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1、KPMG IConverging Trends 2033:The long viewThe view from 2033This report offers a view into the world in 2033 for the infrastructure sector.To create this report,we asked KPMGs global infrastructure leaders to use their experience and insight to put themselves in the year 2033.We had them tell us wha
2、t they saw,provide their opinions on how things might change,pick some winners and losers,and provide insights and ideas to help readers in the mid-2020s envision the world of 2033.“Dear mid-2020s reader.We come to you from 2033 with a message of great hope.But also,with warnings of great risks.The
3、path from where you are in 2023 to where we will be in 2033 will at times be terrifying.Yet,with the right choices,it will also be extraordinarily rewarding.In some respects,the world of 2033 seems much changed.From here,we cant recall the last time we touched a keyboard,smelled the noxious fumes of
4、 petrol or physically entered a government office.But in other ways,change has been painfully slow.Even with all the innovation of the past 10 years,we still dont have a practical and achievable path to our Net Zero goals.What has changed dramatically,however,is our mindsets.We have recognized that
5、market forces alone will not deliver the fundamental change in urban transformation,sustainability or innovation that are required in order to solve some of humanitys most pressing challenges.Rather than attacking the problem from all sides,in 2033 we are taking a system model approach that encourag
6、es holistic thinking over uncoordinated tactical actions.We understand that profit,planet,prosperity and equality are not mutually exclusive.We have realized that the pursuit of perfection has impeded progress.Instead of putting our hopes in silver bullet solutions,we are now focusing on encouraging
7、 optionality,flexibility and agility in infrastructure planning and development.Multiple pathways have emerged as governments move to achieve their goals within their own particular context and culture.And the gap between the winners and losers is starting to widen.”Within the reality of todayWith a
8、 view to the future,this report was written by KPMG infrastructure leaders in 2023.The idea is to explore some of the vast range of scenarios,opportunities,risks and challenges ahead.Many different evolutionary paths and many different outcomes lie before us.This report paints one such path.Yet the
9、reality of the future will depend on what policies we formulate and decisions we take.To make this report practical,we focused on three key,yet interdependent themes that threaded their way through every edition of Emerging Trends in Infrastructure over the past decade Cities,Sustainability and Inno
10、vation.We drew upon our own predictions from that annual publication to provide important context and continuity.We believe the trends and topics raised in this report can have a massive impact on the evolution of the infrastructure sector and its broader impact on the economy.Infrastructure will pl
11、ay a key role in determining the outcomes we achieve as communities,countries and globally.It is time for sector leaders to start thinking differently about the future and its role in delivering it.We hope this report provides insights and inspiration to the sector as we reshape our collective capab
12、ilities and focus to face the trends and opportunities of the future.On behalf of KPMGs global network of Infrastructure professionals,we encourage you to contact your local KPMG member firm to discuss the ideas raised in this report or to share your view on what the world might look like in 2033 fo
13、r the infrastructure sector.Stephen C.BeattyGlobal Head of Infrastructure and Head,Global Cities Center of Excellence,KPMG International Partner,KPMG in CanadaSharad SomaniHead of Infrastructure,ASPAC region Head,Infrastructure Advisory,KPMG InternationalPartner,KPMG in SingaporeMichele ConnollyGlob
14、al Head Corporate Finance and Head of Infrastructure EMA region,KPMG International Partner,KPMG in IrelandConverging Trends 2033:The long view|2 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Table
15、 of ContentsSustainable development10 A look back at past 10 years What does the next 10 years look like?Who are the winners and losers?How can we get there?What does this all mean for infrastructure players and providers?Cities04 A look back at past 10 years What does the next 10 years look like?Wh
16、o are the winners and losers?How can we get there?What does this all mean for infrastructure players and providers?Innovation16 A look back at past 10 years What does the next 10 years look like?Who are the winners and losers?How can we get there?What does this all mean for infrastructure players an
17、d providers?Converging Trends 2033:The long view|3 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.CitiesInnovationSustainable development 2023 Copyright owned by one or more of the KPMG Internation
18、al entities.KPMG International entities provide no services to clients.All rights reserved.Converging Trends 2033:The long view|4CitiesA look back at the past 10 yearsThings were simpler back in the early 2010s.Cities stood as bastions of economic growth and activity.Central Business Districts(CBD)h
19、ummed with productivity.Digitization was futuristic;smart cities were little more than a concept.Few truly cared about decarbonization.In 2013,our Emerging Trends report encouraged governments to view urban infrastructure as a driver of economic growth.In 2015,we were talking about the need to enhan
20、ce urban transit to help unlock that economic activity.The mantra guiding city infrastructure planners back in those days was build,build,build.Yet a more holistic approach to city development was starting to emerge.Indeed,in our 2014 edition,we noted a move towards creating urban environments led b
