Many years from now we will remember 2020 as the year the world faced a global pandemic – a health crisis of this type and magnitude, defined by the pathology, transmission, and novelty of the virus, had not been experienced in recent memory. The resulting impact of COVID-19 on human health and wellbeing has been swift and devastating, presenting serious challenges to health systems and calling for rapid response to contain the virus, protect vulnerable populations, and intensify a search for a vaccine and treatment.

We are now keenly aware of this threat, and to weaknesses in health systems and in societies more generally. In fact, the pandemic is a reminder of our own fragility, an uncomfortable thought perhaps, but risks to wellbeing may be difficult to foresee or control, and can have drastic impacts. Yet preparedness and resilience are a silver lining to this crisis: systems that are put in place that can respond to global threats or shocks, reduce their impact, or even resist them – can save people, property, and planet. Infrastructure systems, in particular, form the basis of building resilient societies, as due to their critical nature, services such as communications, healthcare, transportation, energy, and water and sanitation are relied on in times of crisis.

In this context, it is timely to assess infrastructure resilience in light of the impact of COVID-19. It is also important to look beyond the context of the current crisis – to how infrastructure can be made more resilient across multiple dimensions in the face of numerous threats and risks. These dimensions include the resilience of physical assets, operations, business models and governance, as well as financing. Furthermore, consideration needs to be given to infrastructure systems more generally, not just individual infrastructure assets or projects, taking into account broader factors such as the environment and climate and the role of technology. Given this, spatial/territorial dimensions need to also be taken into account, as not all regions and municipalities are affected by COVID-19 in the same way and their specificities will require targeted responses, including with respect to infrastructure.

Policy choices and decisive action to build resilience could become a defining moment in the recovery from COVID-19, and also to addressing other important risks in infrastructure systems. As many governments have included infrastructure spending as part of stimulus in response to the pandemic, resilience will be a key element to consider when planning and prioritising investment, especially in the context of technologies and innovations that could enable lower cost and digitally enabled solutions.

This note largely reproduces a concept note prepared for the G20, which represented an OECD contribution to the G20 Action Plan in Response to COVID-19, and considered lessons for the future in regard to infrastructure resilience. The concept note supported a commitment made by G20 Ministers and Central Bank Governors to “build on G20 infrastructure efforts to increase the resilience of infrastructure against risks, including from pandemics” (see G20 Action Plan Progress Report, under Pillar 5: Lessons for the Future).1

The original concept note built on previous work of the G20 Infrastructure Working Group, complementing other contributions during the 2020 Saudi Arabia G20 Presidency, notably from the GI Hub on fiscal stimulus and infrastructure, and from the IMF on fiscal risks and PPPs.. It also selectively drew on prior OECD work on resilience, and notes on COVID-19 and infrastructure prepared by the OECD and other international organisations such as the International Transport Forum.

Infrastructure investment decisions made now will affect how we respond to challenges such as climate change, building inclusive societies, and delivering strong, sustainable, and balanced growth. This note raises issues for consideration, in support of infrastructure investment through building longer-term resilience to future shocks, risks, and threats, and aligning investment with infrastructure that can be robust but also innovative and adaptable to changing circumstances and complexities. It provides recent observations in light of COVID-19, helping to foster resilience of infrastructure assets and systems and, by extension, flows (e.g. goods, people, data, energy, water) and communities.

With the pandemic as a backdrop, this note provides a high-level selected picture of resilience in infrastructure. An assessment of the critical infrastructure that is essential for the functioning of economies and societies can help with building infrastructure resilience plans, and understanding how infrastructure is interconnected and contributes more broadly to resilient communities. While this note is not exhaustive, several dimensions of infrastructure resilience are considered, overlaying a COVID-19 perspective, drawing on examples and observations in recent months where possible. Resilience must also be considered across the project life-cycle from planning and designing, to construction, operations, and decommissioning.

This note first provides context by presenting high-level observations on the impact of COVID-19 in infrastructure. It then outlines some key concepts and broader considerations on infrastructure resilience, followed by a section on how COVID-19 could impact infrastructure going forward.

COVID-19 has served to highlight the critical nature of many infrastructure systems and services, both for maintaining economic and social activity and enabling responses to unexpected threats and challenges – but also being a potential source of vulnerability. Yet not all impacts in infrastructure have been negative, some services have actually seen an increase in demand or positive effects, reflecting a wide variation and heterogeneous nature of infrastructure more generally, as well as the complexity of knock-on effects from major shocks. For example, construction or maintenance projects on roads may have advanced during confinement periods as less traffic on roads provided opportunity for construction crews to work unencumbered. Yet widespread disruption of supply chains, particularly in renewable energy construction projects (such as solar and wind) may have delayed progress (see also Box 1. regarding airports).

