CSCMP's Supply Chain Quarterly
October 22, 2018
Forward Thinking

Industrialized nations may lose infrastructure advantage by 2030

Wealthier countries aren't spending enough on infrastructure to stay ahead of emerging economies, say respondents to a global survey of infrastructure experts.

A new report cautions that over the next 20 years, industrialized nations could lose their current edge in transportation and logistics infrastructure, and that providers of logistics and transportation services should be prepared to operate in a world with inadequate infrastructure.

The authors of the study, PricewaterhouseCoopers and the Supply Chain Management Institute at the European Business School, developed their assessment of the status of worldwide infrastructure by surveying 104 subject-matter experts from 29 countries.

Even though wealthier nations will be hard-pressed to keep up with burgeoning movements of both freight and people, it is unlikely that they will spend enough on infrastructure improvements to maintain their advantage in this area, the report says. In fact, 41 percent of the experts surveyed said that industrialized countries would probably lose their infrastructure advantage over emerging economies by 2030. For their part, developing countries will need to spend about US $465 billion annually on infrastructure if they are to catch up to the economically developed nations in that area.

The report also advises providers of logistics and transportation services to use scenario planning to analyze and forecast infrastructure impediments to moving goods. Carriers were also advised to assess a government's willingness to invest in infrastructure upgrades as part of any strategic decision to enter a new market.

Given funding constraints, regions that implement modern communication technology to expedite transportation will offer the greatest benefits to logistics service providers, the report noted. Technology is expected to play such a critical role that 60 percent of study participants predicted that by 2030, digital infrastructure would become a stronger driver of economic growth than transport infrastructure.

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