Ref: GS-Economic-increasing-infrastructure-gaps


Increasing infrastructure gaps

There is a widening gap between the world’s infrastructure spending and the level of investment actually needed to support expected population expansion and global GDP growth. Over the next decade, roughly 60% of these future investments will be needed in emerging economies. Will lagging infrastructure affect your business?

Despite a recent rise in investments, the world is not channeling enough of its resources into transport, utilities and other essential systems. Current spending would need to jump from $2.5 trillion to $3.3 trillion a year to support economic growth, according to McKinsey. Today, over two billion people live in places that the World Bank categorizes as “lagging areas,” lacking access to basic services, economic opportunities and solid infrastructure. Of these, one billion live in slums. On the 2030 horizon, the world faces an 11% underinvestment gap that will result in deteriorating infrastructure assets, underserved citizens and lower business productivity. In contrast, bridging infrastructure gaps would bring both short-term benefits (job creation, improved health and quality of life) and long- term benefits (one dollar invested in infrastructure is estimated to boost economic productivity – in the form of raised GDP – by 20 cents).

Did you know?

A hallmark of national competitiveness for Nordic countries is their emphasis on excellent infrastructure. Iceland, Norway, Denmark, Sweden and Finland all place in the top 20 for basic infrastructure in the latest IMD World Competitiveness Ranking.

Jonathan Woetzel, Nicklas Garemo, Jan Mischke, Priyanka Kamra, and Robert Palter. “Bridging Infrastructure Gaps: Has the World Made Progress?” McKinsey Global Institute, October 2017. (accessed 19 December 2018). Sameh Wahba. “Lagging Regions.” World Bank Blog, 31 May 2018. (accessed 30 November 2018). IMD World Competitiveness Yearbook, 30th Edition, 2018. (accessed 19 December 2018).


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