While the situation continues to evolve, some important high-level observations are provided below which will be considered throughout this note.

In the current crisis, the extent and quality of infrastructure related to health such as hospitals, water, and sanitation have proven to be important for the effectiveness of responses. Furthermore, there may be scope to consider where infrastructure can play a role more generally in support of healthcare value chains, for example through more efficient trade and transportation infrastructure to support delivery of essential goods. The importance of broader social and economic infrastructure, such as transport systems and communication infrastructure, was also demonstrated.

Notably, the crisis has brought renewed focus on social or “soft” infrastructure, which is sometimes overshadowed by hard infrastructure like energy and transportation in the context of resilience. These infrastructures that maintain the economic, health, education, cultural and social standards of a population are critical elements of modern societies. Hospitals were at the frontlines of impact and response to the pandemic yet are part of healthcare systems that only function well when all aspects are resilient. Preparation and response to the crisis was demonstrated in a number of areas, including setting up temporary hospitals in some jurisdictions to handle the influx of patients, prioritising care, or even “telehealth” solutions where care and information can be administered remotely through telecommunication services.

Besides impact in healthcare, education was also widely impacted during the pandemic. Education services have demonstrated remarkable resilience and flexibility, having established strategies for education continuity, in extremely challenging conditions. While education has been disrupted, a number of creative solutions have been implemented to continue learning, with observations from many jurisdictions, particularly in the use of technologies for distance learning (OECD, 2020l).

Yet the ability and capacity of government response has been uneven across countries or among regions and municipalities within countries. The capacities of emerging and developing economies to invest in the health response have been limited, given tighter borrowing constraints as a result of the spill overs of the crisis. Critical support is needed in some parts of the world in order to bolster health response and limit the spread of the virus. Despite increased mobilisation after the 2014-2016 Ebola crisis, investment in pandemics preparedness and response has been insufficient. In light of the “global public good” nature of such spending, it is in countries’ own interest to spend more and better on infrastructure that supports pandemic preparedness in other countries, as controlling the spread of the virus everywhere can help to lower risks of resurgence (OECD, 2020j).

Within countries, COVID-19 affects the populations and economies of regions and cities differently, with the ability of subnational governments to respond also differing. In most countries, regional and local governments are tasked with critical aspects of healthcare, social services, economic development and public investment, putting them at the frontline of COVID-19 crisis management. Across OECD countries, subnational governments are responsible for nearly 60% of public investment, including investment in infrastructure. Ensuring that subnational governments have what they need to meet this (e.g. improved procurement or planning capabilities, needed fiscal transfers), and other responsibilities, can minimise generating or further entrenching disparities in regional resilience to shocks and crises (OECD, 2020k).

Due to the direct impact of COVID-19, as well as confinement measures, disruption has occurred in all sectors, linked to a number of reasons, including disruption in supply chains, the availability of workers for infrastructure projects (construction) and operations, delays and cancellations, demand shocks, as well as interruptions to investment processes and procurement (see Box 1 for an example on airports). Infrastructure projects relying on single-source supply chains may consider back-up or secondary sources of supplies, where possible, in the event of future interruptions.

While disruptions have eased as restrictions on movement have gradually been lifted, further disruptions could be possible in the event of changes to policies for confinement, travel, and containment. On the other hand, some services have seen an increase in demand, such as communication services. In this regard, spare capacities to handle increased demand for internet connectivity, or scaling up bandwidth has helped to prevent congestion (see Box 3).

The public and the private sector have responded with various support measures, working to ensure the continued delivery of essential infrastructure services. Some governments have developed targeted responses for non-health infrastructure, such as the provision of grants or payment waivers (such as rent) for airports or public transportation, to support operating expenses, debt servicing, and in some cases capital expenditures. Development Finance Institutions (DFIs) and International Finance Institutions (IFIs) have responded to the pandemic through various support measures for emerging and developing economies. The private sector shows varied responses, one example being internet service providers allowing bonus broadband data allowances for customers.

Some lessons may be emerging from the pandemic on what types of contractual models or investment frameworks were able to withstand volatilities in markets, including demand, and also how systems, assets and projects were able to manage risks or shocks. For instance actions taken to prevent the default of an infrastructure company, or flexibility under PPP arrangements in order to ensure continuity of services while maintaining guarantees, may have helped through periods of stress. In this regard, impacts can be mitigated with modest success through compensation clauses, using bridge financing, capital injections, renegotiation of key project parameters, and introduction of regulatory flexibility on performance indicators, among other measures. If the pandemic’s impacts are limited to the short or medium term, project credit risk and access to financing may not change substantially (WBG, 2020a).

