What Are the Top 10 Global Infrastructure Industry Trends This Year?

KPMG "Net-zero Trend in Infrastructure Industry to Strengthen This Year"

[Asia Economy Reporter Park Jihwan] This year is expected to be a very important year that will define the sustainability and resilience of the infrastructure industry beyond COVID-19.

Global comprehensive accounting and consulting firm KPMG introduced the top 10 global infrastructure industry trends to watch in 2021 and analyzed long-term trends that will impact the infrastructure sector over the next decade in its report (Emerging trends in infrastructure) released on the 2nd.

KPMG presented the top 10 infrastructure industry trends as follows: △Infrastructure planners overcoming uncertainty △Changing urban values △Heightened borders △Evolving infrastructure supply chains △Diversifying infrastructure finance △Transitioning to more equitable and eco-friendly practices △The importance of resilience to climate change risks △Hyperconnected society and digital infrastructure △Expansion and transformation of public infrastructure services △Closer public-private partnerships.

Due to the long-term cycles characteristic of the infrastructure industry, current uncertainties are making future planning difficult. It was analyzed that infrastructure industry leaders need to move flexibly through continuous change and innovation. Infrastructure investors are focusing on establishing plans that align with long-term goals but can adapt flexibly depending on circumstances. Infrastructure designers are expected to pay more attention to technology utilization and data analysis.

The fundamental value of cities is also being redefined. In the past, cities developed around the CBD (Central Business District) were preferred, but recently, with the advancement of digital networks, the '15-Minute City,' where all living infrastructure is concentrated within a 15-minute radius from home, is gaining attention. KPMG predicted, "As the role of cities recovers after the end of COVID-19 and finds a new balance, urban planners and infrastructure managers will redefine the value of future cities and infrastructure based on the changing needs of citizens."

Last year, global logistics supply chains were disrupted due to policies of national prioritization and trade wars. The closure of borders caused by COVID-19 paralyzed logistics systems and functions, causing chaos across all logistics infrastructure sectors.

Investment in areas that integrate current infrastructure with digital technologies, such as smart ports and airport automation systems, is expected to increase. Operators of major infrastructure such as ports and airports are anticipated to create value based on data and adopt various technologies for eco-friendly operations.

Global infrastructure and construction companies suffered significant damage due to disruptions in raw material supply and difficulties in equipment and workforce procurement caused by COVID-19. The report stated, "Companies will increase investments in resilience and focus on diversifying supply chains," and predicted, "Active investments will be made to strengthen national and regional supply chains and develop logistics infrastructure." Additionally, to build stable supply chains and networks, some companies are expected to adopt strategies such as reshoring or near-shoring to minimize supply chain risks.

New financing methods are being introduced mainly in emerging markets, diversifying infrastructure finance. With the continuation of a low-interest-rate environment, institutional investors have begun expanding investments in infrastructure assets as alternative investment products. This is expected to lead to the creation of various infrastructure investment products and continuous inflow of new investors. KPMG explained, "Along with growing interest in ESG (Environmental, Social, and Governance), the increase in sustainable investment products continues, expanding investment options available for infrastructure projects and increasing the diversity of infrastructure finance."

There is also a shift in awareness that environmental considerations must be included in the infrastructure sector. Last year, net-zero, meaning carbon neutrality, was a core topic in the infrastructure industry and is expected to be emphasized further. The report explained, "Investor interest in sustainable products is increasing, and future infrastructure industry operations will focus more on fairness, environmental friendliness, and social impact, expanding green infrastructure and green energy."

Interest in infrastructure resilience to climate change risks is also rising. Investors and governments are expected to mandate disclosures related to climate risk for infrastructure assets. Accordingly, broader environmental risk management and resilience planning will be required. Furthermore, as we enter the Era of Hyperconnectivity, infrastructure expansion to activate the digital economy is necessary, with 5G and cloud technologies identified as key technologies creating innovation and value in the infrastructure industry.

Kim Hyojin, Infrastructure Industry Leader at Samjong KPMG, said, "Experiencing temporary suspension of public infrastructure services due to COVID-19 demands a new definition and approach to infrastructure construction," and suggested, "It is necessary to accurately understand users' needs for infrastructure from past, present, and future perspectives and to consider infrastructure not simply as an investment asset but from the viewpoint of continuous evolution of services and quality experienced by end users."

This content was produced with the assistance of AI translation services.