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A group of open doors with a blue sky and a ray of sunshine.
Under that [democracy], the majority of humanity enjoys a high level of liberty and happiness. It is not without its flaws, the most serious of which is the turbulence to which it is vulnerable. Thomas Jefferson was a founding father of the United States Visiting the country as we begin to open up is a fantastic experience; America, particularly its infrastructure leaders, is on the move. That was my strong impression after talks with three CEOs of infrastructure companies in Houston and Galveston last week. It was an energizing message for the Fourth of July. Government, on the other hand, is a major concern in their thoughts – we all know about Jefferson’s obsession with functional, but little, government in Texas, but it’s also a major issue in every area of our country’s embryonic infrastructural Renaissance.
In infrastructure, government is everywhere, but where should it be strategically? New funding sources and technological advancements have reshaped the infrastructure industry, while the government is only now beginning to reconsider its role in leading, funding, and regulating the most dynamic infrastructure market in decades.
The three CEOs – one of a large software firm focused on major projects, one of a developing port focused on disruptive expansion, and one of a new energy fund focused on accelerating the energy revolution – were energized and focused. They’re fixated on big chances, big bets, and large risks. They are confronted with a once-in-a-lifetime opportunity: our economy’s abrupt emergence from Covid, which has catalyzed a massive economic transition (including supply chain reengineering), all while navigating our extraordinary technological revolution — from blockchain to hydrogen, and AI to machine learning, puzzle pieces all in the digitization and electrification of our economy.
To suggest that the federal government has a looming presence in infrastructure is an understatement. The government affects the success and speed of everything based on its objectives and conduct, as well as its competency, which is widely acknowledged to be inconsistent, unexpected, and arbitrary. Nobody is immune to public pressure, from Tesla’s Elon Musk to our three CEOs: “I’m not turning down free money,” one of the CEOs told me. Big plans and big benefits can be easily whipsawed – for better or worse – by Washington’s bureaucracy, its new monarch, and its sense of priorities in Texas and across the country.
MORE BIG OPPORTUNITIES FOR YOU The CEOs’ attention is drawn to great prospects, such as large projects and large investments. The Army Corps’ $26 billion effort to defend Galveston and Houston from rising sea levels is by far the largest. By far the largest market is upgrading the United States’ transmission infrastructure, which will cost $7 trillion to protect, generate resilience, and connect wind and solar power to buildings, manufacturing plants, and individuals’ mobility.
The sky is the limit for the CEO of a construction software company, as long as the government gets its act together, largely by staying out of the way. In fact, his viewpoint is quite smart and instructive: the federal government, in his opinion, should let states to experiment and discover what works best for them. As I pondered these ideas, the comments of another CEO from earlier in the week kept echoing in my ears: “The government always screws things ups,” he stated. Well, not always, but often enough in infrastructure.
Our Infrastructure Renaissance is being hampered by a two-speed system. Their thesis isn’t so much that government is evil as it is that it wields great power and uses it in a slow and uneven manner. The consequence is a completely out-of-whack two-speed system, with the private sector blazing ahead, excited, while the public sector tries to catch up and lead while questioning its exact position. This is a concern in general, but it is a life-threatening threat in infrastructure.

Project Development for Interregional Transmission, 2014-2021
CG/LA Infrastructure, Inc. is a company based in Los Angeles, California.