In a few instances, force majeure clauses were invoked in infrastructure projects or services, which calls into question how such clauses should be interpreted or applied in the context of the pandemic. Additionally, force majeure clauses can vary significantly between projects, some being narrow in scope or specifying certain events, while others broadly cover any event beyond the control of contractual parties. Advisory services, for example through the Public-Private Infrastructure Advisory Facility and the World Bank Group, have been made available for technical assistance, where governments can request support for taking stock of COVID-19’s impact to PPP portfolios, including the need to understand the impact of declining revenues (including expected duration) in projects financed through PPP contracts, especially where guarantees are provided (WBG, 2020b). In the future, more consideration could be given to how losses are absorbed during crises, including the role of insurance or re-insurance.

Reliance on communication infrastructure (i.e. telecommunications, broadband services) has increased substantially, with operators experiencing as much as a 60 per cent increase in internet traffic compared to before the COVID-19 crisis (OECD, 2020g). Businesses have deployed digital solutions and channels to enable communications among staff and with customers. Governments and schools have as well. This has led businesses and public institutions to expand the availability of digital content or transform content into digital format. Yet not all can do so with equivalent flexibility or ease. Access to communications services has been uneven across regions, territories, and populations, depending on quality of connectivity services, network capabilities, and devices to access services (e.g. personal computers, tablets, smart phones).

The COVID-19 pandemic has triggered the deepest economic recession in nearly a century, threatening health, disrupting economic activity, and hurting well-being and jobs. Due to the direct effects of the pandemic and confinement measures, the latest OECD Economic Outlook reports a forecasted a drop in real GDP across G20 countries of 4.2 per cent in 2020. Widespread job losses are also a result of the crisis, particularly in service sectors; the impact on jobs has been ten times greater than during the global financial crisis of 2008-2009 (OECD, 2020e).

Investment in infrastructure resilience can avoid economic losses, the need for expensive repairs, as well as preserve lives and protect the environment. In low- and middle-income countries, disruptions or outages of power, transport, water, or communications cost firms and households approximately USD 390 billion annually (WBG, 2019).

While in many cases better resilience investment would imply higher upfront costs, a life-cycle approach to analysing the cost-benefit of investing in infrastructure resilience can help to clarify the benefits of higher upfront spending by recognising longer-term value, such as the avoidance of costly repairs. Effective planning for resilience could also reveal ways of spending better, not necessarily spending more. For instance, locating critical infrastructures away from flood zones can be a simple low-cost solution to improve resilience. Furthermore, spending more efficiently and effectively on infrastructure can significantly reduce waste and efficiency losses. Recent IMF research reveals an average country loses up to 30 per cent of the value of its public investment through inefficiencies in its public investment processes, and that almost half of these losses can be made up for through stronger infrastructure governance (IMF, 2020) —that is the institutions and frameworks to plan, allocate, and implement public infrastructure (OECD, 2020m).

Effective planning could unlock opportunities to improve resilience, while providing options for governments and investors to improve asset life-span and value. Prioritisation of resilience investment could be considered, in order to allow capital and resources to flow to areas most in need.

Infrastructure systems are complex and interlinked – when disasters strike or threats manifest, an outage in power, for instance, can cripple transportation networks and healthcare systems. Severe water shortages in Cape Town, South Africa in 2017 led to extensive economic, health, and safety impacts. Even seemingly small events can have cascading effects in infrastructure due to interdependencies. In 2003, what should have been a small manageable power-grid failure in Ohio, United States, cascaded – due to a software bug – across the north-eastern United States and Canada, eventually affecting 55 million people (OECD, 2019a).

The concept of resilience is strongly linked to risk management frameworks as it is implied that something that is not resilient is somehow exposed to disruption, failure, or inadequacy. Resilience refers to the capacity of systems to absorb a disturbance, recover from disruptions and adapt to changing conditions while retaining essentially the same function as prior to the disruptive shock at an acceptable service level (OECD, 2020m). Time horizon also matters for infrastructure resilience, as the probability of a hazard occurring increases with the length of time considered. A key consideration is that resilience planning and risk management is a process throughout the life-cycle of infrastructure, both at the asset- and system-level (OECD, 2019a).

