Transportation infrastructure is ripe for change. For decades, contractors have been grappling with ever-increasing project delivery costs and the constant growth of overhead costs for bidding. As the obstacles and complications for contractors have mounted, the rate and quality of investment for public roadway infrastructure has declined. As a result, nearly half our nation’s roads need to be rebuilt from the ground up. Forty years of petitioning the government for more investment hasn’t worked, and we need to accept it’s not going to. The path forward for infrastructure funding is by leveraging next-generation services for advanced vehicles.
Over the last century, the evolution of roads has been driven by automobile traffic, from pavement to signals to interstates and more recently, ITS capabilities. Using digital infrastructure to enable next-generation mobility is a continuation of this trend. Commercial demand for services to enable connected, electric, and autonomous vehicles (CEAVs) will catalyze a massive reinvestment into the transportation infrastructure sector, closing the gap between what we need and what we have.
A DOWN PAYMENT
The Infrastructure Investment and Jobs Act needs to be treated as a down payment against future private investment to support next-generation mobility. These public funds can catalyze America’s ability to deliver innovative and lasting infrastructure improvements in the same way that DARPA privatizing the internet in 1995 created the dot-com boom of the late 90s that birthed Google, Amazon, and countless other notable companies.
With a target of 50% of electric vehicle sales share in the U.S. by 2030, congestion from ever-increasing population density of our cities, our economic reliance on internet and cellular services, and the demand for new digital infrastructure services for CEAVs, our nation’s infrastructure will transform into a “managed service platform” like an ISP, but built into the road itself. The in-road services platform will collect anonymous traffic data, provide vehicle-to-infrastructure and infrastructure-to-vehicle communications, wireless charging for electric vehicles, and navigation support for autonomy, among many more capabilities that will emerge over time.
CONTRACTORS’ SIGNIFICANT ROLE TO PLAY
The Eisenhower’s Federal-Aid Highway Act of 1956 that created the Interstate Highway System was one of the biggest public works projects in our nation’s history and foundational to America’s postwar economic development. It put millions of people to work in high-paying jobs while preparing our cities and states for the next generation of mobility, drove the adoption of current construction techniques, and reinvigorated our local economies.
Contractors built America and have a significant role to play in its next phase. Digital infrastructure services, also known as “smart roads”, are a modern example of how collaboration between public agencies, the construction industry, infrastructure investment funds, managed service providers, and emerging technologies can move transportation infrastructure into the 21st century.
Transforming roads into a digital network will help drive the development of our cities the same way as 100 years ago when we first started paving roads. By adopting advanced construction techniques, building roads that provide services, and taking equity in the assets they build, contractors can grow their revenue, add durable non-equipment assets to their balance sheets, and increase profits. These same advanced techniques will reduce overhead burdens and help mitigate labor shortages by improving the productivity of a contractor’s existing labor base, building more infrastructure at higher margins by using more automation and less manual labor.
DIGITAL INFRASTRUCTURE BENEFITS
Precast concrete is a proven technique that is better, faster, and costs less over its life than traditional in-place methods, but like countless modern construction technologies, precast is rarely used because of outdated procurement and bidding requirements that make the lowest up-front-cost the most important factor in winning a project. Despite higher initial costs, precast can be built in half the time with a fraction of the on-site labor. Trucks with precast arrive at a prepared roadbed and crews simply pick-and-place the prefab road segments, interlock them, level them, and grout them in place.
Because precast is produced in a factory using interchangeable parts, it can have the new technology services features built in. Traditional asphalt or cast-in-place methods would take too long to add tech during construction due to traffic demands and construction timelines.
Smart roads will rely on private financing, like cell and internet services do, because they make money from commercial services the smart road provides. Contractors can own equity in these assets to generate recurring revenue from each project like an investor in an ISP. Major builders have already adopted asset development and ownership models over the last 20 years to achieve similar results, like Kiewit’s Level 3 and Kiewit Development Company, Black & Veatch’s Diode, and JE Dunn’s Site 1001. Now digital infrastructure adds recurring revenue from CEAV services to the builder’s toolkit. These sources of recurring revenue will add up as contractors deliver more smart road projects, shifting overhead burden off of low-bid projects, which will allow contractors to be more competitive even when bidding traditional work.
CLOSING THOUGHT
Contractors paved the roads and strung the power lines at the turn of the century and built highways and interstates in the postwar period. These actions drove the adoption of the automobile and the industrialization that positioned America as the world’s dominant economy.
Contractors who are forward-thinking and adopt digital infrastructure will have larger revenues, greater profits, lower overhead, and recurring revenue streams that are unavailable from traditional methods.
The question isn’t why should we do it this way—it is what alternative do we have to deliver the next century of American progress?
About the Author:
Tim Sylvester is founder and CEO of digital infrastructure technology provider Integrated Roadways. For more, visit www.integratedroadways.com.
Modern Contractor Solutions, September 2022
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