Avoiding the Safe Road
At Davos last week former Mexican President Felipe Calderon did well to bring attention to the massive investment needed to green our global infrastructure. But despite the astonishing price tag he quoted – $14 trillion by 2030 – the vision fell far short of the stark reality on multiple fronts.
One front is the amount of needed global infrastructure investment needed. The OECD has quoted a far higher infrastructure investment price tag – $53 trillion – within the same time period. That $53 trillion, which is the equivalent of four percent of forecast aggregate global GDP between today and 2030, is merely to ensure that global trade can continue uninterrupted. An additional $45 trillion is forecast to be required to green global infrastructure…leading the complete price tag to nearly $100 trillion, or almost eight percent of aggregate global GDP. To put this number into an American perspective, we invest a shade over two percent of annual GDP in infrastructure upgrades.
Another front left under explored is the source of this nearly incomprehensible amount of necessary investment. In an age where the EU remains on the brink of economic dissolution and the US is stuck in partisan bickering about deficit reduction, the public sector is incapable of providing such funding alone. Collaboration across the public, private, and civil (citizens and nonprofit organizations) is the only path to secure such funding. Some examples of cross sector funding are emerging. The Coca-Cola Company, for example, is working closely with NGOs, innovators (such as Dean Kamen, the inventor of the Segway and numerous medical devices), and local public sector agencies to implement a method to secure clean drinking water to citizens in Africa. We need more cross-sector collaborative efforts.
But cross-sector funding arrangements are only as effective as the level of collaborative thinking behind these efforts. Again the public sector alone is ill-equipped to serve as thought leader and cross-sector collaboration facilitator. We simply face too many challenges – water, energy, food, recycling, healthcare and the like – for the public sector to effectively tackle alone. Here too some within the private sector are rising to the challenge. Consider Unilever. The company has accepted the challenge of thinking through the critical challenge of securing our global food system. One of its public commitments is to connect 500,000 smallholder farmers to the global food system by sharing farming best practices and related technologies. Unilever’s actions at first might seem altruistic…and indeed there is a ‘for the benefit of all’ mindset resident in Unilever’s commitment. But Unilever is also looking towards its own future growth. As the world’s population swells to 9.5 billion by 2050, we will need sufficient food sources to feed everyone. Investing today to increase tomorrow’s likelihood for success is at the forefront of Unilever’s ongoing collaborative efforts.
I applaud former Mexican President Felipe Calderon for his courage in presenting a grand vision to the world’s leaders at Davos. But I fear the vision falls short of the financial and collaborative efforts needed to truly fortify and ‘green’ our infrastructure. Now is the time for sweeping vision for our world – the development of a collaboration economy where the public, private, and civil sectors jointly toil to kick start economic growth through investments that address our most vexing environmental and social challenges.
Eric Lowitt is an independent consultant who helps companies grow, innovate, and become more agile and competitive by embracing sustainability. His first book, The Future of Value, releases through Jossey-Bass/Wiley in September, 2011. Eric can be reached at email@example.com
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