The following section provides an overview of key elements to consider when describing resilience in infrastructure, which applies to both “normal” usage of the infrastructure facilities which need to be resilient to time, usage, obsolescence, environmental effects, as well as “abnormal” shocks or disruptions, including natural hazards, pandemics, and other human-induced threats such as terrorism, cyber-attacks, or industrial accidents. The system-wide impacts caused by COVID-19 and the key role played by infrastructure in sustaining economic and social activity have heightened the need to consider infrastructure resilience at a broader level.

When considering resilience, the physical aspects of infrastructure are probably what first come to mind. Infrastructure comprises a significant amount of the built environment, forming the backbone of our modern societies.

Infrastructure is exposed to natural hazards such as extreme weather events, earthquakes, tsunami, fire, subsidence, and slow onset events (e.g. rising sea levels) as well as to the effects of time and use, including deterioration and obsolescence. Infrastructure that is well-located, robust enough to withstand fluctuations in demand or physical stresses, and meets demands for maintenance and modernisation can be broadly supportive of resilience. Infrastructure that operates beyond its capacity may be subject to additional strains, which could exacerbate weaknesses or accelerate deterioration. Redundancy, particularly in the design and construction of networks and systems (e.g. spare capacity in telecommunications networks, ability to re-route traffic or throughput, back-up systems), can increase dependability of key infrastructure assets by reinforcing critical elements. For instance, redundancy in electricity grids could help to avoid blackouts. Redundancy in networks is also valid for social infrastructure, such as in hospitals and healthcare networks, as ensuring the failure of one node does not imply overflow or contagion to other nodes, critically injuring the whole network.

Assuring that infrastructure can maintain services through periods of stress, including access to labour (while ensuring safety of workers), supply chains, and capital such as working capital facilities or reserves, is essential. Project contingencies, as a way to build-in uncertainties or risk exposures in projects, may also provide flexibility for project managers through periods of stress. This includes across the project life-cycle. Business continuity plans, as a means to map operations and streamline response and effective decision making, are a useful tool to assess vulnerabilities and mitigate risks of disruptions. The pandemic has caused greater scrutiny of supply chains, and how to manage access to essential goods and other critical inputs when interruptions occur. This can include identifying alternatives or back-ups for critical supplies and maintaining access to infrastructure markets and expertise through contractors that can effectively deliver infrastructure with value-for-money. Infrastructure operating in regulated markets (i.e. regulated pricing) may also face limited abilities to react to market stresses.

Considerable data may be generated through infrastructure operations and delivery, some of which may be sensitive. As infrastructure becomes more connected and complex, and as a result more exposed to digital threats, including cyber-attacks, enhanced measures may be needed to mitigate such risks, particularly regarding data security, privacy, and integrity of communications networks. There is also evidence that the COVID-19 crisis has increased opportunities for cyber-criminals to exploit weaknesses and fears, as more people shift to online activities for work or leisure (OECD, 2020c). Vigilance against cyber-attacks requires constant monitoring and secure data storage, as technologies and tools change and cyber-threats become more sophisticated.

Protocols and standards for safety ensure the protection of users of infrastructure as well as workers, preventing accidents and injury.

Strong governance frameworks are at the heart of resilient infrastructure investment models and are needed to help build social acceptance, transparency and trust in infrastructure (OECD, 2019). A clear sense of risk allocation and responsibility are needed, particularly if infrastructure is financed through PPPs or other public-private models. Strong resilience or business continuity plans, at the national and sub-national government levels and amongst project sponsors and service operators, can reduce the risks and impact of disruption, or speed recovery. Such plans can also support emergency management and effective decision making when something goes wrong. Models for trusted information-sharing and transparent and sustainable resilience cost-sharing arrangements would need to be defined, with a potential role for governments and regulators. Given that infrastructure investment often occurs over long asset lifespans, investment frameworks that integrate the full investment cycle and can adapt to changing circumstances in a fair, transparent, and mutually beneficial way provide one tool to address large, unexpected, system-wide shocks while also supporting investment.

Governance and resilience can also be considered at the asset- or system-wide levels. The OECD report Good Governance for Critical Infrastructure Resilience notes a progressive shift of critical infrastructure policies from asset protection to system resilience - rather than focusing on asset protection alone, a system approach allows governments and infrastructure operators to address asset interdependencies and prioritise resilience measures for critical hubs and nodes whose failure would cause the most damage. Such a systemic approach to infrastructure resilience could build on the OECD Policy Toolkit on the Governance of Critical Infrastructure Resilience (OECD, 2019a).