21、y themes around sustainability,mobility and quality of life.Over the next few years,the concept of live,work and play started to define our forward predictions.But the idea was generally focused around bringing live and play into the city rather than moving the work outside of the CBD.The pandemic u
22、pturned the discussion in 2020.Big questions were asked about the future of cities urban centers and commercial real estate in particular.It was clear that the role played by the CBD was changing rapidly.As the long-term impacts of this shift started to crystalize,expectations of a city started to b
23、roaden some wanted to stay in the cities and keep them vibrant;others wanted to move to small towns and encourage localization.The past two years have brought a radical shift in the purpose of cities.Our most recent Emerging Trends reports talk of new cities like NEOM in Saudi Arabia or the(as yet u
24、nnamed)city being built to replace Jakarta as the capital of Indonesia being designed with new technologies and ideas at the core.At the same time,governments are starting to create a vision for their cities that are consistent with the norms and customs of their own society.The traditional approach
25、es to city building are changing.The past two years have brought a radical shift in the purpose of cities.Converging Trends 2033:The long view|5 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Innov
26、ationSustainable developmentCitiesWhat does the next 10 years look like?The late 2020s will likely be seen by future generations as the era of urban revolution.Industrial-age norms will start to fall away.Hives of vibrant,sustainable activity will grow out of the existing concrete.We will start to r
27、ecognize that we are a part of not apart from nature.We will develop thinking and approaches to deliver whole system change.And new ideas will emerge,thrive and peacefully coexist.The era of mass production will give way to an era of mass customization.Instead of building monolithic infrastructure a
28、ssets that serve the average citizen,we will start to gravitate towards smaller infrastructure that caters to the individual citizen.Rather than forcing everyone to come to the big hospital,well work out how to bring tailored healthcare to the patient.For some cities,the focus for this transformatio
29、n will be the digitization and integration of city infrastructure and services.Pressure to transform will come from users looking for a better,more effective experience and from owners looking for more efficient and reliable operations.Digitization will increasingly be a key part of the solution,sup
30、ported by strong data security and privacy protections.As assets and services become more digitized,they will also become easier to integrate.Depending on the regulatory frameworks in place(and the individuals willingness to have their information digitized),it will start at the sectoral level mobil
31、ity and transit,health and social services,government records and registrations but will rapidly coalesce into a system-of-systems view that provides unprecedented insight to planners and operators,and unprecedented experiences and value to users and residents.At the same time,pressing challenges ar
32、ound climate and social risks will continue to bubble up.Demand for social equity will ferment positive disruption.Views on the purpose and value drivers of a city will rapidly evolve,influenced in large part by expectations around decarbonization,livability and more equitable access to services and
33、 infrastructure.What that means in practice will depend on the culture of the city some will find their purpose in delivering top-notch infrastructure and services;others may focus on entertainment,shopping or tourism.Rather than a monocentric city design with an economic CBD at the core,many leadin
34、g cities in 2033 will transition towards a polycentric model that enables attractive place-based opportunities for citizens to live,work and play within their neighborhoods.The idea of creating a 15-minute city will turn out to be impractical.But,instead,cities will focus on creating 15-minute nodes
35、 that bring the services to the people instead of forcing the people to the city.Planning and development will be based on a multifaceted view that prioritizes purpose,livability and equitable access alongside economic growth,jobs and capital expenditure.We can have it all at once;wisely considered,
36、there is no need to choose amongst these objectives.New infrastructure investments will be designed to maximize social and community movements and the value they create schools and affordable housing will be built over top of new stations;new lines will be created to bring satellite populations with
37、in reach of the city nodes and its services.The path different cities take will be influenced by the age of the city.Many older cities will struggle to leave behind their existing assets and mindsets in order to plot a new course.Cities will need to think about how they will plan for and finance the
38、 upgrade of existing buildings to achieve Net Zero goals.In some cases,the answer will be to start fresh either by turning former villages or suburbs on the fringes of the old city into new satellite cities,or by building something completely new and unhindered by preconceived models and legacy syst
39、ems.Others will work to upgrade the infrastructure and systems they already have,leveraging their existing investments and strengths to drive their transformation.Cities will focus on creating 15-minute nodes that bring the services to the people instead of forcing the people to the cityConverging T
