Disruptions as a result of Covid-19 have heightened the awareness and desire to increase adoption of technology on many fronts including infrastructure. We explore five ways that technology can revolutionise the infrastructure landscape for emerging economies.
In Global Infrastructure Hub’s 2020 Infrastructure Futures Report, emerging market respondents highlighted urbanization, population growth, new technology and financing trends as infrastructure megatrends that would have the highest impact. The relatively greenfield nature of emerging markets results in an emphasis on new technologies and financing, as compared to mature markets with extensive, albeit ageing, infrastructure who are more focused on green issues and how to recycle, retrofit and make existing infrastructure more resilient.
However, are emerging markets in a position for greater adoption?
The good news is sweeping technology revolution is already transforming infrastructure at every stage of its life cycle. Data analytics, digital twinning, drones, automation and prefabrication technologies are reshaping the way we plan, develop and operate infrastructure assets. By selecting the right and good-fitting technology, Asian economies can leverage infrastructure to fuel growth.
Technology for Infrastructure
This article will explore five ways that technology can revolutionize the infrastructure landscape for emerging economies:
1. Leveraging data to optimize asset performance
“Data” has become a buzzword today, and for good reason.
In the infrastructure world, the ability to transform data into valuable insights is creating new opportunities for infrastructure owners and operators to improve operational efficiency, prevent asset failure and meet consumer demand. In other words, data helps to boost infrastructure productivity and exploit the full capacity of existing infrastructure, thereby potentially reducing the need for new, costly investments.
Government and the private sector must adapt to the increased role of data in the infrastructure sectors. The use of large volumes of data to make informed decisions will become a critical source of advantage in the future. The future of asset management, commercial revenue strategies, demand forecasting, public procurement and network planning will be reshaped through the use of data.
Smart sensors and drones, for example, can gather information on asset conditions in real-time, which can be used to predict and prevent asset malfunctions. Operating and maintenance costs are also reduced as regular, manual system checks are no longer needed.
In Singapore, the Land Transport Authority (LTA) is developing the Rail Enterprise Asset Management System (REAMS). This system will integrate asset information and maintenance records across the entire rail network, to enable staff to monitor the health of the various operating assets holistically over their respective lifecycles. It will also be equipped with data analytics capabilities to monitor asset performance and identify potential faults before they occur so that assets can be repaired or renewed pre-emptively. REAMS will be implemented in phases, from mid-2020 1.
Going forward, LTA is looking to adopt drones for future rail maintenance. This will enable the inspection of mass rapid transit tunnels to be carried out more quickly and safely while giving engineers more time to focus on data analysis and problem-solving.
LTA is testing the use of drones for future rail infrastructure inspections. (Source: LTA)
Beyond maintenance, data can help infrastructure owners visualize consumption patterns to better operate assets and manage demand. By creating stronger alignment between supply and demand, we can ensure that existing resources are utilized prudently and efficiently.
The Public Utilities Board (PUB), Singapore’s National Water Agency, is planning to roll out the first phase of its Smart Water Meter Programme. This will see the installation of 300,000 automated water meters in new and existing residential, commercial and industrial premises by 2023. This will benefit consumers, who can track their daily water usage through a mobile application and become more water-efficient. Through these meters, PUB will also be able to detect leakages early and reduce wastage of precious water2.
Data is – and has always been – all around us. But with the advent of new data-collection techniques and data analytics software, we can uncover new streams of efficiencies and cost-savings in the infrastructure world.
2. Integrating advanced manufacturing techniques into the construction industry
For many years, the construction industry has been operating on thin margins and low productivity. The wave of advancements in manufacturing technology (dubbed “Industry 4.0”), however, can change that. These include the use of off-site construction techniques as well as robotics and automation, all of which can significantly improve productivity and profitability in building infrastructure. Progress in this area may be key to supporting infrastructure growth in emerging economies, where affordability is often a deciding factor for new infrastructure projects.
In order to meet the rapidly rising demand for housing, the Singapore Housing Development Board (HDB) is adopting prefabrication techniques to boost construction productivity3. The bulk of manufacturing is shifted to a factory-controlled environment, with the finished components delivered to and assembled at the construction site. This expedites the construction process while also ensuring the quality of public housing, which is home to approximately 80% of Singapore’s population. Today, precast components constitute about 70% by volume of the entire structural concrete used during the construction stage4.
