Importance of InfraTech (infrastructure technology)
InfraTech is essential to infrastructure achieving net zero and the UN Sustainable Development Goals. It provides the breakthrough solutions needed to maximise investments in infrastructure and enable us to do more with less, thereby contributing to these important, global impacts:
The GI Hub is working on resources and programs that give governments, investors, and technology companies the ability to scale up the adoption of InfraTech and achieve the above impacts.
What is InfraTech? Expand for more
Currently, there is no common definition for InfraTech. Many people think of InfraTech as ‘widgets’ that are retrofitted onto existing infrastructure. This is true, but is only one aspect of InfraTech. To increase adoption of InfraTech and realise its many potential benefits, the perception of InfraTech needs to shift from funding projects on an as-needed basis to making strategic investments in technology scale to enable the infrastructure of the future.
Defining InfraTech can support this shift. The GI Hub defines InfraTech as any emerging technology (material, machine, or digital technology) applied at any point in the infrastructure lifecycle with the view to achieve one or more of the impacts listed above.
Other terms that may be used to describe InfraTech include ‘smart infrastructure’, ‘digitalisation’, ‘digital engineering’, ‘modern methods of construction’, and ‘cyber physical systems’. Sometimes, InfraTech is recognised by the names of specific InfraTech solutions like IoT (internet of things), digital twins, AI (artificial intelligence), and BIM (building information modelling). The solutions enabled by InfraTech are often part of ‘smart cities’ or ‘cyber-physical systems’. In the realm of infrastructure financing, some use the term ‘Infrafintech’. All these terms are related to each other and connected to InfraTech as an umbrella term.
InfraTech is the term adopted by the G20 in its Riyadh InfraTech Agenda and is increasingly used by the public and private sectors to describe the wide array of technologies available for application to all stages of the infrastructure lifecycle.
Latest insights and resources
Benefits of Infratech
InfraTech can improve the efficiency of infrastructure investment and reduce cost overruns
The financial benefits of technologies that bring enhanced analytical functionality, data management, communication, and automation to the construction and operation of infrastructure are significant. Some studies estimate that 0.65% GDP (around 22% of the total investment in infrastructure) could be saved by minimising cost overruns from infrastructure. Also, new analytical capabilities in portfolio planning could deliver 10–20% in savings on capital expenditure.
InfraTech can enable infrastructure to decarbonise and transition to net zero
Infrastructure is responsible for more than 79% of global greenhouse gases, and it is now evident that InfraTech underpins infrastructure’s potential to meet net zero. Existing solutions to decarbonisation – such as renewables, electric vehicles (EVs), electrification solutions, and even digital technology – are all founded on technological innovation. And 40% of the new technologies required to achieve greenhouse gas emission reduction targets by 2050 are still under development. So it is important to accelerate newer solutions like hydrogen; carbon capture, utilisation, and storage (CCUS) technologies; and industrial process technologies (e.g. technologies that can make manufacturing ‘greener’) to enable the infrastructure of the future.
InfraTech can bridge the infrastructure investment gap
InfraTech plays an important role in mobilising more private capital and de-risking investments, by providing data and analytics that enable investors to better quantify and assess risks and costs. The GI Hub has quantified the infrastructure investment gap and is tracking trends in private investment in infrastructure to help the industry mobilise more private capital. A simple example shows how impactful the contribution of InfraTech could be: currently, USD3.3 trillion per year of infrastructure investment is expected globally to support growth, and 60% of this investment is needed in emerging economies. If we assume even a modest 10% savings on this investment need, the application of InfraTech at scale can have a big impact on the ability to finance future infrastructure globally.
InfraTech can create social value through infrastructure
InfraTech can enhance the social inclusion of infrastructure services and create new jobs and economic opportunities by connecting people with jobs and creating new, technology-driven industries and markets. It can broaden access to essential social services and make accessing these services more reliable, thereby improving the inclusivity of infrastructure. Studies show that investments with a larger R&D component deliver higher employment effects than conventional investments. This means that adoption of InfraTech would be likely to further boost infrastructure job multipliers, which are already strong. For every $1m spent, 3–7 jobs are created in advanced economies and 10–17 jobs in emerging economies. This would be expected to grow with the scaling up of InfraTech.
Call to action: InfraTech for all
InfraTech is relevant for advanced economies and emerging and developing markets (EMDEs). Although some of the most well known solutions may appear at first to be most applicable to advanced economies, the wider aims, approaches, and mindset of InfraTech are badly needed to close the divide between advanced economies and EMDEs and achieve net zero and the SDGs.
The GI Hub has been working with the G20 on InfraTech since 2020 and is helping the G20 take a leading role in scaling up InfraTech investment across four pillars: policy, commercial, technology, and finance. The G20 Blueprint on Scaling Up InfraTech Financing and Development, created by the GI Hub and Asian Infrastructure Investment Bank, highlights opportunity areas across these four pillars. Learn more approaches to scaling up InfraTech.