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New civil infrastructure will be digital to the core

by Mark Raskino  |  December 1, 2016  |  Comments Off on New civil infrastructure will be digital to the core

Following this year’s Brexit vote and the Donald Trump election there is a distinct policy shift in British and American politics and economics. The idea of pursuing fiscal stimulus by investing in national economic infrastructure is back in vogue. If this new report by the OECD is anything to go by – the mood might spread to other countries too. Assuming leaders do what they say, then we can expect multi-year investment in the kind of infrastructure that tries to make economies more productive at a fundamental level. However I’m not just talking about a couple of years here, more like the next couple of decades. A lot of what’s needed is very physical infrastructure – the energy, water and transportation systems that power economies. Grids, pipes, bridges, railways and roads are needed to drive the knowledge economies, just as much as manufacturing ones. In advanced countries the physical infrastructure we rely on everyday is often old and no longer fit for purpose. Renewal is necessary but in this era it will be different. The new civilization infrastructure will be digital to the core

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Look at the underside of either the Golden Gate bridge in San Francisco or Tower Bridge in London and you will see the same key components: hand made rivets. These are iconic objects of the last great technological age that was built on coal and steel. Red hot, metal fixing pins hammered into place by expert craftsmen to hold steel plates together. The ‘business models’ used to finance such great structures were also from that era. Public works were often funded from central taxation or borrowing and often paid back in a similar way. The centralized decision making about creating and locating such structures was also a product of the limitations of those times – when the information gathering cost of consultation was high. From the finding of builders to the inspection and quality assurance of components – most of the infrastructure of the early and middle 20th century was constructed within the limitations of a pre-internet world. It was calculated on slide-rules, modeled in balsa wood, planned on paper, built by muscle, maintained to a schedule, insured by syndicates and paid for from the public purse. The future won’t be the same.

Our recent Gartner Symposium keynote script included this line:

“Our new world will be, ecosystem-driven, crowd funded, socially agreed, 3D printed, drone inspected, sharing economy provided, usage metered, predictively maintained, and blockchain assured. The next infrastructure – civilization infrastructure – is as digital as it is physical. It will be fueled by business eco-systems and we CIOs – together – will build most of it.”

I’m quite confident we could have added more major technology enabled methods to that little list. It points to an array of very powerful new digital tools we now have to help design, agree, fund, build and apportion efforts costs and responsibilities. Our use of the term civilization infrastructure was proposed by my colleague Jorge Lopez months ago, during our internal competitive process for finding the best new ideas. The term is originally attributed, I believe, to James Fallows, a writer for The Atlantic.

Many people will worry that a big Keynesian style wave of borrowing and spending on infrastructure will be difficult to achieve and perhaps perilous for our economies because of the starting levels of debt. But if we apply all the modern digital tools available to us, the patterns of development, contribution and yield maximization could be much better than the historical average. The 60s and 70s were awash with grand projects that in retrospect probably didn’t pay back well.  Bridges and roads to nowhere, maglev trains that never arrived, telephone based TV text predecessors to the internet, supersonic air travel.. Too often it seemed like governments backed duds and then couldn’t get them to pay back. But that was then, when we simply didn’t have the connected marketplace of minds on tap that we have today.

We will be able to construct a lot of modern digital to physical infrastructure via complex collaborative ecosystems of ecosystems of market actors that include many two person companies working side-by-side with the largest corporations. We will be able to construct many physical things – from components to whole structures – in new materials and design paradigms using robots and 3D printers. The sharing economy, sometimes called gig economy will enable equipment, labor and talent resources to be brought to bear on a dynamic just-in-time basis, far more efficiently.

But what should we build and where should we put it?  Do we want more high speed rail systems or should we take the bold risk of moving to Hyperloop?  Should we place wind-farms onshore or offshore? Can we rely on new-nuclear energy for base load or is it too risky? Do we want to re-onshore some production for jobs, even if it comes with the need to build unsightly new chemical plant and pipelines locally?  Should our infrastructure be built to support further high density urbanization with more canyons of skyscrapers? These and many other contentious questions can be resolved by societal debate. Social technology gives us the means to have those big discussions, to weigh the pros and cons and to decide. We may still be in the infancy of that new kind of societal discourse – with its trolls and fake news.. but eventually, I think a generation will grow up for whom it is natural and native and they will make it work for us.

When it comes to financing, perhaps parts of the new civilization infrastructure will be crowd funded. Many individuals could in effect ‘vote with their investment dollars’ rather than relying on traditional styles of government or corporate investment alone. This list of crowdfunding projects shows that today, it is possible to raise tens or even hundreds of millions of dollars for an initiative. When it comes to paying back the investment the ways we can track asset use and apportion payment are far more sophisticated. These will surpass E-Z pass style electronic toll booths. Every autonomously driven yard or meter will be tracked. Vibrations and damage will measured. The economic value passing over or through an asset will be known and its charge varied – perhaps on ability to pay or perhaps on other factors such as environmental externality costs. With usage based insurance and telematics becoming so unremarkable these days,  surely nobody can doubt such methods are viable.

Predictive maintenance of assets is a massive and rapidly growing area of endeavor in the industrial world. One of the biggest cases in our book Digital to the Core is GE.. a company that has made online analytics of aero engines, power turbines and locomotives central to its business strategy. In addition to all the connected live industrial machines, lighting and HVAC systems there will also be detailed inspection of static and more passive structures. Streetscapes will be almost continuously LIDAR mapped by passing cars. Aerial drones will do the same for electricity power lines (video), pipelines and bridge supports.

But how will we bring together all the parts, the people, and the standards in such a rapidly advancing digitally enabled infrastructure age? Trust, between parties, around the exchange, provenance and traceability of parts, results, datasets and findings – will become really important. We will need to rapidly and continually evolve new transaction ledgers and recording systems for new areas of collaboration and exchange. Blockchain appears to be a technology method that will help us with that.

The building of the new digital-physical civilization infrastructure will require many companies to interact though their digital business platforms connected together with APIs. For that to happen CIOs and CEOs will need to change the culture and capabilities of their companies. Graham Waller and I wrote the book Digital to the Core to help leaders navigate that journey. It is available in print, e-book and audio book formats from Amazon and elsewhere now.


Category: ceo  digital-business  economy  management  strategic-planning  

Mark Raskino
VP & Gartner Fellow
15 years at Gartner
30 years IT industry

Mark Raskino is a vice president and Gartner Fellow in the CEO Research group. Mark creates advice and analysis for CEOs on technology related and digital business strategy and change Read Full Bio

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