftop solar, with wind power and large scale solar not being feasible in many locations due to high urban density and limited amounts of open land.

Urban transportation investment accelerates despite digital headwindsOver the last 15 years demand for urban transportation increased as expected. Problems related to transportation began to become acute, prompting a reaction from electorates. Consequently, by the mid-2020s one of the main aims of national and municipal leaders was to tackle the challenges of congestion and pollution from generally inefficient transport systems.

Public transport systems benefited from access to significant investment as infrastructure finance was unlocked. This saw cities invest heavily to introduce or expand metro and bus rapid transit (BRT) systems. Although capital intensive, metro systems were attractive because of their high capacity and speed. Bus rapid transit (BRT) systems grew exponentially in the developing world due to the lower upfront capital cost and greater options and availability of buses running less polluting fuels such as compressed natural gas (CNG), liquefied natural gas (LNG) or electricity.

From the early 2020s, more and more cities began to limit vehicle ownership, vehicle city access, and vehicle emissions in dense centres of large urban areas. Although constraints on driving were initially opposed by many city dwellers, they gradually became a relief to those who no longer had to spend hours sitting in traffic. This sentiment was fostered and sustained by the lifestyle choices, values, and consumer behaviour of the young millennial professionals and workers who made up a growing share of the population in these large, urban areas. They purchased fewer new vehicles than expected, choosing instead to use mobility services, take public transportation, or simply telecommute to their jobs.

Alongside reducing the volume of traffic moving around cities, large investments were made throughout the 2020s in public EV charging infrastructure. Municipalities encouraged EV use through crucial investments in charging infrastructure in homes, work places, and fast charging availability.

Beacons Scenario

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There was also a focus on lower cost congestion reduction options such as continued expansion of cycling and use of electric scooters and bikes, strict enforcement of traffic rules to minimise obstructions (e.g. illegal parking), use of congestion / road charging systems with higher charges at peak times, and road tolling which helped fund further investment in transportation.

Water gets the treatment it deservesAt the beginning of the 2020s, many cities were already facing acute water shortages and pollution caused by underinvestment and urban growth rates. As the decade continued, water remained high on the list of challenges for most major cities, with problems most acute in the developing world.

Proactive planning and better access to finance for infrastructure led to very high levels of investment in water projects. Initially, a large proportion of this was grey infrastructure such as wastewater treatment and desalination plants, according to local needs. However, as the 2020s progressed there was a distinct shift towards more sustainable and resilient forms of water solutions alongside the more traditional facilities.

The sheer scale of water challenges faced, and the need for greater resilience, made less capital intensive and circular solutions more attractive. Many cities looked at solutions such as reforestation and creation of parks around water reservoirs in order to tackle water scarcity and improve water quality. As various cities championed more sustainable solutions this provided a pathway for others to follow. In a virtuous circle, this made sustainable projects easier to finance.

Waste goes round in circlesIn tandem with other challenges faced by cities throughout the 2020s, better planning and the increased availability of finance allowed for increased spending on waste solutions. Zero waste becomes the aspirational goal of many cities.This saw progressive minimisation of waste deposited in incinerators, cement plants, dumps and landfills.

At the beginning of the 2020s, in the developing world, a large proportion of waste was simply sent to landfill or burned. Therefore, cities had to become innovative. By 2035, composting is a key strategy for diverting organic material away from landfill or incinerators. Large investments were made in waste-to-energy plants in order to reduce landfill waste, reduce CO2 emissions and provide electricity supplies.

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By 2035, cities around the world are undergoing a sustainable transformation. Society has wholeheartedly embraced digital and technological advancements for economic benefit. Deep digitisation has been enabled by more government control of data and technology. Digitisation and efficiencies have unlocked huge new sources of finance for infrastructure. Cities have embraced sustainability and resilience, while society has driven a rapid energy transition. Smart technologies underpin a revolution in energy infrastructure and urban transportation. Transportation has been revolutionised by data optimisation and AUVs. Waste and water are now becoming optimised and carefully managed.

Key elements• Economic growth throughout 2020s driven by

digital and tech boom

• Governments begin to take control of critical digital resources

• Society accedes to deep digitisation; accepts loss of privacy and control for economic growth and stability

• Boom in digital construction and big data in infrastructure leads to efficiencies which unlock new finance streams

• Sustainability and resilience accelerate alongside a rapid energy transition

• Infrastructure project returns reach new benchmarks

• Urban infrastructure is transformed with help of technology.

Blaze Scenario A very large or fiercely burning fire.

This scenario sees a world where investment is unlocked and people generally embrace technology and share data to improve their lives.

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Smart sustainable future cities realisedAs we stand in 2035 the progress made in city infrastructure has been remarkable. Finance has been unlocked through a combination of measures such as sustainable investing, digital delivery, smart city thinking, transparent commercial risk sharing and removal of human interfaces. Smart, efficient, digitally-enabled buildings, highways, parks and airports have been constructed. Functioning city sustainability and resilience has been cracked.

Much of this was made possible by governments taking control of digital resources. This cleared the way for the use of vast pools of information harvested by smart sensors to ensure assets and people are being “managed” in a way that keeps cities healthy and optimised. This digital progress contributed substantially to the success of some cities in unlocking large new streams of finance. This enabled them to successfully move towards overhauling all forms of urban infrastructure, employing smart solutions and fostering sustainability and resilience.

Period of stable and strong economic growth paves the wayThe remarkable advances in urban infrastructure were underpinned by a period of stable and strong economic growth in the late 2010s and into the 2020s. As the 2020s progressed, technological and digital advances provided a further boost to economic growth. Supported by these advances, the world is moving into a rapid and deep energy transition and ushering in an age of electricity.

Society through this period was largely driven by the desire for prosperity and convenience and there remained a strong public appetite for more innovation. This drove more demand for Big Tech to develop new services

and move into new industries and sectors. Leveraging huge cash reserves and using digital and cost related competitive advantage, they quickly built significant market positions in most major industries. This led to the emergence of new business models, new strategies and entirely new companies. Artificial intelligence, advances in robotics, and ever-increasing computer processing power were key ingredients. Whole sectors of the economy were transformed, from education to manufacturing.

People began to see the economic benefits of technological advancements. Partly as a result of this, societies ultimately choose stability and prosperity over privacy and unbridled liberty. People became more inclined to allow large-scale harvesting of private data by technology companies and governments. There was increasingly a sense that this trend had already become too widespread and influential to stop. People began to increasingly delegate aspects of their day to day lives to algorithms, leaving them more time to focus on driving innovation and system improvements. Jobs become increasingly computational rather than manual.

