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Interview: Tackling the Infrastructure Leadership Deficit

Matt Ball on October 4, 2015 - in Interview

The issue of America’s aging infrastructure gets more important every year in terms of global competitiveness. Rosabeth Moss Kanter, a bestselling author, Harvard Business School professor and lauded business thinker, equates this deficit to a lack of leadership.

Helping leaders make an impact is her mission, so she latched onto this problem to elevate its importance as well as chart a path forward. Informed Infrastructure Editor Matt Ball spoke with Kanter about her research and new book, MOVE: Putting America’s Infrastructure Back in the Lead. The interview covered the impact of infrastructure on U.S. competitiveness and economy as well as the role of private investment and technology innovation.

I2: To start, please frame Harvard’s leadership initiative and the U.S. Competitiveness Project?

Kanter: The U.S. Competitiveness Project has been underway since approximately 2011, and it’s because of Harvard’s commitment to a strong America, even though we’re a global institution that serves students and executives all over the world. Without a strong America, it will be difficult to serve the rest of the world, and the rest of the world is interested in America continuing to be a leader.

A group of us began with assessing various aspects of U.S. competitiveness, which means the ability for the U.S. to meet world standards and create a strong economy with prosperity for all citizens. My part of the effort was to look at the ecosystem and how we support, create and promote jobs. So I looked at innovation and how ideas get commercialized and skills get built, and so forth. There was one missing piece in all of this, and that was infrastructure.

I2: Do business leaders understand that the quality of America’s infrastructure impacts their competitiveness?

Kanter: There has been an almost annual survey of business leaders about how strong the U.S. is in terms of competitiveness. Infrastructure and logistics, in particular, got fairly low marks. The lowest marks were given to K-12 education, and the highest marks to innovation, higher education and technology.

Down at the low end was logistics. I saw that nobody was focused on that in our project. I took it on, in part, because of the Advanced Leadership Initiative and a former secretary of transportation, Rodney Slater, who is a fellow in that program. I had many long talks with him, and he was very helpful in shaping my thinking.

We decided to convene a summit to bring together leaders in all relevant fields with a focus on transportation. Other forms of infrastructure were included, but our focus was primarily on transportation. I organized and led the summit, with 200 top leaders.

The background research to prepare for the summit led to my thinking that this topic needed broader public attention, and led me to write the book.

I2: How did this issue of deficient infrastructure get connected to deficient leadership?

Kanter: At the Advanced Leadership Initiative that I run, our goal is to deploy a leadership force of experienced leaders who have 20 to 30 more productive years after their primary income-earning years and can be deployed to work on significant system-change problems. Infrastructure is a significant system-change problem. It’s not owned by any single organization, it requires binding consensus where there are often conflicting goals and multiple stakeholders. The combination of U.S. competitiveness issues plus our goal in advanced leadership, where we work all over the world, was a perfect combination for me.

Some of our fellows, who were top leaders and transitioning to their next years of service, included people who had done infrastructure finance for a major global bank and a lawyer who had been a leader in project-finance deals. I learned a lot from them. I learned that most deals for projects, even though he was based in New York, were outside of the United States. He said there isn’t enough attention in the U.S. to private investment in infrastructure.

I2: One of your quotes from the book that stuck in my mind is that if we’re stuck in traffic, we can’t be leaders in the world. How important is it to tie issues such as congestion to our economy?

Kanter: Well, it’s not just congestion. There are so many things that affect how well we can do in the world. We lose productivity because of being stuck in traffic. We are No. 1 in the world in the number of available airplane seats, although that’s declining a little with the consolidation of the airlines. But we are way down list in just about everything else, including the efficiency of our airports.

We lose productivity and efficiency, and even though people can fly in the United States, delays and canceled flights cost the economy many billions of dollars per year. When goods can’t be shipped across the country, because they’re stuck in ports, or when there are problems with aging track and delays in getting goods places, there are impacts.

In the book, I talk about Chicago, which handles about a quarter of all rail traffic in the United States. The amount of time it takes to get through Chicago (according to a New York Times’ reporter) is about the speed of a motorized wheelchair because of aging infrastructure and tracks that cross streets. Chicago has been trying to untangle that and have been doing a good job since the early 2000s. They identified 72 projects, of which maybe half are completed, but they’re going to run out of money to do the rest.

I tell a story in the book about visiting one of the sites where they were untangling tracks and putting in overpasses and underpasses and speeding up everything. It’s right by a Ford plant, and they almost lost 3,000 jobs because the Ford plant wasn’t going to stay there. Ford needed to be able to ship the cars from the plant, and employees need to get to work. This project is going to make a huge difference for jobs and quality of life, because they are going to put parkland in, and a whole neighborhood will be opened up and revitalized.

These projects have a huge impact. Yes, delays are costly. It’s also about a lack of efficiency and safety. We lose lives because of failing infrastructure, as in the recent Amtrak derailment in Philadelphia.

I2: We’re still the No. 1 economy in the world, but will this issue cause us to slip behind China, who are prioritizing infrastructure investments?

Kanter: It’s not just can we hold our own in the world. Foreign visitors have to arrive in our airports, and many of them are subject to huge delays at customs and also somewhat surprised by the conditions of U.S. major airports. Then there are few connections between airports and cities in terms of light rail to our downtowns. In many airports in Europe and Asia, you can step off your flight in arrivals, and walk a few steps, and get on a train to the city. That’s true in Heathrow in London, in Tokyo, Shanghai, etc.