40、rends 2033:The long view|6 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.InnovationSustainable developmentCitiesWho are the winners and losers?People living in or around these cities in 2033 shoul
41、d see some of the tangible efforts by city officials to improve their quality of life.Interacting with city services and infrastructure may be more dynamic,intuitive,user-friendly and experience-driven.City governments,leaders and service providers have hopefully worked out how to use new technologi
42、es to listen to the weaker voices within their constituencies.The shift to mass customization will make services much more personal,valuable and intuitive.Public transit will be more integrated,effective and efficient(in fact,in some cities,even the rich will prefer to take public transit,its so eff
43、icient,so clean and so high quality).There will be ample opportunities to balance work and life.New jobs,investment and talent will flow into the city.Sadly,this is not the future for every city.The vast majority of cities will struggle to escape the status quo.More often than not,the problem will b
44、e getting city leaders to square away the mismatch in timeframes between the political and the pragmatic;far too often,they will be thinking in 5-year terms rather than 100-year transformations.Many will also be overly indebted to legacy investments and mindsets to make the change.Others will simply
45、 be over indebted.The risk is that this will lead to a notable bifurcation between the cities that are rapidly transforming and those that are struggling.The reality is that the network effect is particularly strong in cities the more people and business activity a city attracts,the more people want
46、 to go there.As the magnets polarize towards the cities that are transforming,they weaken their pull towards those being left behind.Rising levels of inequality will challenge the citys social license.This will offer an opportunity to the nimble Tier 2 or Tier 3 cities to leapfrog those currently in
47、 the lead;Tier 1 cities will need to glance over their shoulders while deciding how best to proceed.City governments,leaders and service providers will have worked out how to use new technologies to listen to the weaker voices within their constituencies.Converging Trends 2033:The long view|7 2023 C
48、opyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.InnovationSustainable developmentCitiesHow can we get there?Our vision of the future suggests there are five key factors that may separate those cities that
49、 will lead the transformation from those that will lag.1 A shift in mindset.The leading cities will be the ones that seek out new ideas and new models for service delivery.Their infrastructure planners and developers will be focused on delivering outcomes rather than inputs,measuring themselves by p
50、roductivity gained instead of capital invested.They will redesign their processes to prioritize objectives that deliver on purpose,livability,sustainability and equitable access goals as well as economic and financial.They will be open to new ideas,encourage transformation and embrace change.2 Techn
51、ology at the core.The leaders will be the ones that recognize early that technology and digitization can help deliver massive productivity gains without having to build a massive amount of new infrastructure.They will rapidly assess and adopt new technologies.They will encourage digitization at the
52、process,asset and system level.They will explore new models,foster new technology ecosystems and promote integration.They will put open data at the heart of their strategy and development.3 Collaborate across the ecosystem.The leading cities will take an ecosystem approach to transformation,working
53、with a broad range of private sector,academia,startups,technology companies and service providers to deliver on initiatives that promote livability,sustainability and equitable access.Perhaps more importantly,the leading cities will engage in much more collaborative interactions with residents and u
54、sers to fully understand their expectations and to co-develop new ideas and service models.4 Taking a systems-thinking approach.The leading cities will not transform in silos.They will take a whole of government approach,creating a holistic roadmap that brings all government departments,services and
55、 capabilities along on the journey.Process redesign will be customer-centric rather than department specific.Processes will be seamless across government departments.Infrastructure will be assessed,prioritized and procured centrally,against a range of social,environmental and economic criteria.Playi
56、ng a long-term strategy.The leading cities will be the ones that take a 100-year view of the transformation they are planning while,at the same time,embedding flexibility and multi-purpose design elements to allow future generations to adapt their infrastructure as needed.Rather than locking into ex
57、pensive new technology solutions,they are setting up the enabling conditions to encourage circular economy models and working with the private sector to create more sustainable funding models.They will put pragmatism over politics to deliver for future generations.Prioritize objectives that deliver
58、on purpose,livability,sustainability and equitable access goals as well as economic and financial.5Converging Trends 2033:The long view|8 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.InnovationSu
59、stainable developmentCitiesWhat does this all mean for infrastructure players and providers?Our vision of 2033 suggests that our current approach to how infrastructure is prioritized,funded,designed,developed,operated and maintained will change dramatically.All players in the infrastructure sector s