Emergence of government command and control of digitalAt the same time, serious problems were emerging through weaknesses in the new digital infrastructure. The early signal was the Cerebellum Virus which infected 100 million people across Asia in 2023 through a Trojan horse software update from WeChat. Hackers broke into the master data store and subtly changed the coding for a new security update. The next attack took out a fifth of the major banking systems across New York City, London, Frankfurt and Tokyo and personal accounts were opened to the public to help themselves – to a limit of £20,000 each.

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Concerns increased about the danger of such cyber-attacks and the role played by modern media in polarizing society, provoking unrest and fuelling populist politics. In both democratic and autocratic countries, there is an increased expectation and acceptance of government action to moderate the digital realm.

Initially, partnerships develop between government and technology corporations. Later, governments took increasing control over technological innovation and deployment. Over time, important systems and structures – such as infrastructure and energy grids – start to be intelligently optimised and controlled by governments. They also investigate the optimisation of transportation networks and infrastructures using public and private data. Individuals are required to share their mobility data and vehicles have sensors transmitting data about location and speed.

Major cities and governments were now able to commit to connecting and sharing large amounts of real time sensor data. Valuable insights about how the infrastructure was used, maintained and failed became available. Data such as the daily routine of people moving through the city, where they liked to eat, how long they exercised for, who they dated were all collected via facial recognition, thermal imaging and the IoT (Internet of Things).

For city planners this data mountain was a game-changer. They could estimate age from wrinkle mapping software, and gender, along with algorithms to predict profession, country of birth and social background. All of it was theoretical of course, but with the volumes of data now

being processed every millisecond, the degree of unknowns became negligible. All of this data was fed into new digital construction programmes that were developed across the largest cities in the world in order to predict and protect.

Digital infrastructure revolution: money, money, everywhere!The emerging government control of the digital architecture helped unlock vast amounts of infrastructure finance. Government control and direction provided a clear route for the use of digital technologies in infrastructure and society was happy to give up privacy in order to have economic stability and improved quality of life. Investors were keen to benefit in a new digital revolution sweeping through infrastructure and many of the key roadblocks holding back investment were being removed. Investors could see how they could commercialise their investment through new pay-for-service agreements that consumers and councillors were willing to embrace. Cyberattacks on banks left the wealthy looking for safe havens. The thinking of the wealthy was – better to have your financial wealth plugged into the gardens and girders of a city than intangible digital bouillons in an account that can disappear in seconds.

Much greater flexibility and end user involvement in shaping the infrastructure projects meant that there was growing confidence that the right projects were being built in the right way – all underpinned by solid carbon credentials that ensured a net zero carbon payback within seven

Blaze Scenario

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years. Now that organisations had access to live data on major projects they could identify where the weaknesses were in minutes rather than days and intervene to keep things on schedule. Improvements began to be made across the phases of a project and created a step change in project delivery and construction productivity. Risk became a fluid concept which transitioned over the course of a project between the main stakeholders, all sharing some of it depending on their stake in the project. Delivery was no longer potluck, but a real-time multi-dimensional digital interface kept everyone and everything visible to all stakeholders. With true data integration achieved via blockchain and IoT, weaknesses in the system could also be identified and proactively managed to ensure a smooth flow of on time. Major public infrastructure projects started to come in under budget for the first time in history. Significant productivity gains began to be seen, with more and more investors seeing urban infrastructure as the safe place for their trillions of assets under management.

Sustainability and resilience accelerate alongside a rapid energy transition Through the early 2020s, a clutch of key cities began to lead the way in sustainability and resilience, driven forward by inspirational leaders.During the 2020s more cities joined this club of global leaders, acting as a powerful role models for cities around the world – improving connectivity, introducing smart energy and water use, transforming mobility, and retrofitting existing systems.

These cities shift focus towards delivering urban infrastructure projects that are resilient and result in resilience for the communities they serve. Over time, this represents a shift in project prioritization, development, implementation and financing.

Consequently, by 2035 many cities have made significant progress towards becoming sustainable and resilient. These cities are now routinely adopting sustainability measures across areas such as waste, energy, water, transport, pollution, housing, social needs, health and infrastructure. Sustainable infrastructure now routinely integrates hard infrastructure, sustainable materials, technology that reduces risk and creates efficiencies, nature-based solutions, and circular economy solutions – all with the goal to address both physical constraints and community needs.

New cleaner cities are emerging which are attractive, healthy, rewarding, and safe places to live. City leaders are now increasingly investing in sustainable solutions which work for the longer term, rather than just allowing urban sprawl to continue. Cities are now also increasingly future-proofed, ensuring that new infrastructure is built to be resilient to changes in technology, emission standards, and potential climate change risks such as sea-level rises and changes in weather patterns.

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Infrastructure project returns reach new benchmarksBy 2030 the returns on the largest and most ambitious urban infrastructure projects were starting to be seen as outstanding. New crowd-paying schemes, where urbanites paid for only the services they actually used and got benefit from meant that people were happy to have $5 added to their monthly council bill if they got a guaranteed parking spot for the Tesla Model 8 next to the train station every day. Through mass mining the movements of people, officials were able to maximize the charging scheme to the value inherent from access to clean, reliable, smart public services like buses, trains and metros. People literally voted with their feet over what improvements would be made next. Too many people waiting too long for a hydrogen bus? No problem, the city’s Mother Data would respond within 15 seconds to mobilise idle buses to meet the need. Employers responded by wanting to set up new businesses in these cities – creating more jobs and bringing in more motivated urbanites.

All the pence and cents across millions of city dwellers choosing better services and paying proportionately small costs for improved urban living created vast sources of sustainable revenue for those early investors in this new eco-system. Part of the upfront agreement was that 33.3% of all profits would go straight back into urban investment in non-revenue generating areas, with the result that parks, galleries, museums and theatres kept springing up in regenerated areas – all adding to the enjoyment of living in the urban environment.

Urban planners and engineers - the new rock starsBy 2035 the leaders who had stitched together the first successful coalitions of sustainable digitized urban infrastructure across major cities were beginning to become global icons of industry. The competition for their services was intense. Energised by their vision of sustainable cities of the future, city planning, digital construction and urban analytics became the most desired professions for the new global youth. Gone were the days when people wanted to enter virtual worlds to escape reality, now young people wanted to mould the city environments around them to respond to their demands – changing traffic flow, re-designing building lighting and office layouts through surveys and data analytics.