Investors during the dialogue events for the G20/OECD Collaboration Report stressed the need to promote financial resilience. COVID-19 has demonstrated the fragility of some financing structures, particularly where high leverage has meant that projects are not resilient to shocks. Access to adequate liquidity and strong balance sheets are some features that helped companies through recent market volatility. Furthermore, the relevance of existing financing models and instruments can be considered in terms of how infrastructure services can rapidly be scaled up in time of need.

In project finance, project companies are typically financed through a special purpose vehicle (SPV), where lenders have limited or no recourse to sponsors if a project is underperforming. Financial covenants (e.g. borrowing restrictions, financial ratios) can strengthen the overall financial viability of a project, and if effectively structured, can indicate early signs that a project is not performing as planned.

The way that infrastructure is funded can also affect financial resilience. Besides an observed drop in revenues generated by users of infrastructure (in public transportation, for instance, where usage dropped dramatically during confinement periods), tax revenues, such as through local sales tax that fund infrastructure, may also have declined significantly, augmenting financial distress. Behind this is the fiscal health of subnational authorities. Most will see their situation worsen in 2021 and even 2022, regardless of the degree of national recovery. Without sufficient compensation for the extra spending and the revenue losses caused by COVID-19, many subnational governments could be forced to sharply cut operational and capital spending (OECD, 2020k). Attention will need to be paid not only to ensuring that subnational fiscal health recovers but that subnational fiscal and financial frameworks are more resilient in the future.

Infrastructure services like healthcare, transportation, water, energy, and communications are essential in nature, for the functioning of economies and the activities of households, including in times of stress when they may be relied on more heavily. The loss of access to infrastructure functions and services could thus prove detrimental to households and businesses; consequently, avoiding loss of service or accessibility, even if a customer cannot pay (if the circumstances are exceptional), or if the operator becomes insolvent, may require contingency plans or temporary modifications to customer agreements. Indeed, public expectations may be high as to the “public service” role of infrastructure in times of crisis. This may require a coordinated approach between industry and national or subnational governments.

Vulnerable populations may also be more exposed to certain risks implying a people-centric approach to understanding resilience of infrastructure services. In developing countries, equitable access to reliable services, like electricity, transport, and water, can have significant positive effects on social and economic outcomes, particularly related to labour force participation and per capita income. It is often assumed that women will automatically benefit from new infrastructure projects in the same way as men do, without acknowledging possible distinct impacts on women and men according to their needs and social roles. Women are often more important users of and contributors to social infrastructure such as education, health, childcare centres, and other social services (OECD, 2019c). Reliable access to services can have a stronger impact than access alone. In India, for example, women’s employment increases by 12 per cent with access to electricity and grows by 31 per cent with reliable access to electricity (WBG, 2019).

Management of resilience risks is a continuous process in increasingly complex infrastructure systems. It is a cradle-to-grave process for engineering, building, and operating a fault-tolerant, safe, secure, smart, efficient, and sustainable infrastructure system (Volpe, 2013). Resilience is a risk-based and lifecycle process for addressing the vulnerabilities of critical infrastructure systems, making the system work smarter and better able to adapt and react to known risks and unexpected challenges (Volpe, 2013).

Understanding how infrastructure is interconnected and interdependent can shed light on critical elements (OECD, 2019a). Responsive infrastructure is agile, flexible, scalable, and can react to or mitigate crises as well as be adaptable to the evolving nature of risks, especially in a climate change context. Regarding healthcare, the ability to scale services to meet extraordinary demand has been a feature of effective responses during the pandemic (OECD, 2020a). Innovative solutions, like telehealth, or at-home hospitalisation, are also examples of responsive infrastructure. Flexibility and scalability were also demonstrated in instances where demand declined, maintaining the need to cover fixed costs while reducing variable costs. In public transportation, passenger numbers in cities around the world were down 70 to 90 per cent during the height of the pandemic (WBG, 2020c). Cities and municipalities have responded by adjusting service schedules, operating hours, routes, and service frequency to maintain an adequate level service while minimising overcrowding.

Figure 2 provides a high-level overview of resilience as a process. Such processes include measures put in place to anticipate and prevent risks, monitor performance, and mitigate the effects of failures when something goes wrong, allowing rapid recovery.

A holistic picture of resilience in infrastructure, besides identifying key risks and concepts, needs to take into account other important considerations, such as the changing nature of risks, as well as cross cutting themes and trends.

