Blog |March 12, 2018

Conversations on connectivity, part 2: The future of infrastructure connectivity

trade connectivity / Photo: © sittinan - stock.adobe.com

 

In between the plenary panels and roundtable discussions at the first GICA annual meeting held in Paris this past January, we sat down with session panelists and GICA members for an informal Q&A about what lies ahead for infrastructure connectivity—how technology and innovation shape it, and where it will take us.

Thank you to Morag Baird, Senior Manager, Global Infrastructure Hub; Jan Hoffmann, Chief, Trade Logistics Branch, UNCTAD; Iza Lejárraga, Head of Unit, Investment Division, Directorate for Financial and Enterprise Affairs, OECD; and Naoyuki Yoshino, Dean, Asian Development Bank Institute, for sharing their insights and perspectives on the future of infrastructure connectivity.


Question: How will technology and innovation shape connectivity?

Baird: The influence of technology and innovation has been really obvious in the ICT sector. On a day-to-day basis, a lot of people are unaware of the backbone infrastructure that’s enabling them—the Wi-Fi in our homes, the thousands of miles of submarine cable around the world, and the like. The same is true for energy, where technological changes will shape the models of managing distribution. The transport sector is interesting too, since technology is starting to change business models. Roads are not going to suddenly become irrelevant, but should adapt to new planning needs though change will be slower.

Hoffmann: The new technology is science fiction to some extent, but it’s here already. UNCTAD is looking increasingly at Artificial Intelligence, blockchain, the Internet of Things, and more. One thought: Global regulations should not be prescriptive for specific technologies, because we don’t know what technologies we will need in 10 or 20 years. For example, the 2017 Trade Facilitation Agreement of the World Trade Organization includes references to the Internet or specific solutions, but Article 10 includes simple recommendations on the need to continuously measure, monitor, improve, reduce—and not insist on processes when we no longer need them. In the longer term, I believe Article 10 will be more important than the specific, more prescriptive articles.

Lejárraga: Technology can be transformative, but it needs to be proportional to a country’s technological and skills development. Technology-intensive transport requires development of skills needed to maintain and repair the systems, which may not always be available in a developing country context. It can also be more costly, at least in the short term, and require more sophisticated regulatory regimes. For this reason, there can be a tradeoff in terms of the technological sophistication and the coverage of the connectivity network.

Yoshino: Ten or 20 years ago, we required a huge amount of physical connectivity, because almost everybody worked at an office. Now, many people work at home, making hard infrastructure connectivity less important than soft connectivity. Big hydro dams can be substituted with community solar power and wind power.


Question: Predictions for the future of infrastructure connectivity?

Baird: Big changes in ICT will drive efficiencies in all sectors, with distinct patterns of development. Some advanced cities will go toward driverless cars, with less personal ownership of cars within the city boundaries. Outside of cities I don’t see as dramatic changes happening in the ways we travel. The family car will remain the family car—people like that experience. Trade and development in physical shipments will be interesting because of the current unknowns. 3D printing will be an aspect, but not an overwhelming one. By the time my kids get to be my age, IT will be completely different and will be completely integrated with how they live. Tensions in cross-border water connectivity will increase.

Hoffmann: The combination of AI and IoT linking things together. Once we move things to remote control, the IoT sounds like Sci-Fi—but it will come. Maybe not in our lifetime, but we’ll have systems that know better. A book that impressed me is Life 3.0 about the future of life with Artificial Intelligence.

Lejárraga: I hope that the future of connectivity will bring an integrated agenda, in which transport or ICT strategies are not devised in "silos," but are far more closely coordinated with the industrialization, trade, development strategies of the country. Connectivity is the backbone of the economy, and as such, it needs to be aligned with broader economic policies.

Yoshino: I hope that much more private sector financing can be added to government financing, which will improve the quality of infrastructure and the economic impact, since the private sector emphasizes higher ROI and productivity. Because government sectors are often only interested in constructing without considering transparency and efficiency, the private sector will help improve efficiencies and cost-effectiveness of infrastructure. Good Infrastructure will induce private economic activities and employment in the region. Property tax revenues, corporate tax revenues and income tax revenues will rise. If part of these incremental tax revenues were returned to private investors into infrastructure, ROI will rise and will attract much more private finance into infrastructure investment.