Whole new areas of research were created as digital carbon became the most important investor lever that an entrepreneur could pull – the pre-construction digital mapping of all systemic carbon inputs and outputs of a new piece of equipment, facility or school. Buoyed by this new sense of resilient, sustainable and cost-effective infrastructure the insurance industry began to develop new models for insuring these more robust assets, and developers were rewarded with extra low premiums for those willing to push the thinking on urban resilience.

“Over-engineering” was re-defined from a climate perspective – severe heat, precipitation and winds became standard weather patterns. What was once considered robust for a 30-year design life became considered a 10-year design. Designing in material contingency and structural resilience became commonplace. Use of new materials to absorb heat, water or significant swaying has become critical to our future.

Urban infrastructure is transformed with help of technologyMany cities became magnets for sustainability and success and underwent large-scale transformation of infrastructure. These cities largely banned combustion engines and invested heavily in upgrading infrastructure to facilitate zonal use of EVs and AUVs. Fast charging infrastructure was added to homes, offices and former petrol stations. AUVs relied on sophisticated sensor arrays installed throughout road networks. Traffic is regulated in real time and big data allows for efficient planning and use of resources. Congestion is reduced drastically. Metros and buses tend to be electric and demand for services is optimised in real time.

In 2035, many local governments now incorporate driver-less cars in their public transit systems and have developed extensive sharing systems for bicycles and motorised electric two-wheelers. In cities where there has been broad adoption of fully autonomous vehicles there has been a shift in traffic from public transit systems back to cars, increasing road traffic, and changing patterns of traffic flow. AUVs are reshaping city design, urban layout, and real estate investment as proximity to public transit becomes less valuable and travel time becomes less costly to commuters who can work or watch videos during the trip. Self-driving vehicles are also substantially increasing road capacity as vehicle-to-vehicle communication allows tighter spacing between cars and as street crossings gain more efficient protocols than today’s traffic lights.

Although challenged by the expansion of AUVs, public transportation continued to be relevant and vital to modern cities, taking on myriad forms, depending on the city, the culture, and the local climate. Many train and subway lines have been built in the period to 2035, but these forms of transportation were considered too expensive or disruptive in some locations. Instead, other options were chosen based on using existing infrastructure—including dedicated lanes for alternatively fueled buses and taxis—and vehicle-sharing services for cars and trucks.

The increasingly availability of transport data and computing power is allowing many urban planners to understand in more detail the impacts of different transportation projects or plans. This has allowed cities to design transportation networks that more accurately address the needs of citizens, reducing congestion and pollution.

Blaze Scenario

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It is not unusual to see drones criss-crossing the skyline in many cities in 2035. While still in its infancy in most cities, aggressive expansion by large technology companies has seen this already having the effect of taking some delivery vehicles off the road while posing challenges for air traffic control and law enforcement authorities.

Substantial investments are made in sustainable water solutions. IoT-enabled sensors collect real time data, enabling optimization of the system and quick detection of leaks. This means that water use is distributed across the network and allows people to make informed decisions about their water consumption. The trend towards rapid digitisation also been an influential factor. Smart water technology has been widely responsible for driving step change improvements in usage of water. The use of Smart Water Management tools such as smart metering, remote monitoring (SCADA), geographical information systems, and telecommunications systems have been widely adopted.

100% waste collection and recycling becomes an aspirational goal of many of the successful city leaders. This sees progressive minimization of waste deposited in incinerators, cement plants, dumps and landfills and maximum recycling by consumers. Smart solutions are employed in data collection. There is the promotion of micro-enterprises and cooperatives for waste pickers.

Energy use becomes more efficient through smart metering and responsive devices, electricity grids become smart through utilisation of distributed renewable energy and micro grids – all connected digitally. This leads to the

combination of low carbon power generation; reduced energy consumption; and off-peak battery storage to produce an overall flattening of supply/demand peaks and troughs and a more resilient power grid.

By 2035, the sustainability of energy infrastructure is greatly enhanced by huge adoption of smart technologies in urban buildings. These smart buildings use large numbers of sensors to optimise building systems like heating, cooling, ventilation and lighting with the objective to operate leaner when less people are using the building. On days when fewer people are expected, the system may even close entire sections, cutting costs for heating, cooling, lighting and cleaning. In addition, most buildings are capable of adjusting their power consumption to the real-time scarcity of electricity. If loads are high, the energy grid can send a request to smart buildings to reduce their energy consumption temporarily in order to lower peak load of the grid as a whole.

While the wide-ranging transformations seen over the last 15 years have occurred at breakneck speed and created many uncertainties for infrastructure providers, they have offered opportunities that were largely unforeseen not too long ago. Governments and cities that moved ahead quickly to take advantage of available finance and technological innovation have been able to improve the quality of life for their citizens, and make great savings in infrastructure investment in the long run.

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In its immediate sphere of impact, investment in infrastructure creates jobs – from the development of the infrastructure asset, to the maintenance and provision of essential services. Historically, economic theory has supported the benefit of infrastructure investment in market downturns to support employment and positioning for future growth. Over the past decade, emerging markets like China have leveraged infrastructure investment to create jobs, albeit with lessons learned on investment return criteria.

More broadly, investment in infrastructure can spur economic growth - for ever $1 invested, GDP grows by $1.50. It can build skills and capacity across all levels of the workforce and through supply chains. While high-quality assets can drive improved productivity and efficiency gains, infrastructure bottlenecks can stagnate growth, or more detrimentally, the ability to address basic societal needs. Capacity of businesses to compete in the global market is dependent on their local infrastructure. Thus, most multinational corporations and financial institutions consider quality of infrastructure as a key metric to assess investments in new market entry and business development opportunities.

As we look to the future, the magnitude and type of infrastructure investments we make today will ultimately define the development pathway for our society over the coming decades. Most infrastructure asset types, take for instance a power grid or water utility, have an asset life of between 20 to 50 years, meaning decisions on the type of asset built will lock in energy demand and consumption for many decades. These decisions have wide reaching effects – with infrastructure assets around the world currently producing more than 60% of global carbon emissions – which is likely to rise with an expected 25% growth in the world’s population by 2050.

