Booz Allen Hamilton

Booz Allen: America Needs to Re-imagine Infrastructure to Enhance Economy, Global Competiveness, and National Security

January 18, 2012

Outlines eight principles that must be addressed in any discussion on the nation’s infrastructure

McLean, VA – As the nation prepares to hear President Obama deliver his annual State of the Union address, Booz Allen Hamilton (NYSE:BAH) outlined essential items that must be included in any national discussion about the nation’s aging infrastructure.

“There is consensus across the political spectrum that infrastructure is critical to economic development, job creation, national security and competitiveness,” Booz Allen Executive Vice President Mark Gerencser said. “But a lack of harmony in the political process is limiting our ability to accomplish the big things that are required to re-build America’s infrastructure.”

In his 2011 State of the Union Address, President Obama said, “Our [nation’s] infrastructure used to be the best.” Booz Allen is hopeful that the President will again address the nation’s infrastructure problems and create the national momentum to avoid catastrophic consequences.

Below are eight principles that must be addressed in any discussion on the nation’s infrastructure:

  1. Create a shared and comprehensive national vision. America needs a comprehensive vision that inspires and guides planning and action at the regional and local levels. The vision should be a living framework that describes what could be achieved, expected timelines, and how success will be measured. It must also define new mechanisms, in addition to Public/private partnerships, to engage government, industry and civil society in flexible, adaptable, and innovative ways.
  2. Think innovation, not shovels. We will not solve our problems with repairs or extensions. America must re-imagine its infrastructure to meet the needs of its citizens in a future that abounds with both opportunities and competitive challenges. Building world-class infrastructure upgrades at home also prepares American industries to compete successfully in the mammoth wave of new infrastructure development in China, India, Brazil, and other fast-growing emerging economies.
  3. Take the long and integrated view. Short-term thinking is a recipe for failure. While there is undeniable immediate pressure to create jobs through infrastructure projects, creating a wish list of short-term projects has proven to be a mistake. For decades, the federal government has provided states and localities with funding for one-off projects – and now nearly every city has a series of unconnected transportation and energy systems.
  4. Rationalize the bureaucracy and its policies. Federal, state and local officials must ensure regulations, laws and policies are coherent, consistent, stable and enabling within and across infrastructures. For example, federal energy policy engages over 30 different entities that do not coordinate decisions, and transportation—as the biggest consumer of energy—doesn’t coordinate planning, policy, and spending with its counterparts in energy and environment. Infrastructures are becoming more interdependent and so should their governing structures.
  5. We cannot afford to buy our way out. America must innovate new financing, business, and operating models to ensure sustainable, safe and effective infrastructure performance for future generations. We must take steps to level the playing field for public and private investment sources. For example, consider eliminating the tax exemption for municipal debt or exempt all private infrastructure investment from federal tax.
  6. Plan regionally and think holistically. We need regional plans but there is no consistent form of regional governance to plan or implement actions. Megaregions present real promise. For example, one way to alleviate congestion at O’Hare International Airport would be to establish high-speed rail between Chicago and Milwaukee. Unfortunately, there is no ready mechanism for these two metropolitan areas to develop a joint regional plan.
  7. Make resilience a forethought—not an afterthought. Resilience will cost more if not designed in. More than security, resilience ensures enough capacity, redundancy and reliability against failures or catastrophic events caused by natural or man-made disasters, including cyber or terrorist attacks.
  8. Build for the next century, not the last one. Align incentives with objectives. Financiers, builders, owners, operators, and users face perverse incentives. For example, users have the least say in infrastructure design and those who pay for it often realize the least benefits. Adjust the incentives for the various stakeholders and place users at the center of all designs. Our re-imagined Infrastructure needs to account for America’s changing demographics. With 85% of the population living on 26% of the land, cities face unprecedented challenges and new demand patterns.

Booz Allen Hamilton is leading an effort to transform how our country and clients think about America’s transportation, energy and water infrastructures. As part of this effort, it is sponsoring a simulation on Re-Imagining Infrastructure to enable next generation solutions that leverage new business models, innovative technology, and funding—in scalable, sustainable ways. The simulation unites a “megacommunity” comprised of senior executives in the government, business and civic sectors to foster a shared understanding of our nation’s infrastructure challenges and develop a holistic approach to addressing them.



Re-Imagining America’s Infrastructure

Mark Gerencser proposes four steps for rebuilding the infrastructure of the United States.
  • Reimaging America’s Infrastructure
  • Mission Integration: Megacommunity Overview

About Booz Allen Hamilton

Booz Allen Hamilton is a leading provider of strategy and technology consulting services to the US government in defense, intelligence, and civil markets, and to major corporations, institutions, and not-for-profit organizations. Booz Allen is headquartered in McLean, Virginia, employs more than 25,000 people, and had revenue of $5.59bn for the 12 months to March 31st 2011. To learn more, visit (NYSE: BAH)

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