“God does not want to do everything…” Machiavelli, The Prince
There may be nothing more important in infrastructure than vision – a sense of where you are going, and why you are going there. Once a vision is locked in place, then you have a sense of your goals, get impatient for results – in the case of infrastructure that means concrete things like business opportunities, better mobility, healthier cities and increasingly good jobs. Jobs especially matter.
A vision engages us, it captivates us – and at $1.2 trillion (or $3.5 trillion) it also promises us a shared sense of the future that we will be creating together. Vision is ambitious for us, asserting our will on the future: “we choose to go the moon.” Real vision is also really risky, charting a step advance from where we are now – at a time when we are coming out of Covid, facing disruption from the Fourth Industrial Revolution, and surrounded by lots of evidence of global warming. Are we up to setting and achieving a new vision for our country (and the world)? It was not small ball in the first 100 days of President Kennedy’s administration that he choose to go to the moon.
One notable, and fixable, problem with the Infrastructure Investment & Jobs Act is its very lack of vision. This is a big problem. It doesn’t just take the emotion out of the ten year investment plan, it strips it of its power to organize priorities, create a reliable funding scheme and navigate the coming disruption (the next decade will be stormy, something much easier to manage if we believe we are on the way to a Promised Land and are confident in our strategy for getting there).
The Vision Opportunity in Our Bipartisan Infrastructure Initiative. Why are we spending this money, whether $1.2 or $3.5 trillion? To fill potholes as we did ten years ago? To build the greenest economy on earth, as people of most persuasions – and almost all of the young – would like? To address the Chinese threat, as most in the center and the right might insist?
It cannot be all of the above, that would simply be a prescription for lathering spending around the country, responding to the loudest voices. We have to choose. Right now vision is absolutely crucial for three reasons:
First, vision creates the context for making decisions, and setting priorities – it injects direction and urgency into public sector decision-making (and for private sector risk-taking). A country with a green vision, for example, has to focus resources – and quick approvals – on wind, solar, high voltage transmission, energy storage and hydrogen. It has to make big bets, risk failure, create a sense of urgency. The hydrogen map below shows that in the case of hydrogen – and many other initiatives critical to our future we have begun the process, with more than 50 hydrogen investments to scale. No one is telling that story – let alone driving it, by connecting to a wider vision.
Vision matters – not only in terms of context, and priorities, but by its clarity it enables leadership, and drives urgency. For example, a U.S. state that wants to transition from an extractive economy such as coal, into a high margin digital economy ought to militantly highlight a clean energy and quality of life narrative. Investment would single-mindedly pile into projects that drive that narrative. On the other hand, a country that derives most of its revenue from a single globally strategic infrastructure project, and wants to transition to a successful Fourth Generation economy as a work/play crossroads for the world, will need to eradicate – urgently – its reputation for corruption, while educating its population to seize the opportunities in which it is investing. Getting vision right is no guarantee for success, but it is the indispensable ingredient.
The second big reason why vision matters is that – for us to believe in it – it demands a robust scheme for funding building block projects. Without reliable funding projects, initial projects – quick wins – will be slow to materialize, mean in terms of ambition and less than optimal in terms of performance. This is the giant question at the heart of the current infrastructure bill – how do we pay for what we promise?
Traditional funding schemes no longer work for the large challenges, and even larger opportunities that we face. Our $30 trillion debt overhang has punctured, fatally, the capacity of traditional tax and debt schemes to move us confidently forward. Senate negotiators have not addressed new funding sources, and promising next generation channels (including a data tax, and the deployment of pension fund assets into increasingly high-performing infrastructure projects) seem to have been too high a bar for them to tackle.
Unless funding is addressed, U.S. infrastructure investment will go over the next ten years. This is the problem we all see, and nobody wants to face. Currently we spend annually 62% more on federal interest payments than we do on transportation (70% of which is O&M anyway, not new project funding); according to the Congressional Budget Office by 2031 (with much older, and hence more expensive to maintain infrastructure) we are projected to spend 700% more on interest payments than we spend on infrastructure.
