The bend in the road is not the end of the road,
……unless you fail to see it
Industry leader insights, By Raveen Jaduram
One of our emerging challenges is that society is increasingly gravitating towards the comfortable. With comfortable, comes the notions of certainty. Change brings uncertainty and the anxiety that accompanies it. The current Covid-19 pandemic across the globe is demonstrating the chaos that entails with something that was always known to be a possibility, but never assumed to be what would happen to “us”.
There are two points that I wish to raise. The first is our ability to sense and read the signals that tell us of the radical reshaping of our environment – whether it is the physical environment, the political landscape or our commercial marketplace. The second is our own ability to proactively work towards shaping that environment. Both of these tend towards the recognition and acceptance of the uncertainties and discomfort of what we will face. There is a minority among us who not only accept these principles, but take advantage of the opportunities that arise. The closer they can align the second point to the first, the more likely they are to favour rewards for the risks they take.
Prior to 2020 and Covid-19, the World Economic Forum identified the top five global impact risks as being water crisis, natural disasters, extreme weather events, failure of climate-change mitigation and adaptation, and weapons of mass destruction. From a likelihood perspective, water crisis and weapons of mass-destruction were replaced by cyber-attacks and data fraud. Chronic diseases last made the top five risks in 2010, and the rapid and mass spread of infectious diseases was mentioned once during the decade in 2015.
We identify the risks that we feel most vulnerable to based on our recent experiences. After the devastation and tragic loss of lives during the Christchurch earthquakes, we are more aware of what the consequences of natural disasters could be. More importantly, we know that it is very probable that they will happen to us. There is a similar learning from Covid-19. These infectious diseases are not confined to the third world. We are just as susceptible to them here in New Zealand, despite our geographic isolation.
Covid-19 is very much impacting to varying degrees the lives of all humankind. If we were to survey the population to find out what their ranking of future risks were, infectious diseases and pandemics would most likely rank highly. Over the next few decades, what are the biggest risks facing society from an asset management perspective? The assets that we concern ourselves with are mostly infrastructural assets. And most infrastructural assets are owned by governments – central, state or local. Infrastructure is necessary for the wellbeing and growth of society. It follows, therefore, that the provision of infrastructure is a social contract.
It is not surprising that water crisis, natural disasters, extreme weather events and climate-change have held the top risk categories over recent years. We can add pandemics to the list for now. Collectively, the list reflects risks around the changes to our natural environment. There are other megatrends creating an era of great change in the near future. The first is the continued rapid pace of technology and advancements in automation, machine learning, robotics and digitalisation. And this will be accompanied by increasing cyber risks, data thefts and privacy concerns. The second is geopolitical trends including the rise of China as a superpower, impacts on trade, supply chain, retrenchment from globalisation and conflicts. The third is around cultural and societal changes such as increased diversity, inclusion and shared equity.
Governments across the planet are investing in infrastructure as an economic stimulus. These projects could be shovel-ready or shovel-worthy. If lucky, they could be both. The persistent need to address climate change – and its effects on water, weather, disasters – and to mitigate the emerging risks from the anticipated mega trends, provides a strong signal as to where prudent infrastructure investments should be made.
We can be certain of this: the future is uncertain. We should accept that shit happens, and it happens to us too. With our scientific and engineering backgrounds, we know what is possible, but we should not confuse this with what is affordable.
We have the ability to shape the future of infrastructure delivery and the sustainable use of existing assets. By changing how we operate, we must slash the costs and time to deliver infrastructure. We must increase the social dividend, reduce carbon emissions, increase productivity from technology, eliminate wastage, and increase resilience.
If we sense and read the signals, if we debate and collaborate, if we are honest and transparent, if we remove the politics from the narrative – then we can stop fooling ourselves of the comfortable trip along this beautiful stretch of road. There is a hidden bend coming up.
Raveen is on the board of the New Zealand Infrastructure Commission – Te Waihanga, and is on the board of IPWEA NZ. He has been an independent director of Wellington Water, president and chairman of the Water and Wastes Association (now Water New Zealand), chairman of the Water Sector Senior Executives Forum, on the board of the Committee for Auckland, on the Steering Group of the Business Leaders’ Health & Safety Forum and chair of the Centre for Infrastructure Research, University of Auckland.
Raveen did post graduate studies in business at Stanford, Macquarie and Auckland Universities and has also attended INSEAD. Up until recently, Raveen has been chief executive of Watercare Services Limited and has been the managing director and chief executive of Australian private water company Murrumbidgee Irrigation Limited. He has held numerous senior executive roles within the water industry in New Zealand and is regarded as a global water leader.