5: Investing in Infrastructure: A Road to Economic Growth

You’ve probably heard the term infrastructure, given its wide use in the media and importance to society. Although the infrastructure asset class is quite broad, infrastructure refers to the basic facilities and systems necessary for an economy to function. Today, an enormous need exists for infrastructure investment. Governments worldwide must invest trillions of dollars in maintaining existing infrastructure assets and devote more to building new infrastructure to support economic growth. Yet, a considerable gap exists between maintaining and building infrastructure relative to the amount of investment required to meet economic needs and long-term trends. Although federal, state, and local governments have traditionally been responsible for financing public infrastructure, fiscally constrained governments increasingly turn to the private sector to assist in funding new projects. Consequently, the investment opportunities in this sector continue to grow. Because governments cannot meet the global economy’s infrastructure requirements on their own, this situation represents a tremendous opportunity for the private sector to play an essential role in building the infrastructure needed to support global growth.