Private sector investors mentioned the importance of megatrends during the dialogue for the G20/OECD Collaboration Report. Investors highlighted the need for investment frameworks to evolve in line with broader developments and trends, such as innovation and technology as well as climate change, consumer preferences, and ageing populations. For instance, in light of COVID-19, online shopping increased significantly, along with demand for logistics, which may have future implications for infrastructure particularly if consumer spending habits persist. The business case for expanding airport capacities has been impacted in the near-term, with uncertainties around how demand for air travel will recover in the future, given changing work patterns and consumer preference.

The transformation of the global economy to be environmentally sustainable and resilient includes decarbonising industry and transport, building smart energy systems and cities, and increasing access to affordable, clean energy, water, sanitation, and health services. The impacts of COVID-19 are likely to have a lasting effect – such shifts need to be considered when planning, building, and maintaining infrastructure. Proactive and anticipatory mind-sets or foresight more broadly can also help to prepare for uncertainties.

Critical risks, including those that could be considered as high-impact, low probability events present challenges to infrastructure resilience. It is also important to consider that events or risks that were previously thought as low-probability might actually become higher probability in the future – we recognise the possibility of increased exposure to novel viruses as our contact with nature is changing. Climate-related risks are projected to increase given current trajectories. Data from the National Centers for Environmental Information show that in the United States, billion-dollar (CPI-adjusted) disaster events have been increasing in frequency compared to previous decades (NOAA, 2020). Digital threats are constantly evolving and becoming more sophisticated. In order to fully comprehend such risks, and to help build resilience and preparedness, data, reliance on science, and experts may be needed to build a strong evidence base to identify exposures to risk, how risks are evolving, and find solutions. Long-term risks can also be difficult to quantify or analyse, heightening the need to augment tools, data, resources, and information for resilience decision making.

In the medium to longer-term, major expected threats – both slow onset and sudden in nature – are expected to be linked to environmental risks. Slow onset risks include inter alia natural hazards, pollution, rising temperatures, rising sea levels, biodiversity loss, as well as desertification. Aside from the physical aspects of these risks, transition risks could also affect infrastructure as decarbonisation of industry and economies could impact asset values. Significant research and literature exists on these effects, and the central role that infrastructure plays in mitigation and adaptation measures.

Natural sources of resilience could be considered in the broader context, such as forests and wetlands or other nature-based solutions that can help to absorb adverse effects, acting also as reservoirs of biodiversity (OECD, 2020h). Enhancing environmental health through better air quality, water and sanitation, waste management, along with efforts to safeguard biodiversity, will reduce the vulnerability of communities to pandemics (OECD, 2020f). A better understanding of the role of environmental health as a crucial component of overall health priorities will help to inform policy responses in the recovery from the current pandemic and preparedness for future shocks.

Infrastructure is part of the future that younger generations will inherit - investment decisions made now will have lasting impact and strongly influence development pathways. Modern civilisation that is in balance with nature, achieves objectives for sustainable growth and development, promotes resource efficiency, and that supports intergenerational equity and fairness can be supportive of resilient societies. This includes infrastructure that is resilient to numerous risks already mentioned, but that is also transparent, fair, and equitable for users and for those paying for services, either through taxes or otherwise. Building awareness about how crises impact various populations is needed, along with how to mitigate effects through the provision of supportive infrastructure services in order to support inclusiveness. The pandemic, for instance, has had differing economic effects on men and women, thus a gender perspective on resilience can support greater inclusiveness.

Social risks and tensions are simmering in many parts of the world, for example, disparities in wealth and prosperity persist between global cities, peri-urban and rural areas, contributing to social and political divides (OECD, 2019b). Infrastructure investment that unlocks opportunities for growth and development, particularly for disadvantaged populations, can be supportive of resilient societies. Infrastructure that is transformative, particularly by revitalising degraded or under-utilised urban spaces can support greater social inclusion. Avoiding overbuilding infrastructure is also important, in order to avoid waste and to not deprive basic resources that could be used for other purposes.

It is impossible to not include the subject of technology, innovation, and data when speaking about resilient infrastructure. Given the pace of change and the fact that technology is impacting nearly every facet of our lives, considerations are numerous in the context of infrastructure. There are two elements, for the purpose of this note, to highlight in this regard. First is the expected impact of various technologies on the infrastructure landscape itself. What we consider infrastructure is changing - one often thinks about the physical aspect of infrastructure, but increasingly this could also include digital layers that interact with physical infrastructure and enable service optimisation through e.g. enhanced data analytics and digital applications. New forms of infrastructure, such as communication networks, data storage, new forms of energy generation and storage, and electrified transport are changing the contours of infrastructure. Disruptive technologies and business models are impacting infrastructure markets. Second, technology solutions could be considered more broadly to meet resilience challenges (see Box 4. for examples). A number of use cases exist, for instance, new ways of modelling physical structures, harnessing big data to analyse infrastructure operations, or mobile apps for consumers.