Consequently, the type of infrastructure selected for investment today will define our future exposure to climate risks (such as storms and droughts) and our ability to advance the Paris Agreement targets to a low-carbon transition. Equally, the magnitude of investments will determine our capacity to address societies’ growing needs – in line with the United Nations’ Sustainable Development Goals (SDGs) – in creating a fair and prosperous society for all.

What are the current trends related to infrastructure finance? While governments’ recognition of the importance for infrastructure investment is growing, the crucial challenge remains in how to address the financing gap. Between now and 2030, the G20 Global Infrastructure Hub projects over $40 trillion (2015 USD) will be needed globally for infrastructure investment – based on expected rates of population growth, urbanization and economic prosperity. Additionally, if we are to meet the UN SDGs by 2030, a further $3.5 billion will be needed. Yet current investment trends indicate a substantial gap in the financing required, with more than a $0.5 billion gap expected in 2019 alone.

The world’s largest markets and developing economies alike are wrestling with the question of how to pay for urgently needed investments in infrastructure. Governments continue to face the risk of a looming public debt crisis, after a decade of austerity for some and further need to cut back spending to reduce debt burdens. With constraints on cash-flow, the public sector has a huge need for additional sources of funding for infrastructure.

Global Infrastructure Gap

Source: G20 Global Infrastructure Outlook, GI Hub & Oxford Economics, 2018, https://outlook.gihub.org/

Yet while alternative funding sources are available, critical challenges will need to be addressed to open up and build new financial flows.

1. Finance Primer

Infrastructure Asset Classes:

Source: ClimateWise Transition Risk Framework, https://www.cisl.cam.ac.uk/resources/sustainable-finance-publications/navigating-transition

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The biggest potential prize is to tap into the $120 trillion in assets under management held across the globe by banks and institutional investors (such as insurers, pension funds, and sovereign wealth funds). However, infrastructure is just emerging as what those in the industry might call a commercial asset class, and more work is required to develop a better-functioning market. The issue is not about finding more money, but rather, on how to get current pools of capital to flow more freely into infrastructure projects globally.

In feedback from surveys with investors conducted through the G20 Global Infrastructure Hub, the largest constraint appears to be a clear pipeline of well-prepared, bankable projects that provide investors with appropriate risk-adjusted returns. A number of roadblocks are driving this constraint – political scepticism on privatization; stalling early concept development; costly stakeholder involvement; and lengthy permitting. Furthermore, some places lack sufficient capacity for developing concepts into well-prepared infrastructure projects with solid economics.

What are the possible solutions?In 2018, the G20’s Infrastructure Working Group (IWG) identified the key elements for infrastructure growth under a strategic roadmap, “Developing infrastructure as an asset class”, organised under three overarching pillars, the first of which is improving project development. In July 2018, the G20 Finance Ministers and Central Bank Governors endorsed the G20 Principles for the Infrastructure Project Preparation Phase developed by the IWG.

The Global Infrastructure Hub (GI Hub) has led the development of this Reference Tool on Governmental Processes Facilitating Infrastructure Project Preparation to support the operationalisation of the aforementioned G20 Principles. This reference tool is intended as a guidance document for governments and practitioners involved in infrastructure project preparation and is built on a detailed country-lens review of project preparation practices in 15 countries. The reference tool seeks to address challenges faced by governments in early stage project preparation.1

What are the key factors uncertainties around unlocking more finance?While delivering infrastructure as an asset class is fundamental to opening financial flows from banks and institutional investors, the key uncertainty is how much and how quickly funding into the infrastructure asset class could grow. Three key factors to consider are:

1. Investor interest in leveraging infrastructure as opportunity for providing a stable income stream in a low-yield environment and highly uncertain market. Current indications over the past year is that we will see growing interest from institutional investors. In April 2019, the G20 Global Infrastructure Hub conducted the world’s largest survey to-date covering 130 institutional investors representing $10 trillion of assets under management. A key finding was 80% of investors participating in the survey are intending to invest more in infrastructure in the next five years. Likewise, in a recent study commissioned by UK infrastructure firm Foresight, the study found two-thirds of financial advisers expect clients’ allocations to global infrastructure to increase over the next three years

amidst fear of a sustained downturn, political uncertainty, and concern for global equity markets.2

2. Public sentiment for new forms of investment in their societies’ core infrastructure assets. Growing trends in SDGs, ESG and Impact Investing could play a key role in turning the tide in public sentiment. For one, we have seen massive growth in green and social bonds which support turning the tide. Likewise, innovative insurance companies are looking at both sides of their balance sheets, to incentivise driving funding for climate resilient and low-carbon infrastructure assets – which could ultimately lower their liabilities in the future (as climate change issues take hold and call for insurance premium payouts). Aviva, Aon, and ClimateWise are excellent examples. Furthermore, pension funds are coming under increasing pressure from their members (especially teachers, fire men and women, police officers) to play a bigger investment role in sustainable infrastructure. Finally, trends across the top five global infrastructure investors (e.g. Macquarie, IFM) show increasing interest in SDGs and ESG which could turn the tide on sentiments to privatisation and PPP.

3. Investor perspectives on investment criteria hurdles and risk-return profiles. The biggest challenge and lack of movement in the infrastructure gap today is in trying to drive financial flows to developing economies. A wide number of initiatives need to be taken to lower the investors’ perceived risk in these markets. Development Finance Institutions (DFIs) and Multilateral Development Banks will need to work alongside the G20 GIH, which is being planned, to provide assurance and financial/insurance mechanisms to reduce perceived risk for institutional investors – particularly in their first wave of initial investments in emerging markets to demonstrate robust approaches to opening up these markets to international financial flows.

Nevertheless, there are several factors here which mean all of this could be perceived as ‘green-washing’ by investors and back-fire. Likewise, a few poor infrastructure investments (e.g. inappropriate nationalization and major shifts in the regulatory environment) could scare off investors as a new asset class is just beginning to emerge.

1 - https://cdn.gihub.org/umbraco/media/2347/executive-summary.pdf

2 - https://cdn.gihub.org/umbraco/media/2564/global-infrastructure-investor-survey-report-2019.pdf

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Rapid urbanization in developing countries, and continued urbanization in advanced economies will be the biggest driver of infrastructure spending over the next few decades. This rise will require sustained infrastructure investment in railroads, highways, bridges, ports, airports, water, power, energy and telecommunications, creating massive opportunities for multinational contractors and their international and local suppliers.

Urbanisation trends• More and more people are moving to cities,

particularly in emerging economies across Asia, Africa and the Middle East.