These construction techniques can be easily replicated in other projects, such as for schools and hospitals. As an added benefit, the more is built, the more the unit cost of construction falls. This would be especially relevant to emerging markets in Asia as they undertake a new wave of infrastructure building.
3. Shifting towards resource-efficient infrastructure planning
The innovation of large-scale, detailed and accurate modelling and virtual reality technology is changing our approach to infrastructure planning. Digital twinning systems are being used by developers to simulate design implementation and detect clashes early for rectification. This translates into massive cost and time efficiencies when the actual construction is underway.
For example, HDB has mandated the use of Building Information Modelling (BIM) in the design of its new development projects since 20125. BIM creates 3D models of building projects, which allow experts from various disciplines to concurrently examine and optimise the construction blueprint.
The ability to harness and analyse large quantities of data via geospatial visualisation tools is also enabling city planners to make informed choices, such as the types of infrastructure that will generate maximum benefits for the community. While data-capturing technologies can enhance individual infrastructure assets, we can also consolidate and integrate data collected from different sources to grow planning and coordination capabilities. One application in which Singapore has used this is transport and urban planning.
Transport Planning: One of the biggest challenges in transport infrastructure is the disconnect between the different modes of transport, which makes it difficult for the entire transport system to respond to changes in demand. To address this, LTA has developed a data warehouse – Planning for Land Transport Network (PLANET). PLANET mines large volumes and varieties of land transport data from various transport touchpoints (such as commuter fare cards), and allows planners to carry out advanced data analytics on travel patterns by bus, car and train. This enables more accurate prediction of commuter travel patterns, hence equipping transport planners to develop better transport policies6.
Urban Planning: The Urban Redevelopment Authority (URA) uses geospatial software such as Geospatial Information System (GIS)-Enabled Mapping Modelling and Analysis (GEMMA) for land-use scenario planning. GEMMA equips planners with a rich set of map-based data, ranging from population demographics to traffic patterns to land capacity information. This enables them to jointly assess different plots of land and identify suitable developments and/or amenities that will deliver the best outcomes for residents and businesses situated in these areas7.
Interface of GEMMA: available sites to locate facilities and amenities. (Source: URA)
To date, technology has predominantly been used to enhance infrastructure at the project delivery and operations phase. But it is slowly expanding its influence to upstream planning stages, helping infrastructure planners answer key questions of what, how, and where to build. This data-driven prioritisation of investments will facilitate decision-making processes and maximise allocative efficiency for the economy.
4. Enabling the rise of green and sustainable infrastructure
From GlH’s Futures Report, the megatrend of the rise of green energy sources ranks the third highest in terms of impact to the infrastructure industry. Green energy, viewed as an intersection of sustainability and technology trends, is among the biggest influences on the future of the infrastructure industry. Technological developments are creating more green solutions, which is important in an increasingly environmentally conscious world.
For instance, high levels of investments in energy storage solutions have been instrumental in decreasing the cost of batteries: In 2010, the price of a 1kWh battery was US$1,000. Today, the same battery costs $200, and its price is expected to fall further. Batteries are vital to overcoming the intermittency of renewable energy sources, and are also an integral component in electric vehicles (EVs). In fact, the price of batteries is plummeting so quickly that the cost of owning an EV is expected to be on par with that of combustion vehicles in the near future! 8
The first wave of EV conversion is likely to be implemented in public vehicles, which run on fixed schedules and therefore can be regularly charged at depots or terminals. Most recently, the city of Shenzhen has replaced all its diesel buses with 16,000 purely electric buses, the world’s first and largest electric bus fleet9.
Electric buses at a charging depot in Shenzhen. (Source: Matthew Keegan/The Guardian)
An inflection point may soon occur, where green technology becomes cheaper than its conventional counterparts and economics will drive the market towards adopting cleaner, more sustainable solutions.
