A Big Shift In How We Define Infrastructure
As society evolves, the interpretation and understanding of key concepts that shape societal discourse also change. This evolution is driven by the shift in moral values, ethical frameworks, technological advancements, and the emergence of new branches of knowledge, which can significantly alter the meanings of previously established ideas.
For example, Thomas More’s “Utopia”, published in 1516, presents an idealised vision of a society where shared resources and communal living are the foundation of social harmony. This groundbreaking work was designed as a critique of the European socio-political structures of the time. Yet, as we traverse the temporal gradient, our perception of “Utopia” has experienced a profound metamorphosis. In the context of today’s society, More’s “Utopia” transcends its original intent, evolving into a symbol of our mutating societal values and ethics. This transformation demonstrates how our understanding of pivotal concepts evolves over time, showing that societal understanding can adapt to relentless change.
The evolution of the definition of infrastructure is no exception.
The way the world defines infrastructure has also gone through a sea change, which stands as a powerful testament to this phenomenon. The global understanding of what constitutes infrastructure has indeed undergone a seismic shift.
Infrastructure is traditionally conceptualised as the basic physical and institutional structures, amenities, and networks required for the functioning of a community or commercial entity. This includes vital, extensive, and capital-heavy tangible assets like highways, bridges, tunnels, rail systems, airports, seaports, electricity generation and transmission infrastructures, water supply and waste management systems, and telecommunication networks. Because of their significant impact on economic activities and the facilitation of societal linkages, these assets are frequently considered public goods and are commonly provided by government entities.
This conventional definition predominantly concentrates on the quantifiable, ‘hard’ assets indispensable for socio-economic operations, often neglecting the ‘soft’ facets such as social services, digital integration, or aspects related to environmental sustainability.
This perspective is also corroborated by the type of data historically collected and maintained by institutions like the World Bank. Specifically, the World Bank’s “World Stocks Infrastructure (1950-95)” database, prepared by David Canning, offers a telling example. This database catalogued only six measures of infrastructure stocks across 152 countries: (1) number of telephones, (2) number of telephone lines, (3) kilowatts of electricity-generation capacity, (4) kilometres of roads, (5) kilometres of paved roads, and (6) kilometres of railway lines. Evidently, the overarching definition of infrastructure during this period primarily concentrated on physical infrastructure, substantiating the traditional viewpoint.
Similarly, the World Development Report (1994), Infrastructure for Development, defined economic infrastructure as public utilities (power, telecommunications, piped water supply, etc.), public works (roads, dams, canals), and other transport sectors.
The limited scope of the term “infrastructure” persisted even into the early 2000s, where it remained largely synonymous with physical entities such as roads, railroads, telecommunications, electricity, water and sanitation systems, ports, airports, and canals. This restricted understanding is clear in a 2003 World Bank policy working paper titled ‘Investing in Infrastructure: What is needed from 2000 to 2010.’ Even this document, tasked with outlining the upcoming decade’s infrastructure needs, was primarily focused on these traditional types of infrastructure, reinforcing the prevailing mindset of the era.
On a side note, the government’s role in providing traditional infrastructure has been and continues to be both significant and broadly acknowledged. The extent of government involvement fluctuates according to the specific circumstances, community dynamics, and the nature of the infrastructure resource at hand. This pivotal role in shaping and maintaining the infrastructural backbone of our societies is a testament to the public sector’s crucial role. Previously, the onus of infrastructure development fell squarely on the government’s shoulders. However, the private sector is now emerging as a pivotal contributor to the infrastructure sector.
Infrastructure development, despite being integral to a nation’s socioeconomic progression, is not always viewed as the exclusive obligation of the government. There are several compelling reasons.
First, the scale of infrastructure required to meet the growing demands of population growth, urbanisation, and economic expansion frequently exceeds the financial abilities of numerous administrations. In this situation, it is often necessary for the private sector to be involved, and this is achieved through public-private partnerships.
Additionally, the concept of developmental investing, which involves private investors participating in infrastructure development for both profits and societal benefits, is on the rise. Last, historical data suggests that a hands-off governmental approach, which allocates infrastructure decisions entirely to the private sector, does not spur sustained economic growth. This highlights the need for a harmonious equilibrium between public and private investments.
We must turn our attention once again to the changing definition of infrastructure through the years. This evolution, over time, has been both substantial and profound, diversifying its scope and refining its nuances. As our society progresses, the concept of infrastructure has broadened to include a greater variety of elements. In recent times, there has been a shift from providing a specific asset to addressing broader societal needs. Infrastructure today encompasses a network of collaborative and flexible partnerships amongst investors, operators, and owners, departing from the traditional centralized approach.
In the investment landscape, sector-specific funds have emerged over the past few years, concentrating on areas such as water, digital technologies, mid-market ventures, core-plus, and value-added services. This development has led to a more precise delineation of what investing in infrastructure entails, thereby fostering increased specialization in the field.
Additionally, the interpretation of infrastructure has displayed a capacity to adapt to changing economic contexts. During periods of inflation, escalating interest rates, and geopolitical turmoil, investors are compelled to reassess their traditional approaches and definitions of infrastructure within their investment portfolios. The evolution of infrastructure mirrors the complex and dynamic nature of the societal, economic, and political contexts in which it is integrated.
The definition of infrastructure now also includes social infrastructure: Social infrastructure is a growing field of study within urban geography and urban studies, offering a wide range of public and community services and institutions that promote societal interactions and contribute to the functioning of society.
This change in the understanding of infrastructure has been precipitated by an increased appreciation for the role of social institutions and services in fostering a thriving and robust society. These elements, while operating outside the traditional production and distribution systems, significantly influence societal quality of life. Examples include hospitals, schools, parks, and community organizations, all of which form integral components of social infrastructure.
The significance of social infrastructure transcends mere economics. It’s pivotal in nurturing civic life, fostering community participation, and fortifying social unity. In addition, the escalating need for improved social infrastructure investment stems from the vast population lacking basic amenities like sanitation, potable water, and electricity.
Moreover, the heightened attention given to social equity, environmental justice, and universal service accessibility has underscored the role of social infrastructure in determining societal outcomes. This evolution in understanding and defining infrastructure demonstrates a more holistic view, acknowledging the capacity of physical and social structures to support and sustain communities.
In the contemporary context, elements such as Digital Public Goods (DPGs) are emerging as essential components of digital public infrastructure. They offer open-source tools and resources that are instrumental in implementing diverse systems and services within nations. This growing prominence of DPGs as a vital part of public infrastructure is a development that was scarcely conceivable even a couple of years ago, thereby illustrating the dynamic evolution of infrastructure in the digital age.
In conclusion, the definition of infrastructure has evolved significantly, reflecting the changing socioeconomic, environmental, and technological landscape. The traditional conceptualization of infrastructure as tangible, physical assets has gradually expanded to include intangible aspects like social services, digital integration, and environmental sustainability. This shift signifies a broader and more nuanced understanding of infrastructure, acknowledging its comprehensive role in fostering economic development, societal cohesion, and digital advancement. As our world continues to innovate and evolve, it is imperative that our definition of infrastructure remains fluid, adaptable and responsive to the multifaceted needs of our increasingly interconnected societies.
Bibek Debroy is the Chairman, Economic Advisory Council to the Prime Minister (EAC-PM) & Aditya Sinha is Additional Private Secretary (Policy & Research), EAC-PM.
Disclaimer: These are the personal opinions of the author.