• Over 80% of global GDP is generated in cities

• 93% of urban population growth will take place in developing countries

• Over 70% of global greenhouse gas emissions come from cities

• More than one-third of global city dwellers live in slums

• 1.4 million people move to cities each week – 55% of people now live in cities

• Over 75% of the global urban population live in developing countries

According to the UN, 55% of the world’s population currently reside in urban areas. In 1950 30% of the world’s population was urban, and by 2050, 68% of the world’s population is projected to be urban. As well as the overall rate of population growth, the distribution of a country’s residents plays an important role in determining the amount and type of infrastructure needed. As countries become more prosperous, residents tend to gravitate towards urban areas to take advantage of the economic and social opportunities they offer.

There is significant diversity in the urbanization levels reached by different geographic regions. The most urbanized geographic regions include Northern America (82% living in urban areas in 2018), Latin America and the Caribbean (81 %), Europe (74%) and Oceania (68%). The level of urbanization in Asia is now approximating 5%. In contrast, Africa remains mostly rural, with 43% of its population living in urban areas.

As the world continues to urbanize, sustainable development depends increasingly on the successful management of urban growth, especially in low income and lower-middle-income countries where the most rapid urbanization is expected between now and 2050. Integrated policies to improve the lives of both urban and rural dwellers are needed, strengthening the linkages between urban and rural areas and building on their existing economic, social and environmental ties.

Urbanisation can bring benefits – accelerating innovation, collaboration and the wider distribution of economic development and the prosperity that follows. But if managed poorly, urbanisation could lead to declining quality of life, greater environmental degradation, accelerating greenhouse gas emissions, social stresses and political turbulence.

This shift to urban living will intensify demand for limited resources including water, food and energy. Yet it will also be vital to preserve productive arable land to feed the world’s growing population. The character and quality of future urbanisation will therefore have a huge influence on global resource efficiency and sustainability, directly affecting the quality of life for billions of people.

2. Urbanisation Prim

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How cities evolve and develop will have a huge influence on the character of the infrastructure over the next 15 years. Lots of work has been done by various organisations on projecting the evolution of large cities, different types of cities and possible future development paths. Looking at these gives higher level context on the current characterisation of cities worldwide and how these might develop in future.

According to the UN, in 2018 close to half of the world’s urban dwellers resided in relatively small settlements of less than 500,000 inhabitants, while around 1 in 8 live in 33 megacities with more than 10 million inhabitants. Several decades ago most of the world’s largest urban agglomerations were found in the more developed regions, but today’s large cities are concentrated in the global South.

By 2030, the UN forecasts that there will be 43 megacities in the world, 66 “large” cities, and 597 “medium sized” cities. They project that by 2040, over 60% of the world’s population will live in cities of 500,000 people or more. Today, there are 33 megacities which are concentrated in only 20 countries. China alone has six megacities and ten cities with populations between 5 and 10 million in 2018, and it will add 2 more megacities and six more large cities by 2030. India has 5 megacities today, adding two more by 2030 (Ahmadabad and Hyderabad).

The two megacities of Brazil are expected to remain the only megacities in the country, as is the case in Japan, Pakistan, and the United States of America. Cairo, Kinshasa and Lagos are the only megacities in Africa in 2018, but two more are expected to emerge by 2030, as Dar es Salaam (Tanzania) and Luanda (Angola) are each projected to grow beyond 10 million inhabitants. The number of large cities with populations between 5 and 10 million in Africa is also expected to increase, from five in 2018 to thirteen in 2030. In Latin America, Bogotá (Colombia) and Lima (Peru) have recently reached 10 million, joining the four pre-existing megacities of the region: Buenos Aires, Mexico City, Rio de Janeiro, and São Paulo.

What kind of cities will people live in?The majority of humanity are expected to live in cities by 2050. But, in what kind of cities? The conventional urbanization narrative holds that big cities will only get bigger and economic benefits will continue to accrue disproportionately to hotbed regions, such as the San Francisco Bay Area or Shenzhen in China. One recent mega-trends report1 provided a counter-narrative to this urbanization story. In this, as global megacities and hotbeds begin to experience the limits to growth, and the forces of disruption continue to drive change that creates new opportunities for legacy cities and smaller cities. The result would be a more distributed, inclusive and resilient global cityscape.

Another study2 identified six typical pathways along which cities evolve, each with important implications for energy consumption and efficiency. Two of these could be particularly significant in shaping future city evolution – controlled urbanisation and late-stage development. In controlled urbanisation, both population and GDP per person grow quickly, driving significant city development. This pathway typically occurs in small, less developed cities (underdeveloped urban centres) that grow very rapidly and transition into wealthy cities (urban powerhouses or sprawling metropolises). In late-stage growth, cities also experience significant GDP per capita and population growth, but at a later stage, once the city is already large and has extensive physical infrastructure.

The way cities develop will unlock different types of opportunityA recent study3 on megatrends outlined how the ways that cities develop will influence the business opportunities that emerge. Young and developing cities, especially in emerging markets, require basic infrastructure and construction (i.e. hard commodities, diggers, concrete etc.). But as they grow in size, opportunities emerge in middle class consumption exposure (housing, appliances, cars). Inevitably, demand for leisure and media grow too, as do services such as waste management and logistics.

Understanding how cities in major economies will evolve will help identify which areas of the infrastructure will provide most opportunities. As cities become even bigger, large scale transport infrastructure, airports and bridges become essential.

Impact of large-city growthWhile most urban growth is expected to occur in developing countries, ensuring growing cities are properly managed will also be a priority for governments in developed countries as they strive to maintain competitiveness in the face of growing global competition. A recent study on urban infrastructure4 outlined that one of the greatest challenges that policy makers around the globe will face will be monitoring the process of urbanization and managing growth sustainably while ensuring adequate access to housing, water and energy for all citizens. Equally important will be awareness of the social and service-oriented impacts of urbanization, both positive (e.g. efficiencies of serving more concentrated populations) and negative (e.g. rural-to-urban dislocations, loss of family cohesiveness, homelessness and stresses that enhance needs for mental health and other types of services).

3. Cities Prim

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1 - Source: EY

2 - Source: Shell

3 - Source: Blackrock

4 - Source: KPMG 31

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Today, more than half of the global population live in urban areas and 1.5 million people are added to the global urban population every week. By 2050 68% of world’s population are expected to live in cities. A staggering 90% of this urban population growth is expected to take place in Africa and Asian countries. If this trend in rapid urbanization continues, coupled with a changing climate, the growth model of cities is coming under strain. Rapid urbanization is placing huge demands on infrastructure, with corresponding impact on society and the environment.

