The index ranks how tangible buildings and infrastructure contribute to each country’s GDP across 36 of the world’s largest economies.
The development of new buildings and infrastructure has fueled national economic growth for centuries. Using national data sources, the report quantifies the economic returns generated from each built asset and analyzes how this has changed within two years to forecast returns over the next decade.
This year’s report finds that China is maintaining its lead with the highest financial returns from built assets, almost doubling the U.S. figure of $5.4 trillion. While the U.S. still claims the No. 2 spot for built asset productivity, decades of chronic under-investment, an expanding population and aging infrastructure have reduced the performance of existing U.S. assets. This loss of productivity from transit, rail, ports, aviation and roads is pulling negatively against the U.S. GDP’s return on assets. However, new infrastructure investment like that proposed for the next 10 years by the incoming U.S. administration could have a lasting impact on U.S. built assets and economy.
But what actions can cities take to invest in our built environment in a way that will deliver quicker economic returns that are also sustainable over the long term? For mature markets that struggle with doing more with less, maximizing existing built assets is key.
Asset Investment Strategies
As labor productivity, investment and population growth slows over the next decade, asset productivity is going to be a critical driver of economic growth and embracing more effective asset management models can drive better short and long-term returns.
Align your organization based on desired outcomes: Most public agencies are structured in a siloed way, which also creates a siloed approach when it comes to budget planning. Instead, agencies need to look across their total asset needs in a holistic way to optimize budgets and expenditures. Establishing an internal governance that is centered around desired outcomes will lend itself to smarter investment decision-making.
Use data to drive decision-making: Through Building Information Modeling, Big Data and other tools, agencies can collate and leverage large amounts of data to shed light on priorities, needs and opportunities, enabling for maximized financial performance.
Make innovation a priority: Thinking outside the box and using alternative means is necessary to make an impact on U.S. built assets while we continue to experience ongoing funding gaps. Some agencies are seeing success through open collaboration, transparency in data (open sourcing), and collecting input from external sources. This has generated new ideas and solutions that may not have come to fruition through traditional means.
Asset investment strategies performed with centralized planning that leverage people, data and analytics can produce a more efficient spend. Improved design and integrated thinking ultimately reduce costs and produce better outcomes.
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