Future demand for infrastructure services

© Cambridge University Press 2016. Introduction: The nature and scale of demand for national infrastructure services is driven by long-term changes in population, the economy, technology, society and the environment. However, how those factors affect the longer-term demand for infrastructure is not straightforward. Investment in infrastructure will be challenged by a number of fundamental long-term trends that include demographic developments (e.g. ageing and urbanisation), increasing constraints on public finances, environmental factors (climate change), technological progress (especially in the area of information and communication technology), trends in governance (particularly decentralisation), an expanding role for the private sector and an increasing need to maintain and upgrade existing infrastructures (OECD, 2007). Chapter 1 highlighted the relationship between infrastructure and the economy. However, the causation between infrastructure availability, economic growth and productivity remains subject to much uncertainty because the relationships between infrastructure and the economy are multiple and complex (Kessides, 1993; Serven, 1996; O'Fallon, 2003; Prud'Homme, 2004; Bourguignon and Pleskovic, 2005; Straub, 2011). Moreover, it is not necessarily generally the case that growth in the economy and population results in increasing demand for infrastructure services. For example, in the transport sector the notion of ‘peak car’ (Le Vine et al., 2009; Millard-Ball and Schipper, 2010), asserts that car ownership and usage may have plateaued (Chapter 5); and, the quantity of solid waste which needs to be dealt with by infrastructure has been decoupled from economic growth over time (Chapter 8). Nonetheless, it is clear that a growing population and economy are important factors that influence demand for infrastructure services, even while the relationship between these underlying factors and demand is changing. Moreover, it is not just aggregate demand that is