60、hould start thinking differently about a sustainable future.Governments and infrastructure planners will need to start thinking in terms of productivity gains and outcomes delivered rather than capital invested and concrete poured.They will need to define their strategic plan,understand their ESG am
61、bition and set their objectives.Cities will need to be able to embed those objectives and a range of non-financial measures into their investment criteria for infrastructure.Data enablement,gathering,measurement and insights will be key.Developers and operators will need to focus their efforts on al
62、igning their assets and services to the unique objectives of each city with a particular focus on digitization,decarbonization and the environment,social value,talent,technology,access and ease of integration.Developers and operators will need to become much better at demonstrating how they can meet
63、 the new assessment criteria.Investors will also need to define their priorities both financial and non-financial and set their objectives and assessment criteria accordingly.Indeed,by 2033,it will be commonplace to prioritize Net Zero goals and social value alongside financial returns.That will req
64、uire investors to shift the way they value assets to reflect the non-financial objectives of cities while working closely with asset managers to drive more value through technology adoption.The real magic happens where the objectives of the city intersect with the objectives of the investors.Our cur
65、rent approach to how infrastructure is prioritized,funded,designed,developed,operated and maintained will change dramatically.Converging Trends 2033:The long view|9 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All r
66、ights reserved.InnovationSustainable developmentCitiesSustainable developmentConverging Trends 2033:The long view|10 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.InnovationCitiesSustainable devel
67、opmentA look back at the past 10 years Elements of the sustainability agenda have been central to our Emerging Trends series every year since 2013.Though it wasnt always called that.In the early days,we were talking about it in terms of resilience and natural disasters,social stability and disconten
68、t,transparency and corruption.But by 2017,our Emerging Trends report suggests real focus was starting to be placed onto sustainable development.We were warning governments that they would need to start accounting for the social and environmental impacts of investments.We encouraged investors and pol
69、icy makers to start thinking about how environmental and social impacts could be measured.And by the end of the decade,we declared that sustainability had become mainstream:citizens demanded it,governments measured themselves by it,investors valued it.The pandemic sharpened minds and broadened the a
70、genda.Our Emerging Trends report in 2021 showed remarkable optimism in the midst of the pandemic.We hoped the sudden drop in productivity globally would allow people,governments and companies to envision a low-carbon world.We noted that investors were starting to draw clear lines around how the ESG
71、agenda would influence capital flows.We warned companies with poor ESG performance that they would start to see their financing at risk.And in the heady days of the post-pandemic economic boom,we were in the camp with big hopes that the rebuild would be greener and fairer.Over the past two years,our
72、 Emerging Trends report suggests that attitudes and ambitions have hardened.Two years ago,we saw signs of the infrastructure sector beginning to coalesce around the actions that needed to be taken to achieve more equitable access and to decarbonize the industry(against a backdrop of climate-related
73、and socio-economic events that brought the sustainability agenda into peoples backyards).There was growing consensus that the world needed to move smarter,quicker,better and faster.The past 10 years of Emerging Trends reports paint an interesting picture of how sustainable development became more ma
74、instream.What started out as a conversation about resilience,adaptation and mitigation has now moved on to discussion about sustainability and the need for a whole systems approach.Sustainability had become mainstream:citizens demanded it,governments measured themselves by it,investors valued it.Con
75、verging Trends 2033:The long view|11 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.InnovationCitiesSustainable developmentWhat does the next 10 years look like?Converging Trends 2033:The long view
76、|12 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.InnovationCitiesSustainable development(a scarce resource that is priced according to scarcity)to solar and wind(abundant resources that are essen
77、tially free),will suddenly become an obvious choice.There could be interesting downstream implications for a global economy and power structure that has historically been dominated by access to resources.In differing ways and with varying levels of commitment,infrastructure will lead the way in gove
78、rnment strategies.Governments and the public at large will recognize that infrastructure construction and use is linked to the vast majority of societys carbon emissions;the solutions must be found there as well.And societies will take it upon themselves to use their procurement of infrastructure to
79、 drive increased value and lower carbon intensity for their investments.New construction techniques and approaches will be part of the solution;getting more value/productivity out of existing infrastructure will also be key.In the medium term,academia,policy leaders and governments will take the lea
80、d by encouraging a Whole Systems Approach that considers biodiversity,resilience and adaptation,carbon and the environment,and social value at all stages of decision making and reporting.They will find ways to align the macro climate motivations of society with the micro motivations of citizens.They