MEET THE RESPONDENTS

Morag Baird joined the Global Infrastructure Hub (GI Hub) in 2016 on secondment from the UK Department of International Development (DFID) and leads the GI Hub “leading practices” mandate. This area of the GI Hub’s mandate facilitates knowledge sharing by analysing leading practices from around the world to develop tools and practical guidance that will enable governments to take quality infrastructure projects to market.

Morag is a senior infrastructure adviser with over 25 years of experience working on infrastructure issues particularly in developing countries. She brings extensive international experience at both policy and project level including worked based in DFID Ethiopia, Sierra Leone, Bangladesh and Central Asia. During her international postings she has led ondevelopment of infrastructure programmes and the relationship with partner government Ministries, private sector and NGOs. Prior to joining the GI Hub she worked at the European Investment Bank (EIB) focusing on Africa strategy, blended finance and infrastructure project preparation facilities, impact finance and results measurement.

Before joining DFID in 2000, Morag worked with a UK engineering consultancy and her expertise as a chartered civil engineer spans all main infrastructure sectors especially energy, water and transport. She holds a Master’s degree in Engineering from Cambridge University.

Jan Hoffmann joined UNCTAD in 2003 and is currently Chief of the organization’s Trade Logistics Branch, responsible for research and technical assistance programmes in international transport and trade facilitation. Jan is co-author and coordinator of the “Review of Maritime Transport,” initiated the UNCTAD “Maritime Country Profiles,” and created the annual “Liner Shipping Connectivity Index.” Previously, he spent six years with the UN Economic Commission for Latin America and the Caribbean in Santiago de Chile, and two years with the IMO in London and Santiago. Prior to this, he held part time positions as assistant professor, import-export agent, consultant, and seafarer on an Antigua and Barbuda flagged tweendecker. Jan has studied in Germany, UK and Spain, and holds a PhD in Economics from the University of Hamburg. He is member of the boards of various journals and associations and president of the International Association of Maritime Economists (IAME).

Iza Lejárraga is Head of Unit, Investment Division, Directorate for Financial and Enterprise Affairs, at the OECD. Before joining the OECD, she was a Research Economist with the Regional Integration and Trade Department as well as the Development Research Department of the African Development Bank. Previously, she worked at the International Trade Department of the World Bank, and prior to that she was at the Trade Unit of the Organization of the American States. She has provided analytical and technical support to a wide array of regional trade negotiations with Latin American and African countries, from Economic Partnership Agreements (EPAs) to the Free Trade Area of the Americas (FTAA) process. She did her graduate studies in international economics and development at Harvard University, where she has been a post-graduate Research and Teaching Fellow and Visiting Scholar at the Center for International Development.

Naoyuki Yoshino is Dean of the Asian Development Bank Institute (ADBI) and Professor Emeritus at Keio University, Tokyo, Japan. He obtained his PhD from Johns Hopkins University (United States) in 1979 where his thesis supervisor was Sir Alan Walters, economic adviser to former British Prime Minister Margaret Thatcher. Naoyuki has been a visiting scholar at the Massachusetts Institute of Technology (United States) and a visiting professor at various universities including the University of New South Wales (Australia), Fondation Nationale des Sciences Politiques (France), and University of Gothenburg (Sweden). He has also been an assistant professor at the State University of New York at Buffalo and an economics professor at Keio University.

Naoyuki's professional career includes membership in numerous government committees. He was named Director of the Japan Financial Services Agency's (FSA) Financial Research Center (FSA Institute) in 2004 and is now Chief Advisor. He was appointed as Chair of the Financial Planning Standards Board in 2007. He has served as Chairperson of the Japanese Ministry of Finance's Council on Foreign Exchange as well as its Fiscal System Council (Fiscal Investment and Loan Program Section). Additionally, he has been a Board Member of the Deposit Insurance Corporation of Japan and President of the Financial System Council of the Government of Japan.

He was nominated for inclusion in Who's Who in the World for 2009 and 2013, and was named one of the Top 100 Educators in 2009. He obtained honorary doctorates from the University of Gothenburg (Sweden) in 2004 and Martin Luther University of Halle-Wittenberg (Germany) in 2013. He also received the Fukuzawa Award in 2013 for his contribution to research on economic policy.


 

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