The infrastructure that people living in urban environments depend on was typically not designed to be resilient to the extraordinary shocks they now face, such as floods, droughts, extreme heat, rising sea levels and wildfires. Over the next 15 years, cities will also need to build infrastructure that can address stresses such as economic equality, lack of affordable housing, inadequate public transport systems and poverty.

Without significant investments into sustainable and resilient infrastructure, nearly 90% of cities globally could be highly vulnerable to economic losses associated with future shocks. For instance, some forecasters predict that natural disasters alone may cost cities worldwide over $314bn each year by 2030. However, there are also opportunities too, with potential for emerging cities to act as powerful and inclusive development engines in the building of sustainable infrastructure.

Key infrastructure such as roads, water supply and sewers, electrical grids and telecommunications are the backbone of economies, and provide the services needed for all classes in society to live. Integrating sustainability principles into infrastructure is key to making these sectors resilient to future impacts and

providing the benefits required for people to survive and thrive.

Sustainable infrastructure is based on four interconnected attributes are typically integrated into projects:

• Connected – embeds the right technologies and service solutions

• Sustainable – meet the needs of the present without compromising future generations

• Resilient – ability to maintain continuity and performance through all shocks and stresses

• Liveable – generates co-benefits from the project resulting in improved quality of life and well-being of urban settings and their inhabitants.

The decisions cities make today for their future – on which infrastructure projects are moved forward, how to build them, who to build it for – reverberate globally. Today’s investments in infrastructure, with the long asset life spans, are critical for our ability to address societies’ most pressing future needs. As noted by the United Nations, more than 2.5 billion people face difficulties in accessing sanitation and electricity. Consequently, the UN Sustainable Development Goals (SDGs) has made a global universal call for sustainable infrastructure which is reliable, future-proofed, socially viable and resilient. The infrastructure cities build represent an unparalleled opportunity to leverage innovation and creative planning to make meaningful improvements to the lives of billions of people.

4. Resilience Primer

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What are Smart Cities?According to the World Economic Forum the Fourth Industrial Revolution represents a fundamental change in the way we live, work and relate to one another, and an essential part of it is driven by technological advancements that are commensurate with those of the first, second and third industrial revolutions. These advances are merging the physical, digital and biological worlds in ways that create both huge promise and potential peril. The ‘Smart City’ concept becomes the testbed of this integration. As an ideal, it consists of a city whose digital tools and connected services help improve the functioning and optimisation of urban services, and improve sustainability and quality of life of its inhabitants. The concept is not static, there is no absolute definition of a Smart City, no end point, but rather a process, or series of steps, by which cities become more ‘liveable’ and resilient and, hence, able to respond more quickly to new challenges.

The digital technologies making our physical world smarter are themselves dependent on physical systems, and despite the exponential growth of these digital technologies the physical structure of cities and urban infrastructure currently remains essentially unmodified. The future implementation of smart cities will eventually require changes to the city structure to accommodate a vast amount of smart applications and unlock their full potential. Healthcare, security, public governance, citizen lifestyle, information accessibility, energy efficiency, building performance, multimodal mobility, and better education reflect services that smart applications target to improve and optimise.

Overview of smart services and applications • Smart Infrastructure: includes intelligent and

automated systems that manage, communicate within, and integrate into different types of intelligent infrastructure, such as smart grids, transportation networks, water and waster management systems, and telecommunications

• Smart Security: includes technology and solutions such as video surveillance, public safety, LTE, and managed security services that are designed to protect people, property and information

• Smart Energy: Smart energy management is expected to mature through advanced meter infrastructure, distribution grid management and high-voltage transmission systems, as well as to demand response for the intelligent and integrated transition and distribution of power.

• Smart Buildings: In the next 10 years modular buildings and prefabricated structures are expected gain more traction than the retrofitting of old and existing buildings. Buildings are expected to be more green, energy efficient, and intelligent, with advanced automated infrastructure that controls and manages aspects such as lighting and temperature, security, and energy consumption independently or with minimal human intervention.

• Smart Mobility: Smart mobility will boost electrification and autonomous vehicles in the years to come. The next 15 years will lead a multi-modal transition of mobility services and will require different modes of transport and technology to

co-exist, enabling intelligent mobility through the use of innovative and integrated technologies and solutions, such as low emission cars and multimodal transport systems

• Smart Water and Waste: The use of data analytics, sensor technologies and automated systems are expected to improve water leakage detection and pollution detection. Advanced warning for flooding are now reaching a degree of maturity. Predictive maintenance planning in the water industry and just in time waste collection could gain momentum.

• Smart Information & IoTs: Smart technology will connect the home, office, mobile phone and car on a single wireless IT platform. The adoption of a smart grid system, smart home solutions, and a high-speed broadband connection (5G) will allow for connected places and services to evolve faster in the next 15 years, affecting also a number of market sectors such as retail, logistics and tourism.

• Smart Healthcare/Smart Education: Data analytics and digital technologies are expected to change the way public services such as education and healthcare are currently performing. The use of eHealth and mHealth systems and intelligent and connected medical devices is already gaining traction and expected to grow by 2035. E-education and virtual learning also shape the way schools, universities and campuses will be designed in the next 15 years.

Traditional urban infrastructure networks such as energy, transportation water, waste, information, landscape, food networks and the buildings that support them, will need to go through the appropriate physical modifications that allow for these new services and the technologies that support them to reach their full potential.

A smart city is not a finite product with an end point, but a new dynamic model where cities will gradually move from product-driven to service-driven solutions. This means that the way infrastructure companies approach the physical infrastructure design and development will have to change to better respond this new model. Smart Cities will be physical and digital entities in constant transition, where fixed end solutions might become obsolete before even been realized. Therefore, infrastructure providers will also need to revise their approach of engaging and developing with smart cities projects, driven more by the requirement to keep a city running while allowing the adoption of different technologies as these evolve and mature to the physical core.

