affiliation not provided to SSRN
Journal of Applied Corporate Finance, Vol. 23, Issue 3, pp. 18-29, 2011
A senior executive of Booz Allen Hamilton and co‐author of a business bestseller called Megacommunities argues that the United States is locked into an obsolete pattern of dealing with infrastructure investment, even as the country's population growth and technology have raced ahead. Three of America's basic “lifeline” infrastructures - energy, transportation, and water - are nearing the end of their useful operating lives and in desperate need of modernization. U.S. capital spending on infrastructure has been inadequate, amounting to less than 2% of GDP, as compared to 9% in China and 5% in India. But if infrastructure renewal will be costly, money is not the biggest obstacle. History shows that modernizing existing infrastructures tends to be even more challenging than creating new ones because of the drag caused by legacy hardware and the associated human “software.” And so the real problems are conceptual, institutional, and political - problems whose solutions demand transformational vision and leadership that will encourage collaborative participation by both the public and private sectors. What is lacking, then, is an oversight and coordination mechanism that restores government's traditional integrating role without creating either new monopolies or a larger, more centralized government. To that end the author issues four imperatives:. First is the need to rethink the form and function of our old infrastructures. Second is the need for design principles that make future infrastructures robust and adaptable as technology advances, funding changes, and the needs of our citizens evolve. Third is the need for leadership that succeeds by convening, integrating, and aligning the interests and actions of all important stakeholders. Fourth and last is the need for a national vision for America's infra‐structure that defines the function and performance of the entire system over its total lifecycle. A new kind of collaboration by different constituencies, which the author refers to as the creation of “megacommunities,” is held up as a way for stakeholders with conflicting interests to cooperate on compelling issues of national importance with a shared set of practices and protocols.
Number of Pages in PDF File: 14Accepted Paper Series
Date posted: September 29, 2011
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