81、 will build up InfraTech ecosystems focused on delivering the value of sustainability.They will provide clear guidance and policies around their expectations and goals for a sustainable transformation.They will set the groundwork for the private sector to invest.While progress will start slow as is
82、often the case with evolutionary changes it will quickly pick up speed.By 2030,we will have a better understanding of our role in the planets diverse and complex systems and a more plausible path to Net Zero by 2050.But we will also have realized that externalities matter more than we had anticipate
83、d.Sadly,we will have already broken our 1.5 degree temperature rise limit.We may not have solved the green concrete or green hydrogen riddles,but we will be putting lots of investment into R&D and the commercialization of new ideas.Simply put,we wont be where we wanted to be.But we will finally be o
84、n the right path.The mindset shift should have taken hold.In 2033,we may be in the process of pulling ourselves back from the cliff edge.There wont have been any silver bullets.It will have been an evolution,not a revolution a triumph of progress over perfection.And while certain targets will have b
85、een missed,the world will likely be rapidly adapting and embracing a more regenerative,sustainable and equitable future.Two things will likely come together around 2025.The first will be the stark realization in the West that we have already blown the 1.5 degree limit set in the Paris Agreements.The
86、 2023/2024 El Nino in the Northern Hemisphere is unleashing unprecedented weather events around the world.Communities will experience localized biodiversity collapses.And new data will show unequivocally that the carbon deficit is actually growing faster than ever before.Around the middle of the dec
87、ade,the world will realize that time is up on the decarbonization agenda and that a new mindset is required.At the same time,however,new hope will be found.The second thing that will happen around 2025 is that the world(academics,regulators and governments in particular)will get much better at calcu
88、lating the true value and benefits of their investments as well as the financial and carbon related costs.As mindsets shift,it will become blindingly obvious that profit,people and planet can exist together simultaneously the renewable lightbulb will come on.Decision-making will be based on more tha
89、n just financial data;environmental and social impact data will be readily available and understandable.With value clearly defined and measurable,investors and owners will start committing serious investment to meeting their sustainability goals.Interestingly,these two trends will catalyze a signifi
90、cant mindset shift in the way we think about the problem and the solutions.Instead of thinking in terms of a carbon economy based on scarcity,we will start thinking in terms of a renewable economy based on abundance.By way of example,shifting away from oil Instead of thinking in terms of a carbon ec
91、onomy based on scarcity,we will start thinking in terms of a renewable economy based on abundance.Who are the winners and losers?Sustainability is a broad bucket and different aspects hold varying degrees of importance to different populations and cultures.Not surprisingly,there will also be many di
92、fferent evolutionary paths to sustainability.Some will prioritize environmental,social and governance differently.And there will be a vast range of models and ideas that will be advanced,tested and adopted.While the debate in the early part of the decade continues to swirl around who should carry th
93、e cost and burden of sustainable investments,the quantification of benefits by mid-decade will turn the equation around.Our view suggests that developing markets will likely have the upper hand.With value correlated to need and impact,the developing markets will attract outsized investment flows(ass
94、uming they can turn their project ideas into investable assets,while also managing the Governance and Social aspects of the ESG agenda).Many developing markets also sit on an abundance of renewable energy,allowing them to unshackle themselves from energy dependence and variable energy import costs.T
95、he transition will be more of a challenge for developed markets,which are often hampered by legacy infrastructure,sunk cost mindsets and entrenched interest groups.Yet here,too,the value of sustainable development will rapidly turn historic equations on their head.Indeed,as the true value of sustain
96、able development becomes clear,we will see innovative and nimble specialist investors snapping up many of the dirtiest assets knowing that cleaning them can hold great sources of value.Sunken investments will be shifted off the books and capital recycled into newer and cleaner assets.With value corr
97、elated to need and impact,the developing markets will attract outsized investment flows.Converging Trends 2033:The long view|13 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.InnovationCitiesSustai
98、nable developmentHow can we get there?Looking ahead,we see five evolutionary changes that can set markets on a new trajectory towards achieving their sustainability and regeneration goals.1 A system model mindset.This is about taking a whole system approach to our activities,our organizations and ou
99、r decision-making.It requires decision-makers to think about not just scope,cost,risk and time,but also environmental impact,social value,resilience and biodiversity in every decision they make.In doing so,leaders will be much better prepared to align their ambitions,actions,accountability and repor
