An edited paper presented at the CPT Infrastructure Conference, in London on 23 January 2017.

I want to set the scene for today’s conference discussing infrastructure for the UK but in a world context and outline why we are seeing governments investing in infrastructure as a key economic enabler.

It is clear to me, that investment in the infrastructure revolution is key to countries remaining relevant and in creating our future cities today.

Infrastructure

But why does infrastructure matter? Currently, the world is facing an infrastructure funding gap of $57tn. Resilient and effective infrastructure is central to supporting rapid urbanisation.

It has the power to drive social change, create jobs, support businesses, improve the environment and create a better world in which to live. All markets must see further investment in infrastructure in order to maintain a competitive edge.

So through infrastructure investment that provides connectivity, we can see a cycle that in turn drives business attractiveness which then can be channelled to attract business investment, which in turn facilitates investment in social infrastructure that enables housing and drives economic growth, creating our future cities. Sounds simple. But is it? How can we get the right blend of central policy to drive and enable local delivery?

During the US Presidential election, President-elect Trump promised an additional $1trillion dollars in investment into US infrastructure over the next 10 years. Whether or not this investment comes to light, and whatever your views of his politics, his promise signals an issue that many developed countries are battling with: Aging infrastructure is holding back economic growth. Whilst investing in infrastructure enables it.

We recognise that for every £1 spent on construction generates a flat return of £2.84 in total economic activity of which at least 90% remains in the UK. Recently, statistics were published that the economic cost impact of indecision is £48,000/minute.

But, one thing is clear is that we need our clients to be more intelligent and clear on their demands to drive value from infrastructure investment. The UK is on the cusp of a golden age of infrastructure investment, with over £400bn set out in the National Infrastructure Plan for the ten years to 2022 alone.

Yet society’s needs are changing, and we can no longer just rely on what the Victorians built – infrastructure must meet tomorrow’s needs. The case for this level of expenditure is strong, and enjoys cross-party political support – some would say for the first time in generations. But this level of ambition comes with significant challenges.

Aside from the question marks around funding and supply chain capacity, there are widespread questions around government’s and the private sector’s ability to act as effective clients in their sponsorship and control of investment, and ensure value for public money and delivery of effective outcomes.

The government recognises the need for greater control, and has established the National Infrastructure Commission (NIC) and the Infrastructure and Projects Authority (IPA) to strengthen the central oversight and monitoring.

At EY we also recognise we need to support our clients on their journey to better programme delivery as more informed intelligent clients. Our Intelligent Client report uses our extensive experience in complex capital and transformation programmes to help clients become more effective in their sponsorship and oversight of large complex programmes and help realise infrastructure ambitions.

Cities

Today, the global urban population is 54%. In 2050, the UN predicts that the global population will be 9 billion, and the global urban population will be 66%. That’s 6.3 billion people living in cities like this one.

Cities are taking on ever-greater importance. They are our most enduring and stable social structures. They have become the world’s dominant demographic and economic groupings.

The population of the greater Mexico City region or, indeed, Shanghai are larger than that of Australia. And China’s urban Chongqing region is an area the size of Austria. The megacities of the future will be larger than many of the nations we know today.

However, as the competition for foreign capital investment into cities grows, success is no longer purely about size.

Aspects such as innovation, liveability, and an ability to transform and adapt to a changing socio-economic landscape, are becoming increasingly important.

We need cities for citizens – or cities for future city users.

In this environment, the role of Future Cities is clear.

As we launch our EY Future Cities report this month, we recognise that we have no choice but to design smart, connected and sustainable infrastructure to accommodate this global growth phenomenon.

The mega trends of the urban world are putting cities and their infrastructure under increasing pressure all over the world. Cities are growing in size and with countries like China developing two multi-mega cities of over 100 million people and with 13 out of 14 of the new mega cities through to 2030 being in China - we need to ask ourselves what does this mean for the future cities of the UK?

It is important that in developing our future cities (and even Garden Villages) today we to create a sense of community and wellbeing for citizens. Otherwise rapid urbanisation is not sustainable.

Certainly with devolution comes greater power, coupled with a need for strong leadership and governance. UK cities have to collaborate to create critical mass to compete on the global stage. Equally collaboration across cities is key, with mayoral and city leader egos having to be left at the door in favour of pooling information, knowledge, resources and ambition to compete globally. We have some great examples too with the Northern Powerhouse, Midlands Engine and Scotland’With London needing to continue to grow and evolve alongside other UK cities to maintain its position too.

What is apparent is that infrastructure is that key enabler and stimulus for achieving the economic growth in our cities.

More information

By Amanda Clack 

RICS President

Partner and Head of Infrastructure at EY