InfrastructureWhy Does it Matter so Much?

What impact does a well-conceived infrastructure really have? Does it really transform local economies with speed and lasting success - and how vital is it that we think of infrastructure as extending to online connectivity, not just roads, hospitals and airports? Here, Maria Vagliasindi, Acting Chief Economist for Infrastructure, World Bank, comments on some of the enduring effects… s an overview statement, infrastructure affects growth through several supply and demand-side channels. Investments in energy, telecommunications, and transport networks directly impact growth, as all types of infrastructure represent an essential input in any production of goods and services. In addition, infrastructure can also reduce the cost of delivered goods, facilitate the physical mobility of people and products, remove productivity constraints, and increase competitiveness.

Emerging research showcased at the 2022 Infra4Dev Conference, quantifiedusing advanced econometric techniques - the impact of infrastructure on growth, both for basic access to infrastructure services as well as more sophisticated infrastructure.

First things first. Let’s consider the impact of creating online connectivity, not just the physical connectivity so often associated with the term ‘infrastructure’. Fixed-line internet availability, even at basic speeds, has a strong impact on the local economic growth of towns - and there’s no better example than in SubSaharan Africa. Connectivity led to about two percentage points higher economic growth of Sub-Saharan African towns in the years after connection, compared to similar but later-connected towns. (The results are derived from a difference-indifferences analysis, using night-time light satellite data in 10 Sub-Saharan African countries in the early 2000s, as a measure of evolving economic development).

Moreover, mobile internet, primarily through smart phones, can close information asymmetry gaps between buyers and sellers in countries such as Ethiopia, where fixed broadband communication is limited and there is little transport and other market infrastructure available. In particular, mobile internet enables faster mobile broadband connection, expansion of dataenabled phones, and increased flexibility and mobility.

Then, let’s take the example of something you might think very basic indeed: access to electricity. Access to electricity explains 21% of the structural transformation process in Brazil between 1970 to 2006. The channels through which this impact takes place are generation of higher returns on investment or decreasing entry costs in sectors with greater infrastructure intensity. Econometric analysis suggests that manufacturing is the sector that benefits the most on these dimensions, followed by services and agriculture.

The Physical Dimension

Expanded road networks lead to a one percentage point increase in the size of urbanised areas, albeit at the cost of increasing air pollution and deforestation. Urbanisation is measured through built-up areas, as detected through remote sensing data from high-resolution satellites using Artificial Intelligence. The results are confirmed using an innovative spatial panel derived using the Demographic and Health Survey (DHS) data.

The use of smart meters leads to substantial improvements in electricity service quality, as illustrated by the randomised installation of smart meters (which utilities can install to monitor service quality) in the Kyrgyz Republic, for example. Treated households made significantly more energy-efficiency investments, potentially mitigating their electricity consumption increases postintervention.

Definitions

While infrastructure can lead to beneficial economic outcomes, the hard-and-fast development impact of infrastructure depends significantly on how infrastructure investment strategies are defined and implemented. First, spatially coordinated development of different types of infrastructure can help to amplify returns. Second, infrastructure investment must be accompanied by policy reforms aimed at mitigating trade-off between social and environmental sustainability.

In the case of Ethiopia, while isolated road and electrification investments increased welfare by only 2% and 0.7% respectively, the welfare effect resulting from combined big push infrastructure investments is at least 11%. The results are derived with a spatial general equilibrium model, that highlights markedly different patterns of impact across different types of infrastructure. Whereas access to an all-weather road alone increases services employment, additionally electrified locations see large reversals in the manufacturing employment shares.

Not All News Is Good News

Of course, advancing the cause of infrastructure can have its challenges. Community-Driven Development programmes in the Philippines, for example, have been found to have adverse environmental impacts, notably deforestation. The largest effects arose from infrastructure subprojects, which include trails, bridges and roads areas which experienced 126% more deforestation per year relative to the control group.

Infrastructure is not without its issues - for example, several large dam projects have given rise to social conflict, banditry and disaffected communities.

The construction of large damswhich we might think of as an essential component of infrastructure masterycan give rise to social conflicts in affected communities, particularly if these are poorly designed and consultation with affected populations is not adequately pursued. A recent multi-country study found that in the immediate vicinity of newly-built dams, there was a significant increase in intrastate conflict. hen it comes to enforcing security in high-rise office buildings over 350m high, there are various pluses and minuses. On a positive note, it’s very much the case that thieves and break-in specialists are confined within the interior of the tower, and there is therefore a clear limit to how far they can actually roam around (compare this with the opportunities for disappearing into a low-rise community with a similar number of offices, but where there is huge opportunity to explore walkways, car parks, and so on). Similarly, it’s almost unheard-of for thieves to climb up or down the exterior of super-high structures - this may be the domain of Hollywood thrillers, but in 99% of cases, the reality is that however high the building, the ground floor represents a bottle neck through which all visitors (wanted or unwanted) have to pass. Clearly, that’s a great security plus.

Notwithstanding, infrastructure remains by some margin the most critical methodology for transitioning communities economically; and it also has powerfully beneficial human consequences, in terms of facilitating education, contact between social and familial groups, and is also a powerful catalyst in the development of wellness, the promotion of health policies - and ultimately, longevity.

Yet the reality is that it can take security 30 minutes to get from the bottom of a super-tall to the top - and only a handful of structures over 350m actually have strong security hubs positioned throughout the vertical height of the building. Rather, they tend to rely on one lower-level checkpoint and control centre, which remotely monitors the entire building. While there may well be enough cameras in place to do so, the fact remains that while it’s possible to watch a crime being committed when you are 100 floors away, it’s actually impossible to get here and stop it before the culprits have left.

The fact remains that security in highrise offices and commercial buildings is critical to all parties involved. Of course, Property Management wants to protect their facility from vandalism and provide a safe environment for their tenants, thereby maintaining a high level of building occupancy. Meanwhile, tenants, of course, want to know that their employees and leased space is safe and that the building provides a secure working environment.

A Structured And Modular Approach

There are actually five key areas to focus on to make for a safe environment in a supertall setting. These are:

• Modular control points every 15 floorsmeaning that not only is there strong video surveillance, but there is actual security footfall and the building is effectively ‘segmented’. This also means that it’s relatively easy for security to stop and apprehend intruders wherever they may be in the building. Note that the control points don’t have to be in a physical office space; they can be ‘pop-up’ kiosks fully equipped with all necessary equipment.

• All interior communal areas need to have extensive video surveillance. While it’s fairly obvious that this will need to be in front of elevators, turnstiles and all entry points, don’t forget to have cameras in all loading bays and delivery points and all goods-inwards areas, too. Similarly, all interior stairwells and staircases need to be fully monitored.

• All parking lots and outside docking areas must have video surveillance.

• Card-control and smart device access on all entry points, whether turnstiles, elevators or loading bay doors. Floor selection on elevators can only be made via card swipe.

• Security agreements as part of the tenancy contract. Tenants cannot be allowed to have an ‘ad hoc’ approach to security, thereby creating blind-spots within the building. There should be a minimum-agreed level of camera coverage within each tenant office, which must be accessible through the main CCTC system. It’s not enough for company CEOs and designated corporate officers to have remote access to footagebecause again, they may see it but cannot actively get there to stop it.