100、ting across all eight elements.A system model mindset also ensures that the whole system is speaking the same language and aligned on outcomes.2 Measured benefits.The most powerful driver of long-term investment will be the quantification of the specific and measurable benefits of sustainability.Gov
101、ernments will start to require departments to accurately measure the value they generate from their investments.Investors will create their investment plans based on clear value drivers(and clear government policy).Decision-makers in both public and private sectors will be able to compare their opti
102、ons and make better long-term decisions for all their stakeholders.Investment will start to flow to the worthiest projects.3 Starting with infrastructure.By some measures,infrastructure construction and use accounts for upwards of 80 percent of greenhouse gas emissions,meaning that most of the signi
103、ficant early wins can be delivered by the infrastructure sector.Since government is most often the ultimate owner of the assets,they can play a major role in driving forward the agenda by focusing on decarbonizing the infrastructure and construction sectors.This,in turn,should help establish the rig
104、ht markets and technologies to drive public sector action at a larger scale.4 Unlocking abundance.This shift will be particularly gradual.But,over time,public and private market leaders will increasingly see the renewable economy as a source of abundance and potential value creation.Instead of askin
105、g how we will reduce our reliance on oil,we will be asking how we can increase our share of solar and wind and maximize its economic and environmental value across the supply chain.Its a subtle but powerful difference that prioritizes opportunity and growth over rationing and scarcity.And that will
106、change the way stakeholders think about investments.Clear policy and regulation.As governments and policymakers come to recognize the value that a whole systems approach can deliver,and more effort and investment is placed into building up a supportive ecosystem and driving transformation through in
107、frastructure,many will begin to realize the importance of renewing the social license through clear policy and regulation.Particularly over the next three to five years,we expect to see significant jockeying as governments use policy and regulation to attract sustainability-related talent,ideas and
108、investment to their markets.For the developing markets in particular,this will be key to unlocking inbound investment.5This is about taking a whole system approach to our activities,our organizations and our decision-making.Converging Trends 2033:The long view|14 2023 Copyright owned by one or more
109、of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.InnovationCitiesSustainable developmentWhat does this all mean for infrastructure players and providers?We believe that all participants in the infrastructure sector will need to start t
110、hinking very differently about the value and benefits that a whole systems approach can deliver to stakeholders and citizens.In particular:Governments and regulators will need to start using infrastructure as a way to drive outcomes and actions,regulation to encourage investment and stability,and po
111、licy to set clear objectives and targets that increasingly focuses on livability,equitable access and the environment.Developers and operators will need to understand how they fit into the system model and what levers they can pull to help deliver on their own goals and objectives,as well as those o
112、f the markets and communities they support.Investors will need to consider how they might adapt their investment criteria to reflect the sustainability factors aligned with the publics desired outcomes.Infrastructure planners and authorities will need to start thinking about how they tap into long-t
113、erm abundance rather than focus on preserving scarce resources and status quo models.Individuals every one of us must strive to combine greater access to information with increased confidence and innovative technologies to do our own part as individuals to contribute to the SDGs.Converging Trends 20
114、33:The long view|15 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.InnovationCitiesSustainable developmentInnovationSustainable developmentCitiesConverging Trends 2033:The long view|16 2023 Copyrig
115、ht owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.InnovationA look back at the past 10 years Technology and innovation have played a leading role in our Emerging Trends report in each of the past ten years.In 201
116、3,we forecasted that a growing number of infrastructure planners and owners would be starting to take a longer-term view of how technology could be integrated into their assets.In 2016,we suggested that technology would rapidly and fundamentally disrupt the way we plan,design,develop and operate our
117、 infrastructure.More recently,weve been predicting the rise of AI and automation in infrastructure delivery.Through the years,weve also noted a range of massive challenges.From the very start,our reports have raised concerns about technology obsolescence and the risk of sunken assets.In the early ye
118、ars 2016 and 2017 in particular the focus was on using big data to better understand consumer and technology trends.As maturity grew,we shifted focus to thinking about how to use sophisticated analytics to deliver operational efficiency,drive customer outcomes and enhance service levels.Data has als
119、o been a recurring theme.In 2013,our Emerging Trends report encouraged infrastructure authorities and operators to use their data to improve strategic decision-making.By the 2020s,we were extolling the value of data integration and digital service delivery.Later editions of our Emerging Trends repor