The Army Corps of Engineers, an agency that holds the competitiveness of our country in the palm of its hand – hydropower, waterways, ports, water resources – is my favorite example, and one of my favorite organizations. With a $100 billion project backlog, and something south of $2 billion in annual appropriates for new projects, the Corps is a second order priority – while any vision of our country’s future would place them at the very top of the list for driving a 10X improvement in jobs, productivity and leisure.
If the bipartisan debate shows anything it is that a) we urgently need to develop new funding sources for infrastructure, and b) no-one – including observers from China – will mistake the current funding scheme for something that is self-confident, ambitious for all of us and strong. What should be our man on the moon moment is not yet anything of the sort.
Third, vision – which is disruptive – is critical at this moment when our economy, and our world, are facing a series of massive disruptions. As you can see from the graph below, vision particularly disrupts investment in bad or marginal projects, or at least it should! AI, Machine Learning, 5G-enabled projects, electric vehicles, autonomy, smart cities, blockchain, all are key to the future we need to create. Having a clear vision, and measuring projects starkly against the objectives of that vision, are absolutely fundamental to infrastructure investment decisions – for our country (or individual states, other countries, and fundamental institutions like the Army Corps). We need to choose good disruption if we are going to seize the next decade.
By the way, one of the biggest disruptions – the creative disruption – will be in the infrastructure business model. The digitization and electrification of everything will determine who wins in infrastructure, domestically and globally. Looking a bit in the rearview mirror, Brendan Bechtel pointed out in a recent presentation: “Bechtel was one of the top 10 global construction firms for decades, and now we aren’t even in the top 10 – while seven of the top 10 are Chinese firms.” Our vision for our country, and the world, needs to urgently build a new infrastructure business model based on our strengths: technology and organization on the one hand, and market ethics and the power of the human spirit on the other.
Another thing about vision – it is wildly ambitious. And at the level of the state it is ambitious for all of us, driven by all of us, prizing the creation of public goods. This also means that the public sector requires the entrepreneurial mindset that has been slashed out of it by politics and indecision – we need a public sector that once again, just as when we put a man on the moon, finds joy in trying new things, taking risks, chancing failure, and guiding success.
Vision as the Keystone – A Challenger Vision, a Recovery Vision or a Leadership Vision? Arguably the key fact about getting vision right is clarity – in the type of vision we need, and the type of vision the world needs. China has a Challenger Vision, something that worked well for a decade, and that is now being replaced – with no little difficulty – by the controversial Global Leadership vision embodied in the Belt & Road.
This moment – and I would argue the world – demands of us something that is captivating, exhilarating, engaging. Build Back Better looks and sounds like a Recovery Vision, at a time when all of our language, posture and strength is focused on creating a new economy – and leading the revitalization of the world’s democracies. Our leadership vision – organizing our effort, funding that effort, choosing how we navigate the shoals along the way – might better be described as Build Forward Together.
Final Word – Jobs. Now let’s talk about jobs – a tremendous topic, highlighted in the title of the legislations but missing in the 2700 pages of the Infrastructure Investment and Jobs Act. What is interesting is not that it is hardly mentioned (65 times, with no discussion), nor that we don’t discuss a way of measuring job creation (direct, indirect, induced – those jobs enabled by great infrastructure), but that the integral jobs bargain at the center of the entire discussion is simply ignored.
We are making investments to create a whole category of new jobs – so what are those jobs, how do we even know the money spent will fulfill the bargain that we are making with citizen investors? If we get infrastructure investment right, then we lead, in advanced manufacturing, in advanced agriculture, and in the kind of dignified job creation that the Fourth Industrial Revolution promises. We choose the future, and we create it. We can’t talk about the Promised Land without talking about jobs – and we don’t talk about jobs.
Paraphrasing Max Weber, if man is an animal trapped in a web of symbols, then our infrastructure – the bridges, the airports, the water we drink, the electricity we use, the fuel that moves us – inform us constantly about who we are. This is important – and as we move into a very different future than the world in which we live now, and in which we productively assert our global leadership, how do we drive fortune out of the equation, and replace that with the future we choose to create? We can only do it with vision, the indispensable keystone.