Global Head of Research, Infrastructure
Infrastructure networks form the backbone of a modern economy and are a key driver of growth. However, since 2008 most governments have struggled with both funding limitations and a lack of effective policies to promote economic growth.
This report discusses the need for developed economies to adopt a revised model of economic infrastructure development to attract higher levels of private investment.
Our research indicates that new investment is running at low levels in most developed economies, as governments struggle with high debt burdens and an insatiable demand for social services. Countries like France debate the issue of whether they already have enough infrastructure. Such views ignore the reality that infrastructure, like all assets, has a defined life. Failure to maintain adequate levels of investment will lead to a spiral of reduced future economic growth and increased public debt levels. The Grow America Act in the United States (US) shows just how expensive trying to catch up after years of inadequate investment and maintenance can be.
So, how do modern economies get enough infrastructure to sustain growth and living standards? We believe unlocking private funding for greenfield economic infrastructure development would be a good start.
This report discusses why institutional investors are unimpressed by greenfield development and focuses on the issue of making these projects more attractive to private investors. Unlocking private investment in this area will assist developed economies to kick start sustainable economic development. Our objective in presenting this research is to stimulate discussion on new risk sharing models.
Read the full report here.