120、ts have been talking about the benefits and risks of data being used to drive automation,AI and IoT and the integration,visualization and ownership questions that come with that.The other emerging theme coming from the past decade is one of global technology competition.We have noted on many occasio
121、ns that the emerging markets could take a strong competitive lead in infrastructure innovation.And we have noted the growing protectionism around key technology sectors and components.If anything,the past few years have seen an unwelcome acceleration in that sphere.More recently,weve been predicting
122、 the rise of AI and automation in infrastructure delivery.Converging Trends 2033:The long view|17 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Sustainable developmentCitiesInnovationWhat does the
123、 next 10 years look like?The world in 2033 will likely not be the jetpack lifestyle that we may have anticipated in 2023.As is always the case with technology innovation,change may occur in incrementally innovative steps rather than through big bang inventions.In many ways,the world in 2033 looks a
124、lot like it does today.People still work,they still drive on roads and they still need electricity.What has changed is the focus.Whereas in the past,infrastructure innovation was often poorly funded,weakly adopted and scattered in its use cases,by 2033,innovation in the infrastructure sector is tigh
125、tly aligned to a small number of very important priorities.There are many to choose from climate adaptation,regeneration,equitable access,delivery of the SDG goals,affordability,operational efficiency,productivity and more.That has given focus to planners,investors and owners as they consider how to
126、 move forward.Sharper focus has also allowed decision-makers to explore different options and opportunities.When the focus shifts to outcomes instead of technologies or inputs,it allows new ideas to be explored and adopted.Much greater levels of optionality will be baked into infrastructure planning
127、 and development.For example,instead of adding more lanes to alleviate traffic(the traditional approach),planners are exploring a range of new technologies and models like demand planning to promote active travel,HOV lanes,smart motorways and automation technologies that enable greater utilization o
128、f existing assets.New technologies will also allow planners,designers,developers and operators to be more efficient and effective as they take on their citys infrastructure challenges.Generative AI will frequently be used to develop first draft designs based on data collected from similar infrastruc
129、ture around the world.New construction methods,skills and materials will help reduce waste and carbon emissions while adapting to climate change.Material science will have helped improve resilience and reduce the base requirements for asset development.Legions of new solutions will integrate to allo
130、w infrastructure owners and users to access and manage assets more effectively.Perhaps the most important change that may occur over the next decade is in governments ability to encourage and accelerate adoption out to the masses.The reality is that innovation releases the greatest value(financial o
131、r otherwise)when it gets to the point of mass adoption.Throughout the late 2020s,governments and investors will find ways to speed up the adoption of worthwhile technologies and ideas not just across lines of governments and within markets,but also between markets and across public and private secto
132、rs.Once again,we see different paths of evolution and different rates of progress around the world.In part,this has been influenced by cultural norms,expectations and preferences.Mobile-savvy markets in the developing world,for example,are already moving at a considerable pace towards mobile apps,pa
133、yments and services.Cities with older populations may move slower.Those with a strong history of technology adoption like Singapore will move faster.Clearly,a markets attachment to their existing infrastructure will also influence the pace and direction of change.Those with little existing infrastru
134、cture will be free to focus their attention on greenfield applications and ideas.Those with entrenched infrastructure will likely place more focus on innovations that enable retrofitting and use adaptation.We may not be flying around with jetpacks by 2033.But we may certainly be on track to achieve
135、continuous and incremental innovation in the way we design,deliver,operate and use infrastructure.Generative AI will frequently be used to develop first draft designs based on data collected from similar infrastructure around the world.Converging Trends 2033:The long view|18 2023 Copyright owned by
136、one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Sustainable developmentCitiesInnovationWho are the winners and losers?History suggests that technological innovation always creates winners and losers.The worry is that the d
137、rive towards infrastructure innovation will sharpen a digital divide that will fuel further inequality at a global,national and individual level.Those markets that innovate faster will likely be more productive,thereby attracting more investment and more innovation.Those that face challenges kicking
138、 off the flywheel of innovation will quickly find themselves further and further behind.On the other hand,innovation in infrastructure will also help many markets solve some of their greatest growth barriers and development problems.Virtual education,for instance,can help upskill the local populatio
139、n and bring greater diversity to the workforce.Better digital infrastructure can improve access to government services and enhance social stability.Improved connectivity can help citizens better anticipate,mitigate and respond to climate events.New water technologies can open up new opportunities fo