The G20 Riyadh Infratech agenda, along with supporting reference notes from the GI Hub and World Bank Group provide further context on the potential benefits of technologies in infrastructure, including resilience aspects.

As a cross-cutting theme for all infrastructure sectors, technology will be an important tool for building long-term solutions to infrastructure challenges, including resilience. The education sector can be looked at as an example. The need for “smart infrastructure” became acutely more urgent during the confinement period. Most countries closed schools in order to keep the virus in control, transitioning to online education. In this sense using technology for increasing the accessibility of online education allowed learning to continue, while important challenges remain regarding access for all students and closing the “digital divide”. Smart infrastructure strategies in cities, allowing real-time analysis of data and decision-making can improve resilience, supporting flexible and adaptive solutions. This was demonstrated during confinement when physical spacing became a priority to limit the spread of COVID-19.

Important long-term trends in demographics, e.g. aging populations in some countries, urbanisation, and migration will affect demand for infrastructure services, along with informing policy responses, requiring an understanding of such trends when planning and conceiving infrastructure. In Western Europe, 1 in 5 people are older than 65 and this is expected to rise to 1 in 4 in the next decade (UN, 2019). In 2018, an estimated 55.3 per cent of the world’s population lived in urban settlements. By 2030, urban areas are projected to house 60 per cent of people globally (UN, 2018).

COVID-19 affected territories differently, but many policy responses were place-blind and uniform, highlighting the need for place-based and people-centred approaches (OECD, 2020b). Furthermore, the health crisis turned into a major economic and social shock, and the exposure and recovery of regions and municipalities depends on industrial composition, labour market breakdown and trade openness. The crisis also exposed inequality across people and places, especially in large cities, where vulnerable groups such as migrants, the poor, women and the elderly were hit hard.

Consumer preferences, work habits, and spending habits are another large driver of demand for infrastructure services. Increased consumer demand, for instance for electric vehicles, will spur demand for public electric charging infrastructure. Broad based investment in energy efficiency could impact long-term demand patterns in energy markets. Rideshare apps like Uber and Lyft have impacted urban transportation options. During the pandemic, a number of trends have emerged, due to confinement and limitations in movement, which could have longer-term implications in infrastructure (see further section for greater detail).

COVID-19 could have lasting impact in infrastructure, both by accelerating trends that were already underway, and by leaving an imprint in societies more generally. As measures continue in order to contain and limit the spread of the virus, new habits and protocols might become the norm, for instance related to sanitary standards, or digitalisation of services. Innovative and proactive responses to resilience challenges are needed, in order to overcome the current crisis, and to prepare for future ones. This last section will consider some of the more long-term implications of COVID-19 in infrastructure, drawing together the elements of resilience for what could become a new infrastructure landscape.

The crisis and governmental lock-downs on movement and activities have resulted in some major rapid shifts in behaviour and consequently demand for infrastructure services, with usage of communication infrastructure for both work and leisure expanding significantly (see Figure 3). While trends related to demand for data storage, cloud services, connectivity, and quality (higher speed data such as 5G) were already increasing before the pandemic, an increased focus has resulted, with shifts in demand that could well become permanent (such as the rapid growth of e-commerce, videoconferencing). Demand for cloud computing and services, in particular, accelerated significantly during the pandemic, with implications as well for the public sector. The pandemic sparked public sector innovation in the form of small pilots and large-scale transformations – though they were the result of an emergency, many of these ideas have the potential to effect lasting change in public sector services far beyond the crisis (WEF, 2020).

Further investment in broadband infrastructure and expansion of 5G, particularly in underserved areas, could be an outcome of the pandemic and enhance future resilience. This will mean that the resilience of communication infrastructure, and related applications and distribution of content, will become increasingly important. Accelerating a transition from copper to fibre networks can address congestion issues and improve service for households and businesses. While transitioning from copper to fibre takes longer-term planning, broadband providers could be encouraged in the medium term to deploy fibre deeper into their networks to gradually phase out older technologies. A currently ongoing review of the 2004 Recommendation of the OECD Council on Broadband Development addresses these aspects.

Further enhancing communication infrastructure, such as through datacentres, will also be needed to support demand for digital services, particularly related to cloud-based applications. Policies to address the “digital divide” are also a product of the pandemic, where cities have, for instance, enacted policies for students to have access to broadband and devices.

