US must embed digital technologies in infrastructure to seize next wave of economic growth

US must embed digital technologies in infrastructure to seize next wave of economic growth

The United States must transform existing ‘brick-and-mortar’ physical infrastructure into digital infrastructure to seize the next wave of economic opportunities that will create jobs and improve people’s quality of life, according to a new analysis from the Information Technology and Innovation Foundation (ITIF), a leading technology policy think tank. Released on the first day of national Infrastructure Week, the report serves as a policymaker’s guide to digital infrastructure, its benefits, barriers to deployment, and policy solutions to overcome them.

“Infrastructure has always been a prerequisite for economic growth and vitality—and now, as advances in information technology have fundamentally changed the economy, infrastructure also must evolve,” said ITIF president Robert D. Atkinson, the report’s lead author. “Most existing infrastructure will need to be hybridized, by integrating digital features, while some new infrastructure will be purely digital. But make no mistake: The country’s future growth prospects will hinge in no small part on whether it successfully transforms our infrastructure systems.”

As an example, it says for infrastructures where government is involved as an owner or operator, government should increase funding to transition to digital infrastructure. This means, for example, agencies like the Departments of Defense and Interior upgrading the infrastructures they are responsible for with digital technologies.

Hence Congress should enact a new ‘Cement & Chips’ funding approach that directs no less than 5 percent (approximately $2.5 billion) of the Highway Trust Fund (HTF) allocated to states to be devoted to digital and ITS-based infrastructure projects. Congress should also ensure that ITS-related implementations are immediately eligible for funding under the existing highway transportation authorization. They should also tie a share of federal surface transportation funding to states’ actual improvements in transportation system performance, which would promote an incentive to invest in cost-efficient digital infrastructure.

The report outlines the many benefits the United States (and other countries) can derive from deploying robust digital infrastructure, including:

  • Expanded capacity—through increased use of both existing and new infrastructure;
  • Time savings and convenience—through reduced congestion, simplified operations, and better decision making capability;
  • Cost savings—through waste reduction, increased efficiency, and more flexibility in the provision of key services;
  • Improved reliability—with greater predictability and fewer interruptions in key services; and
  • Enhanced safety—through improved resiliency to threats and interruptions.

ITIF identifies several barriers to faster and wider deployment of digital infrastructure, including costly and outdated regulations, a lack of public funding for investment, a small pool of workers with requisite tech skills, and ill-founded fears about data privacy and security.

The report says while digital infrastructure projects manage and manipulate large volumes of data, realizing their promise need not require the sacrifice of privacy nor security. Policymakers should not let privacy advocates and others opponents of innovation slow the needed transition to digital infrastructures. Rather government should work in cooperation with the private sector to ensure that public policies support privacy and security in ways that enable innovation and allow the data generated by hybrid infrastructures to be used to create value for society.

The authors propose a series of recommendations to overcome these barriers and ensure that government policies support the transition from traditional infrastructure to digital infrastructure:

  • Create ‘digital-friendly’ regulation;
  • Develop strategies for how agencies can support digital infrastructure in their areas of influence;
  • Increase funding for digital infrastructure; and
  • Don’t let privacy and security concerns slow deployment.

“Information technology is creating a world of smart enterprises, smart governments, and smart cities. It’s time to accelerate the creation of smart infrastructure to support them,” Atkinson concluded. “Doing so will generate an array of economic and social benefits. But without a clearly articulated goal of transforming traditional infrastructure into digital infrastructure and the right policies to make it happen, this much-needed transition will continue to lag.”

The PDF report can be downloaded here.

[Photo credit: World Economic Forum]

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