140、r safe and healthy development.There will likely be more winners than losers.Indeed,it will not always be easy to pick the winners and the losers.Some may make big bets on technologies that fail.Others may get the technology right but ignore the cultural nuances that drive adoption.And there will be
141、 many technologies and markets that will struggle at first,only to pull through in the long run.The challenge facing governments and infrastructure owners,therefore,is to be adaptable in the face of change.Those markets that innovate faster will be more productive,thereby attracting more investment
142、and more innovation.Converging Trends 2033:The long view|19 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Sustainable developmentCitiesInnovationHow can we get there?As we look ahead to 2033,we se
143、e five ways that governments and infrastructure authorities can help accelerate the value of infrastructure innovation.1 Focus on outcomes.Prioritize key use cases and outcomes that help renew the social license rather than focusing purely on the amount of concrete poured or the quantum of capital i
144、nvested.This gives direction to private market participants and encourages planners and decision-makers to keep an open mind to various solution sets and technologies.2 Drive adoption.Innovation isnt just about cutting-edge invention and commercialization.The real value comes from widespread adoptio
145、n and utilization.There are a wide range of levers that can be pulled to drive adoption.Understanding the needs and barriers facing customers and users will be key.3 Create a supportive environment.Driving and maintaining innovation requires a vibrant and robust ecosystem of people,capabilities and
146、capacity.Governments and policymakers can play an important role in helping shape the infrastructure technology environment through policy,regulation,investment and partnership.Prioritize adaptability.Leverage open data approaches and frameworks to help drive adoption and to encourage innovation.Thi
147、nk about ways that infrastructure can be designed and developed to allow for use adaptation as demand and technologies shift.Continuously assess whether your investments and activities are building a platform for future generations.Encourage integration.Exponential value comes from incremental integ
148、ration.Look for opportunities to encourage integration of technologies,data,processes,systems and outcomes to create greater value for citizens and greater alignment around goals and objectives.However,while integration is important,priority must be given to security and privacy.Prioritize key use c
149、ases and outcomes that help renew the social license rather than focusing purely on the amount of concrete poured or the quantum of capital invested.5What may this all mean for infrastructure players and providers?The development and adoption of infrastructure innovations will likely have a massive
150、impact on stakeholders across the infrastructure sector.For example:Developers and designers will need to think more broadly about how technology and innovation can help deliver on their chosen sustainable development priorities with flexible and adaptable designs and development.The winners will li
151、kely be those that find a route that shortens the development time for new technologies.Government and policymakers will need to focus on sustainable outcomes and creating a supportive environment that encourages an innovation ecosystem and talent pool to develop and thrive.Procurement approaches th
152、at reward innovation can play a catalyzing role.Investors will need to find ways to align the timelines of InfraTech with the long-term needs of society to create positive outcomes through innovation.Owners and operators will need to explore new and emerging technologies and innovations to assess th
153、eir value and applicability today and in the long term.4Converging Trends 2033:The long view|20 2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Sustainable developmentCitiesInnovationContactsThe inf
154、ormation contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity.Although we endeavor to provide accurate and timely information,there can be no guarantee that such information is accurate as of the date it is received or that i
155、t will continue to be accurate in the future.No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.2023 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services t
156、o clients.All rights reserved.KPMG refers to the global organization or to one or more of the member firms of KPMG International Limited(“KPMG International”),each of which is a separate legal entity.KPMG International Limited is a private English company limited by guarantee and does not provide se
157、rvices to clients.For more detail about our structure please visit KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization.Throughout this document,“we”,“KPMG”,“us”and“our”refers to the global organization or to one or more of the member f
158、irms of KPMG International Limited(“KPMG International”),each of which is a separate legal entity.Designed by Evalueserve.Publication name:Converging Trends 2033:The long viewPublication number:138966-GPublication date:September Stephen C.BeattyGlobal Head of Infrastructure and Head,Global Cities Ce
159、nter of Excellence,KPMG InternationalPartner,KPMG in CanadaE:sbeattykpmg.ca Sharad SomaniHead of Infrastructure,ASPAC region Head,Infrastructure Advisory,KPMG InternationalPartner,KPMG in SingaporeE:.sgMichele ConnollyGlobal Head Corporate Finance and Head of Infrastructure EMA region,KPMG InternationalPartner,KPMG in IrelandE:michele.connollykpmg.ie