Tag Archives: infrastructure

Infrastructure – why it matters, how it is changing and disruption

I’m travelling all day today by trains and ferry so I’ll wind back the clock to Sunday where I spent the day with Johan and his family with some incredible hospitality in rural Sweden which gave me a wonderful insight into Swedish life.  I meet Johan in the US – one of those chance travel encounters.  Here’s a lake we visited, it’s hard to believe that it ices over in winter so people can skate to work across the lake or drive a tractor on it.

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Sweden and NZ have a lot in common as smaller counties who value quality of life  There’s some differences in how that is achieved – like much of EU there are subsidies to farmers (tech geeks check out open data), restrictions on alcohol (can only by 3.5% alcohol in supermarkets and use a state owned monopoly for other alcohol) and higher taxes.  On the flipside there is free tertiary education, efficient public transport and cycling/walking and a diversified export economy.

Kommuninvest

Johan works at Kommunivest, which finances infrastructure development and investments of the Swedish local authorities and regions (very similar to NZ Local Government Funding Authority, which was based off Scandinavian models).

Kommuninvest was started by nine authorities in the mid-1980’s and now has a Aaa credit rating and the ability to source lower funding from all over the world.  Interesting times here with it costing you to keep money in the bank.  As I’ve mentioned previously, NZ simply doesn’t have the history in certain activities that other countries do – which is a limitation and opportunity.

So how is all this relevant to economic development and locations of any size?

Infrastructure

Infrastructure is often perceived as a boring subject but in many ways it is the most important because it sets the platform for everything else in society.  As Joe from the World Bank would say “Infrastructure is now the price of entry” for economies, and underinvestment either exits you from the game or makes you irrelevant.  What will the Asian Infrastructure Investment Bank (AIIB) do to further unleash economics in Asia?  The worst thing will be to sit still, which will be hard for some people as NZ continues to bridge the infrastructure deficit and keep up with the new pace of first world infrastructure.

What is infrastructure anyway? 

The nature of infrastructure is changing – Wifi has come from nowhere and is now an absolute necessity with people consuming and transacting online…how often do we see locations through the eyes of tourists?   Digital and data infrastructure is probably one of the least recognised but critical going forward.

What would disruption look like?

Taking this a step further, how long until we see disruption in more traditional sectors?  Will infrastructure be funded differently – crowdsourcing?  How long until the banking sector undergoes a disruption Uber or Skype style?  What will self driving cars to do insurance companies revenues from premiums and will peer to peer insurance become mainstream?

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Reinvention – the new normal

The weekend was full of lots more driving and some sightseeing, but most importantly time to recharge the batteries after an incredibly demanding week.  There was probably no better place to do it than in Oregon (photo of Smith Rock).

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Many of the people I’ve spoken to in Idaho and Oregon talk about the Oregon Trail, which previously I knew nothing about.  Can you imagine emigrating over 2,000 miles in a horse for 4-6 months?  Then get to the mighty Columbia River and being faced with a decision of whether to the run one of two gauntlets – down the river or over the mountains!  Learning more about the pioneers in the US puts into perspective the country it is today and it helps place life into perspective.

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Staying in Bend, Oregon showed what is possible when towns are faced with changes in industry.  Bend was founded as a logging town and now has a massive tourism industry, a growing technology sector and is a popular place to retire.  My meeting destination for today, The Dalles, Oregon is similar.  It’s been a trading town for 10,000 years but what trades hands is changing, from wool to aluminium and now technology.  Insitu started here and now has 800 employees whilst Google also located their first data centre here (one factor that helped was access to energy).  In the face of adversity communities are playing to their strengths and being creative to enable industry to develop.  The only constant is that change will keep happening.  How do recognize when that change is coming and what do you do?

Mid-Columbia Economic Development District (MCEDD) and Columbia River Gorge Technology Alliance (GTA)

The MCEED has been going since 1969, which shows how young economic development is in NZ.  They serve five Counties in two different states so collaboration is their strong point.  Amanda and the team focus on:

  • business financing, which has great payback and is changing with the likes of crowdfunding.  They explained the concept of Enterprise zones and how it can be used when a community is economically distressed through either high unemployment or low wages.
  • Industry development.  Jessica talked about the GTA as an example of industry collaborating in a cluster.  I suspect we will hear a lot more about STEM youth robotics, it is definitely preparing kids to work in the workforce of the future (or is that today?).
  • Regional coordination including strategy and ensuring enabling infrastructure is provided like transport, broadband, and financing.

From the outside looking in the team were deliberate about where future lies and I can see a lot of potential for this region as different industries continue to intersect.

The Dalles Port

Started in 1933, The Dalles Port has seen a lot of change.  They focus on bringing jobs to region through land sales and it’s fair to say they’ve succeeded.  Google is the high profile one but many of the other businesses are “small business” .  As an aside, it makes you wonder about classification of small business – how useful is it knowing that 97% of businesses are small, perhaps we can make it more commonly known the difference between no employees, micro (1-5 people) and small (6-19 people)?

Andrea and Kathy had some great insights:

  • Places need to find their niche – sounds easy!
  • Time and perseverance
  • Importance of community support, which I get the sense there is a lot of in The Dalles
  • Collaboration with local agencies, putting together a team to work through problems while cutting through bureaucracy

The Dalles is just over an hour outside of Portland, and we discussed how urban people can perceive places outside cities as “rural”…how do you overcome that perception, whether you’ve reinvented yourself or not?