The Critical Role of Infrastructure for the Sustainable Development of Countries

The need to build resilient and sustainable infrastructure is urgent. Resilient infrastructure will play a key role in building up energy and water systems and ensuring that communities can survive shocks and recover from them more quickly.

Infrastructure is not just a means of delivering services; it is a critical enabler and guardian of sustainable development.

Infrastructure plays a key role in all three dimensions of sustainable development: the economy, the environment, and society. Developing countries need guidance and coordination from the state level, as they cannot move fast enough by themselves to catch up in the green and digital transition. International organizations must provide a platform for countries to discuss these challenges and build global industrial governance that coordinates activities.

Dimensions of Sustainable Development

When it comes to the economy, infrastructure dividends range from the jobs created during construction and maintenance to the ability for infrastructure to generate economic activity, for instance, a bridge that links a rural village to urban markets. By connecting communities to cities, education, and employment, infrastructure such as transportation and telecommunications underpins national economic goals. Increasing investment in line with economic needs could add about 0.6% to global GDP.

In protecting the environment, infrastructure assets play a key role in conserving natural resources and reducing the impact of climate change. Clean energy generation plants, for instance, are critical in reducing dependence on fossil fuels. By taking cars off roads, mass transit systems contribute to the reduction in pollution and generation of greenhouse gases. In the US, estimates are that if someone commuting 20 miles a day switches from driving to public transportation, it would lower their carbon footprint by 4,800 pounds annually.

When equitable access is assured, society benefits from infrastructure since it delivers the services (such as power supplies, healthcare services, and sewerage networks) that are essential for sustainable development. Whether by providing the public transport that makes it easier for women in rural areas to participate in the workforce or the clean water and sanitation that reduce maternal mortality, infrastructure also advances gender equality.

Adaptation of Industrial Policies

Industrial capabilities can best help rebuild after multiple crises by focusing on innovation, value chain upgrading, and industrial diversification. Innovation is a key to creating resilient, inclusive, and sustainable industrial development. Value chain upgrading can be done through integration into global value chains, linkages between local and global value chains, and upgrading of traditional sectors. Industrial diversification can be done through exploring untapped sectors and creating synergies among sectors to promote sustainability.

The Financing for Sustainable Development Report (FSDR) 2023, officially launched on 5 April, alerted that massive investments are urgently needed to accelerate transformations, including in electricity supply, industry, farming, transportation, and buildings.

It reported that the number of countries adopting industrial policy measures more than doubled between 2009 and 2019, with most of the growth in developed countries. The revival of industrial policies focuses on creating decent jobs and addressing inequality in response to the 2008 global economic crisis; low-carbon transitions in response to climate change; promoting digitalization in response to rapid technological change; and enhancing the resilience of economies in response to the COVID pandemic and war in Ukraine.

Digital Transformation

The digital transformation is important in resilience-building. The accelerated adoption of e-commerce, e-learning, telemedicine, and telework is driving development. For several African SMEs, the shift to e-commerce platforms helped with market penetration and growth. Advanced technologies optimize industrial operations and increase efficiencies, with enhanced productivity and sustainability/resource efficiency.

Digital technologies, including AI and blockchain, can optimize supply chains and increase their efficiencies. Smart manufacturing plays a role in development by leveraging advanced technologies and data-driven processes to enhance productivity, efficiency, and innovation within the manufacturing sector through the use of technologies such as the Internet of Things (IoT), artificial intelligence, robotics, and big data analytics.

At the same time, digital technologies can be demanding and require skills, training, capacity, and organizational capabilities to be used effectively. The needs of today go beyond traditional education and skills training and require new institutional models of vocational training, financing skills, and adequate skills for the job on the ground. Multi-stakeholder cooperation is needed to establish regulatory frameworks that address potential risks and ethical concerns.

Green Transformation

The green transformation offers opportunities to developing countries by building their industrial capabilities in the green sector, creating jobs, income, and global competitiveness. Going beyond energy generation, the entire industrial ecosystem needs to be considered.

Significant investments in renewable energy systems have been made over the past decade, particularly concentrated in countries such as Kenya, Morocco, and South Africa. For instance, by investing now in green hydrogen technologies, several countries, including Sub-Saharan Africa, could become hubs for attracting substantial investments for upstream industries due to their great potential to generate green renewable energy, which is in turn central to transforming the industrial sector downstream.

Food Security

The current cost-of-living crisis and food price increases highlight the need for African countries to boost their food production and reduce the reliance on imports and related vulnerabilities. Increasing African food production has become a priority.

In 2022, the African Development Bank launched a $1.5 billion initiative to set up an African emergency food production facility. The current focus is on supporting smallholder farmers with seeds and fertilizers, but should also cover other aspects of improving and transforming the food production chain.

Conclusion

Ensuring that infrastructure is sustainable means approaching it not as a series of assets but as a system. Cities that are well equipped with public transport systems increase social mobility and equality. Shifting energy sources from coal-fired power generation to renewables not only cuts greenhouse gases but also reduces air pollution, improving health. 

A systems approach to infrastructure can also deliver cost savings or avoid unnecessary expenditure. Treating infrastructure as an interlinked portfolio of assets also enables more to be done to build resilience into the system.