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Fixing the U.S. Infrastructure System Through Bottom-Up Innovation

By Dan Carol, Senior Advisor

May 24, 2016

Rarely do we hear “innovation” and “infrastructure” mentioned in the same sentence. However during Infrastructure Week at the Innovation Technology and Information Foundation, this was precisely the topic of conversation. Last week I had a chance to participate in the discussion, focused on accelerating bottom-up innovation at the local level.

So why is innovating our infrastructure system at the local level important? Because infrastructure is critical to growth.  So while we need Congress to get its act together to build more roads and water systems, the reality is that 75% of all infrastructure spending happens at the local level. And these local systems also need fixing.

Take the mess in Flint: An ounce of prevention could have thwarted the resulting public health disaster. Unfortunately, Flint is not a unique case.  Nationally, there is a $3 trillion backlog of deferred maintenance that federal funding alone can’t cover. This doesn’t include the costs of natural disasters, like Superstorm Sandy, which are increasing in frequency and force. This backlog also does not include the development of new essential infrastructure, like broadband, to keep U.S. cities competitive.

But the news is not all gloomy.  Performance or outcomes-based infrastructure is showing results. In our working paper, the Beeck Center at Georgetown highlights successful efforts, both local and international, to build the 21st century infrastructure system with bottom-up innovation.

“Performance-based infrastructure” encourages government leaders to consider the full life cycle of infrastructure performance rather than simply taking the low-cost capital bid. This means incorporating the cost of properly maintaining assets meant to last 30-50 years.

These policy shifts are being led by Canada and New Zealand, where agencies sponsoring infrastructure projects, such as prisons and roads, must first undertake an Infrastructure Project Assessment to see if there are more efficient ways to design, finance, procure, and maintain the asset. After that, public officials are then trained on how best to manage important project risks, such as climate risk. Ministries of Finance are leading the way, as stewards for the public and impartial “owner-advisors” to public agencies – not project proponents.

Watching Canada’s $100 billion project explosion over the last decade – and the resulting incredible rates of better on-time and on-budget performance – early adopters in the U.S., like the West Coast Infrastructure Exchange, are starting to follow suit.

Our policy analysis, Performance-Based Infrastructure, provides a playbook for bottom-up innovation. A few high-level recommendations include:

  • Develop a national network of local, state and regional centers of expertise to help local infrastructure agencies accelerate best practices;
  • Reform procurement and permitting systems to measure and reward life-cycle infrastructure performance; and
  • Promote data integration and innovation across infrastructure modes with a new era of distributed energy and water systems.

The bottom line: we can do more with less as we digitize infrastructure, but to truly anchor this trillion dollar shift, requires supporting local public sector innovation.

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