Is 2020 an anomaly or a cautionary tale for the infrastructure sector?

Publication Date
12 January 2021

Peter Colacino, our Chief of Policy & Research, gives his thoughts on lessons for the infrastructure sector from the events of 2020. (Read this article on LinkedIn)

The impacts of drought, fire, flood, cyber-threats and pandemic have been a potent image in 2020. Rapidly emerging, substantial crises with wide-ranging impacts across our cities and regions required major shifts in the way our economy functioned and the role infrastructure played as an enabler.

However, these threats are not new or unique. While the last major global pandemic may have been close to a century ago, the threat has remained present and is more pronounced in our hyper-connected global economy. So too, fire, flood and drought are regular features of the Australian landscape and the threat of cyber risk and trade disruptions are now ever-present.

While the concurrence of these impacts in 2020 is both unfortunate, the individual crises are not unforeseeable. Likewise, significant compounding disasters can be expected to occur again in the future.

Just as 12 years ago, in 2008 the Global Financial Crisis coincided with flooding in South East Queensland and northern New South Wales, heatwaves in Adelaide and the year closed with a devastating storm impacting Brisbane. Seven years earlier in 2001, the outbreak of SARS coincided with the September 11 terrorist attacks in the United States and the tail-end of the Asian Financial Crisis.

Much more than being an anomaly, 2020 represents a cautionary tale of the changing nature of our economy, the scale of compounding crises and the complex and uncertain environment in which infrastructure must operate.

Lessons from COVID-19 (five key trends)

The COVID-19 pandemic is both a health and economic crisis. Infrastructure Australia’s report Infrastructure Beyond COVID-19, released in December 2020 in partnership with L.E.K. Consulting, considered the impacts of COVID-19 on how we use infrastructure and the sector’s response to this dual crisis.

The report took a non-binary view, examining a number of potential recovery paths based on the speeds of both health and economic recovery. Some infrastructure sectors were impacted more than others, but the importance of the health response wasn’t limited to infrastructure sectors with direct customer contact, like transport and social infrastructure. With more people working from home, there were major shifts in utility use from CBDs to suburbs and regions, which has implications across sectors.

Public transport use has plateaued below pre-COVID-19 levels

In many areas, COVID-19 has accelerated existing and emerging trends, such as flexible working models. However, it has reversed others – for instance, people have moved away from public transport and into the car. It has also created new experiences, such as new digital cultural and arts offerings.

As our report shows, five key trends are paramount and common to the infrastructure sector’s response:

  • Digitisation – 9 in 10 Australian firms adopted online collaboration tools and infrastructure services from cultural institutions moved their services online.
  • Decentralisation – the rate of people moving to regions increased by more than 200% and there was a move from large centralised infrastructure to decentralised systems, like rooftop solar.
  • Localism – as social interaction moved more local, so did the use of public spaces, other social infrastructure and transport networks. This included a 23% increase in the use of national parks and green spaces.
  • Service innovation – new services evolved to cater for changing preferences, including 17 million telehealth consultations between March and June.
  • Adaptability – operators adjusted quickly. Where possible they changed service patterns and capacity, for instance, to respond to the shift of demand from the CBD to the suburbs. This included repurposing infrastructure to create surge healthcare facilities and increase ICU capacity by 291%.

The way the infrastructure sector operates needs to change

As many workers finished their final Zoom or Microsoft Teams meetings for 2020, the COVID-19 pandemic seemed to be entering a new phase. The health crisis had reached a milestone with borders opening and vaccines being rolled out overseas. However, before the flash of the first New Years’ firework, COVID-19 had sparked a new wave of border closures and the health impacts looked set to continue into 2021.

The health crisis continues to evolve and the pace of recovery remains uncertain. We have seen how rapidly trends can accelerate. There is clearly a pressing need for a new flexible approach to planning for uncertainty within the long-term, rigid environment of infrastructure.

We need to respond to the new normal and the step-change in customer expectations brought on by COVID-19. However, we also need to become more comfortable with continual change and uncertainty in order to meet community and customer expectations.

Part of this involves moving from risk to resilience planning. While traditional risk planning focuses on avoiding threats, resilience acknowledges some impacts are unavoidable and shifts the focus to absorbing, managing and recovering from disruption.

Responding to the impacts of the COVID-19 pandemic will be a central theme of the 2021 Australian Infrastructure Plan. Resilience will receive its own dedicated focus, incorporating practical steps that infrastructure owners can play to build both asset and community resilience.

Infrastructure Australia will publish the Australian Infrastructure Plan in mid-2021.