Economic and Social Research Council
Making inroads in infrastructure
Professor Richard Dawson, Director of iBUILD, says an effective infrastructure is absolutely crucial to deliver economic growth and innovation in the UK. It's a backbone of how we function as a society, but often overlooked, and we don't miss it until it stops working.
Funded by ESRC and the Engineering and Physical Sciences Research Council (EPSRC), iBUILD – an acronym for 'Infrastructure business models, valuation and innovation for local delivery' – is a consortium of researchers from Newcastle University, University of Leeds and University of Birmingham. The consortium is focused on exploring ways of strengthening our infrastructure and has just come to an end after nearly five years.
A key challenge for the UK is to develop a broader and more integrated approach to infrastructure, argues Professor Dawson, Director of iBUILD.
"Currently we have a fragmented infrastructure organisation, consisting of mostly private utility companies, lacking effective join-up. Utilities such as water, gas or electricity are not managed along the same boundaries geographically or structurally, but operated under different owners and management practices. The sheer variety of ownership models means that they can be run quite differently – depending on whether they are FTSE 100 companies, owned by overseas sovereign funds, investment banks or local trusts," he points out.
"There are limited mechanisms to incentivise the different stakeholders to work together. This is starting to change for national infrastructure with the National Infrastructure Commission, appointed in 2015, but there is still a way to go."
Although the variety of actors and lack of coordination is a clear challenge, Professor Dawson believes governance is a huge part of the issue. "There are regulatory barriers that directly discourage vertical integration. For instance in the electricity sector, there are a range of different companies and agencies involved at different stages from production to consumption. The market best suits big utility companies and is less accommodating towards other models, for instance small community-owned energy producers. These challenges extend across sectors, where regulation constrains how different utilities can work together, potentially missing opportunities to deliver services more efficiently."
Infrastructure networks are becoming increasingly interconnected, mainly driven by digital technology. Traditionally, infrastructure would mainly mean physical structures – pipelines, roads, pylons – but with the rapid expansion of web-based services and other digital technologies the physical/virtual divide is becoming more and more blurred.
Take traffic lights: Software is used to manage traffic light sequencing and ensure optimal traffic flow. Even when digital technology isn't directly part of operations, it's increasingly used to monitor the physical infrastructure and flag issues, for instance need for repairs.
On the flipside, going more digital and interconnected also makes networks more vulnerable – whether it's accidental glitches or deliberate sabotage. "We've seen extreme weather events where damage to physical structures cascaded into the virtual infrastructure. For instance, the 2015 flooding in York led to disruption of emergency services 85 miles north in Tyneside, as the 999 calls were routed through a York-based exchange. The flooding also affected ATM banking services and led to problems with cashpoint withdrawals. This interconnectivity is introducing new vulnerabilities that we do not yet understand."
It would be tempting to conclude that less connectivity and small-scale local networks would be the way to go for more robust infrastructures.
"If you base everything on a local solution, there's nowhere to go for backup. One severe event can effectively wipe out the whole system of infrastructure you depend upon. A local energy grid based on smart technology can provide sufficient resilience in a small area, but going up in scale you need redundancy, for instance if there's a surge in demand, or loss of supply in several places simultaneously," says Professor Dawson. "What is needed is a good mix of agile, smart local systems and larger regional/national networks to provide the necessary backup."
iBUILD (Infrastructure business models, valuation and innovation for local delivery), comprising researchers from Newcastle University, University of Leeds and University of Birmingham, has focused on developing new business models to improve the delivery of infrastructure systems and the services they provide.
This article was published in the spring 2018 issue of the Society Now magazine.
- Contact: iBUILD Director Richard Dawson, Newcastle University
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