You begin to lose competitiveness in other ways if infrastructure is bad. You hurt your own population, you limit opportunities, and you also discourage foreign companies from locating in the U.S. We also need to get our ports ready for Panama Canal ships on the East Coast. Halifax has a deep enough port, and we like Canada, but we don’t want to lose all the business to other places.

I2: How tightly aligned are these issues with economic justice?

Kanter: At this time, there’s so much concern about poverty, inequality and inner cities that might explode, because of frustrated citizens, as we saw in East Baltimore. We don’t have enough public transportation, and we need to give our inner cities access to the jobs that exist.

Chicago, which I think is doing a great job with a 21st Century transportation plan, scores 57th in the U.S. among major metropolitan areas in terms of getting to a job within 45 minutes or less using public transportation. We know that the people in affluent neighborhoods have access, but in the poor neighborhoods that remain poor, they don’t have it.

I2: How does the civil engineering profession factor into a resolution?

Kanter: This topic is much bigger than whether we have excellent civil engineers. We have great civil engineers and great technology in the United States, but we don’t often use it. This is really a question of nation building, of building the nation for the future and being ready for the 21st century.

We have so much infrastructure that’s literally antique—defined as 100 years old. We have great technology, but it’s often used in other places. We don’t have enough broadband for example, and Internet technology is going to power so much infrastructure in the future. This includes dynamic pricing on roads, which encourages private investors with the means to monetize people driving on roads.

I2: What drove you to shift your focus from books on leadership to a book on aging infrastructure?

Kanter: There are so many opportunities, and I saw this as an area that was neglected by anyone other than the inner-circle professionals. It’s also being neglected by Congress, as they’re not even passing a five-month extension of the Highway Trust Fund.

Whatever we think about the Highway Trust Fund, the fact that they can’t agree to extend it for five months is appalling. I’m looking at equipment out my window at home in my street and am happy my city maintains the roads that I drive on. Congress would have all this work suddenly stop?

Beyond politics and engineering, it’s important to the public; it’s important to our health and safety. If we don’t deal with congestion, the air will get worse and worse. We don’t have the problem of coal-fired energy plants in the city the way Beijing does, but traffic is a big source of air pollution in the United States. Transportation is also the second-largest source of carbon emissions after energy. So we should be using technology and new business models to improve infrastructure and get more cars off the road.

Parking is a leading source of congestion and emissions, with people driving around looking for parking spaces. There are now all kinds of apps, including those deployed by cities, that can help people find and pay for parking easily. We’ve already re-invented the parking meter.

I2: Is invention a key ingredient to tackling the problem?

Kanter: The three R’s involved in infrastructure are repair, renew and reinvent. I want more reinvention, and every time we repair, we should renew, but we should also reinvent.

I get excited about the future potential and about innovators doing things like flying cars. Driverless cars or automated cars we might see sooner, but that will still take a while.

I don’t see why we’re not putting more sensors in roads automatically when they’re rebuilt. The potential lies in wireless connections, so the roads tell you when they need to be repaired, and when they’re too icy, and they can give information that can divert traffic. The potential for infrastructure of the future is enormous.

I2: What motivates you to see change in this area?

Kanter: I got motivated by the magnitude of the problems and how many business leaders felt that it was getting worse rather than better. I got motivated by the exciting future opportunities with new business models, new public-private partnerships, and new ways for people to invest. I also have gotten motivated around new technology to reinvent how we move. That made me write the book and want to bring this to the attention of as many people as possible. We can’t just fix potholes, we need to reinvent infrastructure for the 21st Century.

I2: What’s the right balance of private and public investment?

Kanter: They work together. We spend a lot of time talking about either/or, and it really should be both/and. The public sector will always be important to set standards and ensure involvement in stakeholders in setting priorities. The public sector is still a major source of funds to take things to scale. We’re not going to privatize roads 20 miles at a time so that every 20 miles it’s a different operator charging you a different toll. That scenario is the extreme, but it could happen. And there aren’t enough private investors, and they don’t always make smart decisions. There is more private-sector interest in this sector, and I think with the right type of collaboration, then it can work very well.

Throughout history, we have had some things that started out private that then became public sector. The first subways were run privately, but then they became part of public authorities, because they could include regional bus systems and have the public interest in mind. But then when the public sector owns and runs things under public authority, they often use private operators to do the operations.

Increasingly, in new greenfield projects, we use private investors to put up some of the money, although they are still ultimately owned by the public sector. These are lease agreements, not outright privatization.

Privatization, where it’s turned over to private operators that own it and run it, hasn’t been popular in the United States. In some areas like airports, the FAA had a program where they wanted to privatize, but there were very few takers. There’s such a strong public interest, and there are public subsidies.

I2: Are subsidies an answer to accelerate adoption of some of these new approaches?

Kanter: These things are in the public interest, similar to public education. It’s good for the nation, so we have public subsidies. I know people often don’t like the word subsidies, but noone is paying the full cost of riding a subway, and to some extent a passenger train (although Amtrak in the Northeast is profitable if you break it out from all the other Amtrak operations). Flights aren’t subsidized, because passengers pay the cost, because airlines pay all kinds of taxes and fees for use of airports. Airlines pay for airport modernization, which means passengers are paying through ticket fees.

There are all kinds of combinations of ways to do things, and I think we have to be more sophisticated and nuanced and not make it either/or. We first funded the interstate highway system under the defense umbrella. It’s not the name of the act, but it was often referred to as the National Defense Interstate Highway System. We can’t use defense within our borders as a rationale any more. It should be opportunity for the future ,with an opportunity for a strong economy, access to jobs, prosperous citizens, and high quality of life. We need to switch our story.

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About Matt Ball

Matt Ball is a former editor and publisher of V1 Media.

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