5. Leapfrogging of emerging economies
The onset of technological disruptions offers a window for emerging economies to leapfrog to more advanced stages of infrastructure development. With no legacy assets, outdated regulations and ingrained mindsets to weigh them down, emerging economies have the opportunity to adopt the latest solutions, in the most expeditious and cost-efficient manner. This, coupled with the increasing interest of development finance institutions and private investors to fund infrastructure projects in emerging economies, will result in an unprecedented slew of infrastructure growth opportunities in the developing world.
The most well-known example is the rise of the mobile phone industry in Africa. In many parts of the African continent, there are no landlines for telecommunications. As laying land cables is a massively expensive exercise, many African countries have chosen to skip landline developments and have instead catapulted straight to mobile phones, causing mobile phone ownership in the region to increase exponentially within a few years.
Another good example is in Fuji, where KPMG (supporting ADB) assisted Suava, Fiji’s capital and largest metropolitan city, to develop and implement a digital land registry10. Land records, as in most urban governments, is paper-based and has multiple intermediaries in the land purchase and sale process. In Fiji land is a very valuable resource and 92% of land is ancestral domain. This necessitated an efficient, transparent information system to update and monitor land records, and create new ones. The initiative digitised the entire land records for the Fijian government, constructed the land price index and incorporated distributed ledger approach (blockchain technology) to reduced processing time and minimise intermediaries. This example shows that technology is a great equalizer and enabler for further infrastructure and even emerging markets are well suited in the current environment to leapfrog. With successful implementation in record time, this is a model that can be easily be replicated with other urban bodies for land and other urban infrastructure services.
Technology, therefore, offers developing countries a springboard to economic progress. In today’s dynamic environment, we may soon witness a wave of technological breakthroughs coming not just from incumbent leaders, but from emerging economies as well.
How should governments respond?
With a financing gap of over US$880 billion a year11, Asia’s infrastructure industry is in need of the growth and opportunities that technology could bring. Governments in the region are well-positioned to catalyse the technological transformation process and should act swiftly but cautiously to reap the full economic and social benefits.
Balancing innovative freedom and regulation
Governments remain nervous about their next steps, and understandably so – technology can cause disruption. Governments will need to consider how to design flexibility into regulations and contractual models, emphasising outcomes, not just inputs, in the infrastructure sector.
Without proper regulations in place, it could affect current infrastructure, jobs, security, safety, and other aspects of public well-being. Conversely, having overly strict laws will stifle the innovation process. Therefore, governments are now grappling with a conundrum: what is the right balance to strike between innovation and regulation?
We cannot afford to adopt a “wait-and-see” approach; failure to adapt to technological change may result in falling behind. Besides, what has worked in one country or industry may not always be successfully replicated in another. In the face of these issues, we need a nimble and forward-looking regulatory approach that can encourage innovations, while safeguarding public interest.
One way this can be achieved is through the use of regulatory sandboxes. A sandbox is a controlled environment with relaxed regulatory conditions, providing a space for promising innovations to be tested while protecting the public from any consequences of failure. It also allows governments to anticipate the problems that come with disruptive activity, and therefore craft policies to mitigate the risks.
In Singapore, agencies like the National Environment Agency (NEA) and Energy Market Authority (EMA) are creating their own testbeds to promote research and development (R&D) in their relevant sectors. One example is the region's first hybrid micro-grid system on Semakau Landfill, which is experimenting with the integration of solar, wind, tidal, diesel, and power-to-gas technologies, to study how effectively these energy sources work together. The microgrid is also integrating the use of battery storage solutions12.
The microgrid on Semakau Island combines solar, wind and tidal energy, and is the largest system of interconnected micro-grids in South-east Asia. (Source: NTU)
Governments could also consider implementing outcome-focused policies or standards that strive to achieve key goals, without limiting the technologies being employed. For instance, NEA is studying how it can turn incineration ash from Waste-to-Energy plants into construction material13.
Moving forward, policymakers also need to bear in mind that technological innovation is outpacing regulatory change. Hence, the need to be receptive and responsive to possible disruptions in the market is more crucial now than ever before.
