Infrastructure Productivity: time to unleash the technology revolution

While the fourth industrial revolution has swept through the wider economy, infrastructure has largely been stuck in the past.

But things are changing. Leaders in the sector are now adopting new technology including 3D printing, data analytics, artificial intelligence and the Internet of Things (IoT) to increase productivity at every stage of the infrastructure life cycle.

Design innovation using the latest technology is evident across all infrastructure subsectors.

In transport, Melbourne’s Metro Tunnel is designed around the use of Communications Based Train Control, a form of high capacity signalling technology that improves headways while improving safety – enabling more trains, more often.

In the telecommunications sector, future deployment of 5G technology will see ultra-fast data speeds and network reliability improvements to support the huge increases in demand for mobile, video and IoT (machine-to-machine) connectivity.

In construction, which has not seen a significant productivity improvement for a long time, a step-change is now in reach. Of leading engineering and construction firms, 42 percent use drones to monitor construction status, 30 percent use robotics or automated technology, 30 percent use radio-frequency identification to track equipment and materials on site, 17 percent use smart sensors to track people on site and 65 percent use remote monitoring.

The disruption caused by infrastructure failure is a major issue for companies, communities and governments alike, with the economic impact of corrosion in the Australian water sector alone estimated at 3-5 percent of GDP every year. So maintenance too is being transformed.

With mature data collection regimes and advanced data analytics software now available, both private and public owners of infrastructure will find it easier to not only monitor assets in real time but also proactively predict and prevent asset failure to minimise disruption to our ailing infrastructure.

Smarter rather than more is the key to infrastructure operations. And here are some real examples.

In the power and utilities sector, companies such as GreenSync are working with network owners in Australia to trial demand management systems that use machine learning, stream analytics and big data tools to make better use of existing infrastructure and defer capital investment.

A major issue in transport is the disconnect between the various ‘modes’ such as road, rail, cycle, and pedestrian, and the ability for the whole system to adapt as demand changes. A new collaboration between government and private sector in Melbourne is taking the demand modelling out of the computers and onto the streets in a ‘transport living lab’. The 4.5 square kilometre test bed will capture a wide variety of real time data enabling vehicles, people and infrastructure to adapt as demand changes.

So what should governments be doing to support infrastructure’s technology revolution?

There are six focus areas:

Rethink data
Data is now the key infrastructure asset and governments need to get better at capturing and using it to better plan and manage infrastructure. Only with high quality information will planners be able to model demand across infrastructure networks and find ways to reduce load and maximise capacity.

Rewrite the plans
No more piecemeal planning. Instead, take an economy-wide and industry-specific perspective to build capability and drive sustainable growth. Increase incentives for innovation, align the diverse regulatory frameworks that fragment industries and educate the workforce for a skills-based economy. The Australian Government’s Smart Cities Plan is a good base, including driving the take up of smart technology to improve sustainability and revolutionise how cities are planned and function.

Review our laws
Current laws and regulations reflect the responsibilities, constraints and opportunities of a previous era, and can stand in the way of potentially beneficial changes; connected and autonomous vehicles, for example, are currently forbidden on most roads. New practices in data collection, aggregation and analysis are challenging law on privacy and security. Tax laws will need to change as electric vehicles erode government revenues from fuel excise. Governments will need to be more forward thinking and agile to adapt to the coming changes.

Recognise its buying power
As a major buyer of infrastructure, governments can drive change throughout the industry. This purchasing power can influence investment in new technologies, the use of data in decision-making, the functioning of supply chains and the skilling up of the work force.

Reform project selection
Australia’s infrastructure project selection processes continue to push construction and traditional new build projects at the expense of more technology-based initiatives to manage demand and enhance capacity. Governments must ensure a wider range of options are considered and the focus must include assessing demand management, capacity enhancement and asset management strategies – not just new construction projects.

The public sector also needs to look beyond the procurement phase to make sure new initiatives are implemented on time and budget. Increasingly, technology projects require a collaborative approach to work with an ecosystem of partners including technology vendors, start-ups, implementation specialists, customer experience designers and other government agencies.

The infrastructure sector is taking its first steps in an exciting new phase of exploration. Current technology applied intelligently can unlock substantial productivity gains.

Now is the time for governments to use their unique position in the economy to maximise the benefits to society.

Read the full KPMG paper Infrastructure Productivity: time to unleash the technology revolution


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