18th October, 2018
On Thursday 18th October, the Pacific Pension & Investment Institute (PPI) hosted the 2018 Asia Pacific Roundtable in Sydney, Australia.
Global Infrastructure Hub COO, Mark Moseley, participated in a panel discussion on Tech disruptions in physical infrastructure alongside QIC’s Tibor Schwartz Senior Adviser, Asset Management, moderated by Lincoln Webb, Senior Vice President, Infrastructure and Renewable Resources for BCI.
The panel session delved into the topic of risk posed by disruptive technologies in the infrastructure sector.Mr Moseley observed that insufficient attention is being paid to the critical issue of how our infrastructure assets will be affected by technological change.
“Infrastructure is a long-term investment; it’s supposed to last 10, 20, 30 years. You can’t assume that the technology today will be in place in future,” Mr Moseley said.
“Traditionally, the infrastructure sector wasn’t affected by rapid technological change. This makes it ripe for disruption.
“Certainly, there are risks, but there are also opportunities,”
The panel agreed that technology is not evolving at a linear pace, and that disruption affects different sectors at different times.
Importantly, if organisations are not ready by inflection point, there will be wide-ranging ramifications. Understanding the risks is the easy part. The hard part is not knowing which direction technology will move, limiting the ability to assess risks and what technology to back.
When asked how well governments and regulators should deal with the prospect of disruptive technologies, Mr Moseley offered the following advice:
“Governments need to be proactive. Infrastructure, because of its nature, will always have a public sector component.
“In particular, a public-private partnership (PPP) transaction is —as the name suggests—a partnership. If a situation occurs where disruptive technology has rendered an asset obsolete or financially unviable, governments need to work with the private sector to address the situation .
“We have seen examples in other sectors—competitive power markets for example.
“Governments need to be creative and will have to work with private investors to address these challenges.
“The answers aren’t obvious in advance, but you have to engage, not ignore the problem.”