In so many ways, technology acts as a great driving force for infrastructure, bringing with it the promise of injecting productivity, cost-efficiency and innovation to revivify the industry. To unlock its full potential, governments and other key infrastructure players must come together to implement the right mix of forward-looking regulations, “smart” oriented policies and intelligently calculated investments. At the same time, collaboration is key. In order to respond effectively to trends, both governments and private firms need to develop business models anchored in long term partnerships, rather than acting transaction by transaction. Without this cooperation, it will be challenging for the industry to achieve the fundamental changes required to respond to or to accelerate the introduction of technology into the ecosystem. The public and private sectors can complement each other in delivering smarter, more innovative infrastructure. Cross-border collaboration via platforms – such as the ASEAN Smart Cities Network (ASCN) – can facilitate knowledge transfer and the sharing of best practices. In just a few years, we could very well emerge with an infrastructure landscape completely different from the landscape we know today.
1 Land Transport Authority 2018, Harnessing Technology to Deliver Better Rail Reliability for Commuters, accessed 25 November 2019, Land Transport Authority, <https://www.lta.gov.sg/content/ltagov/en/newsroom/2018/8/2/harnessing-technology-to-deliver-better-rail-reliability-for-commuters.html>
2 Public Utilities Board 2019, About the Smart Water Meter Programme, Public Utilities Board, accessed 25 November 2019, <https://www.pub.gov.sg/smartwatermeterprogramme/about>
3 Wong Pei Ting 2017, HDB widens Adoption of Prefab to Boost Productivity, Today Online, accessed 25 November 2019, <https://www.todayonline.com/singapore/bigger-role-prefab-public-housing-projects>
4 Housing & Development Board 2018, Prefabrication Technology, Housing & Development Board, accessed 25 November 2019, <https://www.hdb.gov.sg/cs/infoweb/about-us/research-and-innovation/construction-productivity/prefabrication-technology>
5 Housing & Development Board 2015, HDB is First Public Sector Organisation to Win BCA’s Building Information Modelling Award, Housing & Development Board, accessed 25 November 2019, <https://hdb.gov.sg/cs/infoweb/press-releases/hdb-is-first-public-sector-organisation>
6 Land Transport Authority 2011, Project Planet: An Award-Winning Planning Tool, Land Transport Authority, accessed 25 November 2019, <https://www.lta.gov.sg/content/dam/ltaweb/corp/PublicationsResearch/files/ReportNewsletter/Connect/edited_FA_Connect_APR_Issue_Q1.pdf>
7 Urban Redevelopment Authority 2017, Harnessing the Power of Digital Technologies, Urban Redevelopment Authority, accessed 25 November 2019, <https://www.ura.gov.sg/Corporate/Resources/Ideas-and-Trends/Harnessing-the-Power-of-Digital-Technologies>
8 KPMG 2017, Electric Vehicles: A Case for a Proactive Approach, KPMG, accessed 25 November 2019, <https://assets.kpmg/content/dam/kpmg/in/pdf/2017/11/Electric-Vehicles.pdf>
9 Keegan, M. 2018, Shenzhen’s Silent Revolution: World’s First Fully Electric Bus Fleet Quietens Chinese Megacity, The Guardian, accessed 25 November 2019, < https://www.theguardian.com/cities/2018/dec/12/silence-shenzhen-world-first-electric-bus-fleet>
11 Asian Development Bank 2018, Closing the Financing Gap in Asian Infrastructure, accessed 25 November 2019, <https://www.adb.org/publications/closing-financing-gap-asian-infrastructure>
12 Liu, V. 2019, Energy comes clean at Singapore’s only Landfill Semakau, Straits Times, accessed 25 November 2019, <https://www.straitstimes.com/singapore/energy-comes-clean-at-singapores-only-landfill-semakau>
13 Haziq A., 2019, Government studying how to turn Incineration Ash into Construction Material, CNA, accessed 25 November 2019, <https://www.channelnewsasia.com/news/singapore/newsand-government-studying-how-to-turn-incineration-ash-into-11320966>
We thank the following for their contribution to the article:
- Narsingh Chaudhary, Executive Vice President, Power – Asia, Black & Veatch
- Richard Threlfall, Global Head of Infrastructure, KPMG
- Sharad Somani, Partner and Head of Infrastructure, Asia Pacific, KPMG (Singapore)
- Thoo Wee Meng, Head of Investments, TMT Sector, Leonie Hill Capital
- Global Infrastructure Hub