This two-speed issue has been a long-standing issue, and it has now become something far more dangerous. As technology and economic competition accelerate, there was an undercurrent of frustration that government continues to operate as it did when the world was a slower and less dangerous place. How else to explain missed opportunities and weaknesses that expose us to high-probability danger?
Our poor, inefficient, and fragile power grid is one of the most visible consequences of this two-speed system (see graph above). Since 2014, China has added 260 GW of interregional transmission capacity, while American firms are having a difficult time obtaining permissions and rights of way to build… anything. We’re on schedule to build only 3 GW – all in one project that hasn’t even sent out its first electron. This reduces our capacity to compete and creates weaknesses that expose us to blackouts and brownouts (Texas, California) as well as cyberattacks – all of which one of the CEOs, who is particularly equipped, has been attempting to fix for years.
Every night, these CEOs’ decision-making in Washington goes bump in the night.
What Is the Role of the Government? We succeed when the state works properly, performs a clear function, and moves quickly – it is the indispensable marshaller of major events, from D-Day to the Apollo moon landing. That is a proven fact. We fail when the state fails to play this function, whether through confusion, incompetence, or being entangled in Gulliver-like knots of inaction.
From the construction of the Erie Canal to the creation of our railroads, to paying the country’s early electricity, to the construction of our interstate highway system, the state has played an important role in our history. The federal government is the key player on the stage, setting public purpose and working to achieve it. It encourages, supports, and pays the private sector to develop the transformative public goods that have built our world brick by brick. Above all, it innovates in order to stimulate further invention.

From 1958 through 2019, the Pew Research Center’s “Public Trust in Government” survey was conducted.
CG/LA Infrastructure, Inc. is a company based in Los Angeles, California.
What happens if the public sector loses its leadership role, whether due to incapacity or ambiguity? Taking the public sector off the board is crippling infrastructure investment and will kill our infrastructure Renaissance unless it is reversed quickly. As you can see in the graph above, in 1964, 77 percent of the population believed government choices could be trusted’most of the time,’ and today, after decades of decline, only 17 percent of us – including my three CEOs – believe the government can be trusted’most of the time.’
What the US Government Must Do. The fabric of our existence is made up of infrastructure and its benefits: mobility, health, jobs, opportunity, and competitiveness. Infrastructure is now, and will continue to be, the brains of our economy. It is no longer feasible to operate at two speeds, with the private sector continuing to accelerate while the public sector slows to a halt.
In three ways, the state needs to modify the way it manages infrastructure:
First and first, acknowledge infrastructure as a top priority. Listening to the Texas CEOs and the investments they’re making, it seemed to me – once again – that Washington’s biggest problem with infrastructure is its inability to acknowledge that it’s a top priority. The Senate’s Innovation and Competitiveness Act is a step in the right direction, but once infrastructure’s importance in our country is recognized, we’ll get to work creating strategic assets that will encourage investment, such as a White House National Strategic Infrastructure Council, federal and state infrastructure banks, and even Tiger Teams of crosiers.
Second, define your strategy. The federal government, like national defense, needs a coherent, long-term strategic infrastructure policy. Attention-strapped, political infrastructure goals affect federal employees in Washington even more than they do my Texas CEOs. The bipartisan infrastructure bill, as well as bipartisanship in general, should be the watchword for infrastructure, just as it is for national defense. What other options do we have for overseeing the functioning of our federal infrastructure bureaucracies? (55,000 people in the Department of Transportation, 104,000 in the Department of Energy). The bureaucracy, like CEOs, requires a clear message so that they can develop, experiment, and make timely judgments without fear of retaliation. “Please simply let us make decisions,” they say all the time.
Third, make your performance known. It’s difficult to establish trust without first accomplishing, and then trumpeting, success – trust isn’t a mysterious thing; it’s the product of ability and shown expertise. The federal government, as well as state governments, must do a better job of calculating project benefits and then conveying those benefits across the country. Otherwise, no one will know what we are getting for our money, and whether we need to pay “double the $3 trillion price tag” to receive what we were promised, as one of our State of Infrastructure 2021 survey respondents put it.
Note: We must also do a better, more strategic job of getting performance-driving technologies into the hands of decision-makers in the public sector. Only 56% of those who responded to our State of Infrastructure study said they have any way of tracking long-term performance. This is why it is critical for government entities to invest heavily in technology. These investments also provide incredible potential to improve the efficiency and transparency of our investments: Technology, according to 86 percent of study respondents, plays a more “important role in driving better, cheaper, faster infrastructure.” They don’t have it, and they know I don’t have it./nRead More

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