5. Smart C

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Population growth and rapid urbanisation are putting huge pressures on urban transport infrastructure around the world. Underlying trends indicate that this pressure is going to continue building. By 2050, cities will add more than 2.5 billion people and global car ownership could reach 2 billion, nearly double today’s level1. This could lead to more congestion, less economic productivity, and a further decrease in air quality levels. There is an opportunity to improve mobility through several disruptive technologies, ride-sharing platforms, mass connected public transport, Autonomous Vehicles (AVs) and Electric Vehicles (EVs). These can collectively transform the future of cities by dramatically lowering congestion and reducing the urban footprint devoted to vehicles.

Electric vehiclesElectric vehicles do not reduce congestion in cities, they can be effective in reducing tail-end air pollution and reduce carbon emissions especially if their charging source comes from low carbon renewable sources. Public charging infrastructure is an important component of growth in the electric vehicles in cities and several governments are already investing in providing the necessary infrastructure to facilitate that growth. It is also important for cities to invest in home, workplace, and fast charging availability such as DC systems.

AUVsThere are multiple business models for autonomous driving, all of which could ultimately reduce the number of cars in a city. A pool of self-driving cars can be envisaged that constantly roam throughout the city and match demand for transportation with mathematical precision. This could reduce the total number of cars dramatically. The fleet of self-driving cars can find parking spaces outside the city when they are not in use, leaving existing parking spaces in cities to be freed up for other purposes. A recent study estimates that shared vehicle mobility, in particular shared driverless cars can meet the personal mobility of the entire population of Singapore with one-third of the total number of passenger vehicles in operation2.

Big dataThe increasingly availability of transport data and computing power is beginning to allow urban planners to understand in more detail the impacts of different transportation projects or plans – which will allow cities to design transportation networks that more accurately address the needs of citizens. Vast amounts of data could be collected by transport networks which could be used to improve services in numerous ways. This includes predictive maintenance of the network, communicating real-time traffic congestion to travellers, planning more efficient bus routes as well managing peak congestion, mapping out air quality hotspots and reducing traffic, or improving transport in the area.

BicyclesPerhaps one of the most sustainable form of transportation in cities is use of bikes. Cycle superhighways are another key example helping with traffic congestion and reducing emissions. The benefits of cycling in cities include the fact it causes no environmental damage, promotes physical activity, takes up little space and is economical for both direct costs for users and public infrastructure costs.

Mass transport systemsDeploying more connected mass public transport systems can reduce air pollution, accidents and congestion. The metro, an urban electric transport system, with its high capacity and high frequency of service, is a well-established and valuable option for cities. Bus Rapid Transit (BRT) systems are bus-based mode of transport operating on exclusive right-of-way lanes at the surface level and underpasses. BRT’s allow cities to shift commuters to high-capacity buses saving travel time and reducing the amount of buses used in the fleet to lower help emissions and air pollution.

Public transport can be connected via mobility as a service (MaaS) that relies on a digital platform that integrates end-to-end trip planning, booking, electronic ticketing and payment services across all modes of transportation. As urban density continues to grow, MaaS provides an alternative way to move more people and goods in a way that is faster, cleaner, and less expensive.

The route forwardStrategic planning and good urban design is a must for all cities to ensure sustainable transportation systems. There are numerous obstacles to overcome. A recent study on urban transportation estimates that in Europe governments spend 50 to 70% of their transportation infrastructure budget on maintaining or replacing aging existing systems3. Most existing urban infrastructure is not ready for the future of mobility. Automation, connectivity, electrification, and shared mobility present an opportunity, but the road and rail infrastructure requirements to facilitate these technologies are often not considered when rebuilding individual projects. Governments and municipalities face numerous questions such as, for example, how electricity supply will be provided to fast-charging stations on roads, how we will provide connectivity for autonomous driving, and how we manage the integration of old and new train control systems.

6. Transportation Primer

1 - Source: Citibank

2 - Source: Spieser et al. (2014)

3 - Source: McKinsey

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Despite recent improvements to the use of water resources there are still an estimated 800 million people who do not have access to clean water and some 4 billion people who live under water scarcity at least one month per year. Several regions are also depleting their freshwater resources at a very fast pace — many major river basins in both developed and developing countries, are facing extremely high levels of water stress.

Urbanisation & waterUrban areas are expected to absorb all of the world’s population growth over the next four decades, as well as accommodating significant rural-to-urban migration. Even though water and sanitation access rates are generally higher in urban areas than rural, planning and infrastructure have been unable to keep pace in many regions. Today, 700 million urbanites live without improved sanitation, contributing to poor health conditions and heavy pollution loads in wastewater, and 156 million live without improved water sources. However, cities provide significant opportunities for more integrated and sustainable water use and waste management.

Water scarcityWater scarcity already affects every continent. Over 2 billion people live in countries experiencing high water stress1. 700 million people worldwide could be displaced by intense water scarcity by 20302. Water use has been growing globally at more than twice the rate of population increase in the last century, and an increasing number of regions are reaching the limit at which water services can be sustainably delivered, especially in arid regions. Water scarcity will be exacerbated as rapidly growing urban areas place heavy pressure on neighbouring water resources. Climate change and bio-energy demands are also expected to amplify the already complex relationship between world development and water demand.

Individual countries and regions need to urgently tackle the critical problems presented by water stress. Water has to be treated as a scarce resource, with a far stronger focus on managing demand. Integrated water resource management provides a broad framework for governments to align water use patterns with the needs and demands of different users, including the environment.

Waste waterGood water quality is essential to human health, social and economic development, and the ecosystem. However, as populations grow and natural environments become degraded, ensuring there are sufficient and safe water supplies for everyone is becoming increasingly challenging. A major part of the solution is to produce less pollution and improve the way we manage wastewater.

A more circular and therefore more sustainable economy requires us to value wastewater for its potential, rather than discard or ignore it. More than just an alternative source of water, safe wastewater management could help protect our ecosystems and give us energy, nutrients and other recoverable materials.

Climate changeWater is the primary medium through which we will feel the effects of climate change. Scientists, farmers and the business community consider variability, casted as ‘extreme weather events’, as one of the most likely production risks over the next ten years3. Water availability is becoming less predictable in many places, and increased incidences of flooding threaten to destroy water points and sanitation facilities and contaminate water sources.

In some regions, droughts are exacerbating water scarcity and thereby negatively impacting people’s health and productivity. Ensuring that everyone has access to sustainable water and sanitation services is a critical climate change mitigation strategy for the years ahead.

