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We also welcome your recommendations for areas to focus on at future roundtables or disruptive projects or practices to consider for site visits.
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The Global Infrastructure Initiative was established in 2012 for two primary reasons: to create a forum for global leaders across the value chain to exchange ideas as well as to identify ways to improve infrastructure delivery and get more out of existing assets. Since its inception, it has evolved from one summit every 18 months into a global community that comes together at roundtables and site visits throughout the year and shares its perspectives in our Voices on Infrastructure publication.
Over the past six years, the infrastructure industry itself has experienced significant change. From 2012 to 2018, the number of major projects that broke ground grew by 77 percent, and the average project value increased by nearly 19 percent. When we convened our first summit in Turkey in 2012, one session was dedicated to digitization. At the 2018 summit in London, it was a primary theme, and talk of disruption and technology permeated nearly every discussion. Most summit participants (85 percent) responding to our most recent pre-summit survey have developed a digital transformation strategy.
We have highlighted the most prominent ideas for collaboration in the following sections. We welcome input, ideas, and feedback on how to pursue these.
Seize the digital opportunity
The summit is organized in accordance with the four stages of the project lifecycle: plan, finance, build, and operate. However, participants in each of these segments reached the same conclusion: the industry must improve its current processes, tools, capabilities and operations to capture the benefits of digitization, automation, the IoT, and analytics. This requires taking an end-to-end perspective across the lifecycle of a large asset.
Develop and invest in future-focused definitions of success
Similarly, the dialogue across all four summit pillars surfaced a need for changes to how we design projects, define their success, and invest in the long-term. Mobility is becoming increasingly autonomous, connected, electrified, and shared. And, emerging technologies are advancing faster than any one project can keep up. Analyzing potential future states in planning processes; designing and building flexible assets that can serve multiple uses; and identifying diverse revenue streams over an asset’s life cycle will be critical to ensuring infrastructure projects deliver the intended benefits—economic, environmental, and social.
Of the survey respondents, 69 percent have changed their long-term planning approach because of these forces, and 80 percent of those said that total life cycle costs and future usability assessments are more prominent or frequently considered in investment decisions. The increased use of data and analytics to support decision making will help optimize existing assets and further refine project selection and design. The use of interoperable, modular components will unlock the opportunity to be more flexible over the course of an asset’s life.
Use collaborative contracts that set expectations beyond financial incentives
Increased use of collaborative contracting models was a prominent theme at the 2017 summit in Singapore, and there was robust discussion in London about how those models can help align all stakeholders and establish outcome-focused measures of progress that consider the impacts on end users. It will be important that collaborative contracts include appropriate risk-sharing, set clear expectations, establish a problem-solving mentality, and offer financial incentives for each stakeholder. Such contracts will also be critical in reconfiguring the supply chain in a world with increasingly industrialized and prefabricated components.
Attract and develop the workforce to evolve with industry needs
New skill sets are required in every phase and by every actor involved in infrastructure projects. While 100 percent of survey respondents who have undertaken digital transformations cited processes and systems as the focus, only 36 percent also focused on talent management and 27 percent on corporate culture. The experience of other industries shows that without a focus on organizational structures and talent, digital transformations are not likely to succeed in the long term.
One idea that emerged from the summit was recognizing that every organization carries responsibility for addressing these skill gaps. Apprenticeship programs can be a powerful tool, but organizations need to consider them an opportunity to up-skill the industry at large rather than just a chance to build their individual talent pipelines.
Importantly, there was widespread recognition that gender and ethnic diversity matters. McKinsey research shows that setting diversity and inclusion priorities and tracking progress is critical in attracting and retaining diverse talent at all levels of an organization.
We hope the GII community will join us in pursuing these ideas. Through potential working groups, roundtables, and site visits over the next 18 months, we aim to further catalyze the transformation that is underway. As progress will only be achieved if all stakeholders act, we ask that all GII participants commit to implement at least one of the ideas before we reconvene in Montreal in 2020.
We sincerely thank our partners: Bentley Systems, Clifford Chance, Spencer Stuart, and Trimble. We also acknowledge our institutional partner the UK Infrastructure and Projects Authority, and our media partner the Financial Times. Without their collective support, the 2018 GII Summit would not have been possible.
We thank those who attended the 2018 GII Summit for their energy and insights. We look forward to staying in touch—and to continuing the conversation.
About McKinsey & Company
Founded in 1926, McKinsey & Company is a global management consulting firm committed to helping institutions in the private, public, and social sectors achieve lasting success. With consultants in 109 locations in 61 countries, working in every industry and function, McKinsey brings expertise to clients around the world.
About the Global Infrastructure Initiative (GII)
Since 2012, McKinsey & Company’s Global Infrastructure Initiative (GII) has convened many of the world’s most senior leaders in infrastructure and capital projects to identify ways to improve the delivery of new infrastructure and to get more out of existing assets. Our approach has been to stimulate change by building a community of global leaders who can exchange ideas and find practical solutions to improve how we plan, finance, build, and operate infrastructure and large capital projects.
Over the years, GII has hosted five global summits, dozens of regional roundtables, and innovation site visits to explore some of the industry’s most exciting advances. The best insights and practices from around the world are featured in our Voices on Infrastructure publication. Our intent is to create a platform that inspires senior leaders to drive change to help close the infrastructure gap, promote economic growth, and contribute to more resilient and secure communities.