The future is technology

Technology is a key megatrend primed to transform the asset class, says a recent report, but what might a tech-dominated world mean for private investment?

‘The rapid evolution of technology” has the potential to create a digital planet in which innovation is “rampant” and private technology companies overtake governments as “the primary supplier of infrastructure assets and services”. This is one of three scenarios that could evolve from the 25 megatrends identified as most likely to shape and impact infrastructure in a report published by Global Infrastructure Hub in partnership with the Word Economic Forum and Boston Consulting Group.

Technology is perceived by industry stakeholders as an opportunity rather than a risk. None of the top five perceived risks to the sector, as listed in the the report, are tech-related. The internet of things, sensors and smart infrastructure, however, rank second highest overall as perceived opportunities.

Financial times

The report also contemplates the future of the financial sector and private investment in a tech- and digital-led world: “Investment shifts away from physical assets and toward technology that supports step changes in asset productivity. [The] industry becomes less capital intensive, there is a surplus of available capital and the role of independent capital providers becomes less important.

Six trends that could shape the world of infra

1 Rise of new materials and substances

2 Rise of green energy sources

3 Rise of the internet of things, sensors and smart infrastructure

4 Rise of artificial intelligence and automation

5 Autonomous driving and new transport modes

6 Digitisation (building information modelling, onsite collaboration apps)

“Large investment houses reduce in size and the investment industry becomes more fragmented with large firms competing with the family offices of the inventors, patent-holders, and founders of the fundamental technology architecture to fund the next technology innovation. Infrastructure investments have become routine corporate functions, rather than a niche asset class in the private markets.”

Whether this comes to pass remains to be seen. It is nevertheless food for thought for today’s infrastructure investors and managers when deliberating their current strategies on technology and how active a role they wish to play in shaping tomorrow’s world.