Floods & disastersWhen disaster strikes, it usually manifests itself through water. About 90% of all natural disasters are water-related. Over the period 1995–2015, floods accounted for 43% of all documented natural disasters, affecting 2.3 billion people, killing 157,000 and causing US$662 billion in damage. (UNISDR, 2015). By 2050, rising populations in flood prone lands, climate change, deforestation, loss of wetlands and rising sea levels are expected to increase the number of people vulnerable to flood disaster to 2 billion. (UNESCO, 2012).

The impacts and costs of these events are exacerbated by such factors as unplanned urbanization and degradation of ecosystem services. Reducing risk to, and improving the resilience of, water and sanitation services will be key to maintaining access during a climatically uncertain future.

Investment / conclusionsWith the demand for water expected to increase over the years, it is imperative that we implement adequate solutions to the efficient use of water in many areas. Investment in well-needed infrastructure is one part of the solution to these problems. On a global level, a total of $7.5 to $9.7 trillion is needed in investment for water and sanitation and related equipment. In developed countries investment is needed to upgrade and maintain aging infrastructure, while in developing countries investment is needed to build new infrastructure. Technology also has an important role to play — for example, smart meters encourage users to understand their consumption practices and precision agriculture is enabling farmers to collect real time data on weather, soil, and crop maturity.

7. Water Prim

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1 - UN, 2018

2 - Global Water Institute, 2013

3 - WEF, 2015 35

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Energy systems around the world are going through transitions that will bring important changes to the way we fuel our cars, heat our homes and power our industries. Cities are responsible for 78% of primary energy usage globally, and also emit between 50-60% of total global greenhouse emissions, rising to around 80% if we include indirect emissions generated by urban population. The amount of energy used in cities and how we generate energy has an enormous impact not just within cities, but on the planet overall.

Urban energy demandElectricity only represents about a quarter of final urban energy demand in developed economies, and around a fifth in emerging markets. Gas represents a much bigger share in developed economies being used for heating and for industry, while oil takes a large share due to its use in road transportation. Emerging markets tend to have a significantly higher carbon energy mix than developed markets, reflecting a greater reliance on coal.

Urban energy consumptionIndustrial manufacturing is a key component of urban energy use in developing markets, versus more service led economies in developed markets. While residential use is similar across all major urban centres, transportation takes a much larger share in developed markets, due to higher levels of car ownership.

Urban energy supplyThe reality for most cities is that they are under severe space constraints, especially the rapidly expanding ones. This means that large scale renewables sources such as wind turbines are often impractical, not at least from a sound and safety perspective. While solar is easily deployable in cities, the density of humans means that roof space per capita is a key constraint, more so than in rural locations. Hence, most cities obtain their electricity from large-scale power plants transmitted over distance.

Key factors in building and transportation energy useCities and urban authorities can drive efficient energy use by enforcing minimum standards or providing subsidies for energy efficiency in buildings and appliances. Space heating is a key area as it is responsible for almost half of urban carbon dioxide emissions and over 70% of urban commercial buildings emissions. Incorporating energy efficient technology and sensors into new buildings and infrastructure will help reduce energy demand in the future. However, the most pressing, and more expensive requirement, is to retrofit existing buildings to drive down carbon intensity.

In the transportation area there many challenges, one of which is to reduce the overall amount of cars on the road, alongside transitioning from ICE (internal combustion engines) to EVs (electric vehicles) via car scrappage schemes. Utilising congestion charges or higher parking costs can incentivise the use of energy efficient public transport. Encouraging the use of bicycles and mass transit systems, be they electric or hydrogen powered buses or rail, could have an enormous effect on energy usage and emissions in cities, as well as improving quality of life in terms of air quality and open urban spaces.

8. Energy Primer

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A key challenge of modern society is managing the volume of municipal solid waste (MSW) that is generated, particularly from urban areas. According to a recent study on waste1 global MSW generation levels are approximately 1.3 billion tonnes per year and are essentially expected to double by 2025. MSW generation is predominantly an urban issue and is generally proportional to the income level and rate of urbanization in a city: the higher the income level and rate of urbanization, the more waste that is generated and must be managed. MSW generation also varies by region. For instance, the 36 countries in the Organisation for Economic Co-operation and Development produce nearly half of the world’s waste while Africa and South Asia regions produce the least waste.

As standards of living increase, more waste is generated by modern conveniences such as home delivery of packages (such as from on-line shopping) and fast food – packaged individually without consistent consideration of minimizing packaging. The market for recycled materials is unstable and the cost for using raw materials has not yet exceeded the cost for using more sustainable packaging. While cardboard, metals, and some glass have a high demand in the recycling market, plastics remain the most common form of packaging and have such low demand for recycling that they are often diverted from recycling centres to landfills. Lightweight plastics, such as shopping bags, wrappers, and drinking straws are also more prone to becoming errant in the waste stream and are now impacting water and wildlife health.

Efficient and cost effective waste management is critical to successful and sustainable urbanization. Inappropriate waste management can have significant impacts on human, wildlife and health of the environment. Mismanagement of waste can lead to pollution of groundwater, soil, streams, lakes, and ultimately drinking water. Improper incineration of waste can create hazardous air quality issues. MSW management is a major component of the operating budget for local urban governments. Many cities and countries are developing responsible and innovative waste management practices. Some examples include:

• Standardization of equipment and facilities to allow for partial automation of waste collection

• Privatising waste collection to promote recycling by vendor (salvage value) and incentivising waste reduction through user fees and rewards for recycling

• Separation of food waste and yard waste from the MSW stream for composting

• Waste to Energy converts municipal and some industrial waste to energy

• Renescience which is a new technology that separates household waste into recyclables and converts the organic fraction of the waste into green energy

• Zero Waste Cities which strive to optimize resource recovery, change behaviours of residents, and minimize the disposal of waste directed to landfills and incinerators.

There are clear differences in waste management practices between developed and developing regions. Waste management practices in developed cities currently focus on optimization strategies for resource conservation, while the approach to waste management in developing cities are often underdeveloped, inefficient, and inadequately managed.

Managing waste efficiently is essential for building a sustainable city; however in many developing regions and cities it remains a challenge, mainly because effective waste management is expensive. Currently solid waste management globally costs about $205.4 billion and is expected to increase to approximately $375.5 billion in 2025.

Effective and sustainable waste management is a huge challenge for many cities. Different cities have different challenges they need to overcome with regard to managing their waste effectively. Ultimately, waste should be viewed as an important resource rather than a problem that needs to be dealt with.

9. Waste Prim

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1 - Source: World Bank, 2019 37

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