New global infrastructure survey finds clear role for private investment

The Global infrastructure Index 2021, a new global study carried out in 28 countries by Ipsos MORI and the GIIA, has highlighted public satisfaction levels with national infrastructure, what citizens think government priorities should be when investing in national infrastructure, and the important role that private capital can play in delivering the transition to net zero.

Prioritising environment over the economy

Across the countries surveyed, the report finds that citizens believe investment in infrastructure supports job creation and economic growth, and, perhaps most importantly, are favourable to the idea of the private sector helping to deliver this investment.

Another key finding is the importance that people place on the environment, with more than half of all respondents feeling it was right to prioritise environmental impacts over economic ones.

Additionally, the environment also ranked as the most crucial factor when governments are planning new infrastructure, a finding which aligns with those of ICE’s 2020 State of Nation report.

How satisfied are the public with infrastructure?

In terms of their level of satisfaction with the current state of infrastructure, citizens across the globe are generally dissatisfied, noting specifically the need for improvements in climate and resilience-related infrastructure. However, levels of dissatisfaction vary greatly within the developed world and emerging markets.

While the global average of satisfaction with infrastructure sits at 39%, it drops to 35% in Britain, which is lower than our immediate neighbours in the G8 at 37%, but higher than the USA at 25%. By contrast, the Netherlands comes out on top among EU countries with a 74% infrastructure satisfaction among its citizens.

It is clear that private investment has played a key role in the development of the Netherlands’ infrastructure. GIIA members alone are responsible for 37,000km of Dutch fibre and account for over 142m freight tonnes through ports annually. These crucial investments have helped to drive public perception of the positive role of private investment in infrastructure in that country.

Private investment is valued

When asked about the role that private investment should play in delivering the infrastructure needed, the majority of respondents across Britain, the G8 and the US feel comfortable with private capital in areas such as road, rail and air networks, utilities such as energy and water, and broadband and other communications. Most of the respondents also find a clear link between infrastructure investment and job creation.

Despite the positive sentiment towards investing in infrastructure across the countries surveyed, citizens clearly feel that not enough is being done to meet current infrastructure needs. These attitudes are strong in the US and the G8, although Britain is the highest with 64% of its citizens opinion that more has to be done.

The need for private investment is particularly strong if we are to achieve the transition to net zero across major economies by 2050. Recent research produced by PwC with GIIA shows that a massive £400bn will be needed over the next 10 years to ensure the UK’s infrastructure can meet the challenges of net zero.

COP26 commitments welcome… but more can be done

Clearly it is encouraging that $130trillion of private capital has been committed to achieving net zero during COP26, but governments need to be thinking much more proactively about the role of private capital in their country’s infrastructure which should also go some way towards driving up satisfaction levels and delivering on long-term climate commitments.

To meet this required level of investment, the UK government needs a more robust system of economic regulation, able to incentivise innovation through a long-term focus on risk and reward and by enabling the uptake of nature-based solutions over grey infrastructure projects. Moreover, there needs to be a concerted effort to ensure the UK remains an attractive destination for foreign direct investment following five years of decline.

In all, the survey shows that citizens around the world are welcoming of private investment in infrastructure and see it as integral to delivering economic growth, supporting job creation and delivering long term ambitions for net zero and climate resilience.

It is now up to governments to work with the private sector to realise these ambitions, by creating strong regulatory and policy frameworks to unleash the potential of private capital in their economies.