Transportation in all sectors has been significantly impacted during the crisis. In airports, airline capacities dropped 70-80 per cent at the height of lockdowns and travel restrictions. Going forward, a reassessment of business models may be needed, as well as what measures are needed to make air travel safe and resilient to future pandemics. Touchless technologies in airports can save time by moving passengers through security checkpoints faster, and with less human contact to spread infection. The travel industry is looking further into using ultraviolet light to sanitise surfaces in busy airports. Regarding the airport business model, a pivot to non-passenger revenues could be a result in the near-term, such as through air freight.

Widespread telework may remain a permanent feature of the future working environment, catalysed by the experiences during the COVID-19 crisis, although the ability to telework is not open to all, especially for jobs that require physical presence. This is certainly a trend to closely watch for implications in infrastructure, as city transportation systems would need to adapt to shifting commuting patterns. More people teleworking from home, or close to home in shared work environments may shift demand for more localised, rather than centralised infrastructure, closer to where people live rather than work. Structural changes in demand for air travel may also result as business travellers conduct meetings virtually.

In response to these trends, large scale and costly investment in public transportation (such as subways), or increasing airport capacity, may be re-evaluated given the changing context, while more flexible approaches, such as through bus rapid transit, could be considered, although a long-term perspective is needed to understand longer-term implications.

Mobility in cities emerging from confinement will be different from what it was before the lockdown. Cities have been proactive in encouraging transportation alternatives, particularly for short distances, such as cycling and e-mobility solutions like e-scooters or e-bicycles, which have increased during the pandemic – or could even persist – in the post-pandemic period, which would call for greater investment or enhancement of such infrastructures (OECD, 2020d). More than 150 cities had deployed emergency cycling and walking infrastructure within the first few months of the pandemic, with many hundreds more planning to do so as confinement was eased (OECD, 2020b).

Furthermore, in the near term, cities will need to evaluate space in the urban context to allow for physically-spaced walking, cycling, and public transportation. The availability of spatial data in densely populated or high traffic areas has allowed decision makers to make quick and accurate decisions about necessary confinement and control measures to limit the spread of COVID-19. But these measures may also have longer-term implications as cities reallocate urban space to other forms of use, for instance more dedicated travel lanes for “light active mobility” (i.e. walking, cycling, scooters) (OECD, 2020i). As an example, in the United Kingdom, the government announced a GBP 2 billion package to finance transportation alternatives, such as walking and cycling, to alleviate crowded public transportation, also citing the increased interest in such forms of mobility during the pandemic (UK, 2020).

While some parts of the energy value chain have been more directly impacted by the pandemic (fossil fuels in particular due to a sudden drop in demand), use patterns in energy, particularly electricity, shifted significantly, along with volatilities in demand as commercial and industrial activities became suspended, and people stayed home during confinement. Having a reliable power supply is currently ever more important to keep healthcare services and food supplies uninterrupted, while expanding access to clean and affordable energy is a top priority and an essential element of resilience. Issues related to energy may be complex, yet some important areas related to resilience may emerge such as energy efficiency, resilience of smart, renewable and decentralised power solutions.

According to the International Energy Agency, energy investment is set to fall by one-fifth in 2020, partly stemming from declines in revenues due to lower energy demand and prices, as well as more uncertain expectations for these factors in the years ahead. Across all major regions, the power mix has shifted towards renewables following lockdown measures due to depressed electricity demand, low operating costs and priority access to the grid through regulations (IEA, 2020a). Putting clean energy transitions at the centre of economic recovery and stimulus plans is an opportunity to meet clean energy investment objectives.

Improving electricity security – and by extension resilience – could become a focus in the recovery phase from the pandemic. Multiple transitions are occurring in the electricity sector, which are leading to a new system in the future; encompassing electricity security brings together actions taken at the technical, economic and political levels, with the goal of maximising the degree of short- and long-term security in a context that simultaneously comprises energy transitions, cyberthreats and climate impacts (IEA, 2020b).

What may be necessary as infrastructure systems evolve are investment frameworks that are equipped to react and respond to resilience challenges. A key policy consideration may be that enhanced open collaboration, partnership, and dialogue is needed between public and private stakeholders, in preparation for, and in response to, critical risks. Strengthening critical infrastructure resilience requires trust between government and operators by securing risk-related information-sharing, and building partnerships to agree on a common vision and achievable resilience objectives (OECD, 2020m). Also, there may be scope for examining issues regarding risk allocation and risk sharing between the public and private sectors in light of COVID-19 experiences, and in light of the need to attract long-term investment post-COVID-19. A top-down and bottom-up process could effectively mobilise central governments, local governments, private sector stakeholders such as investors and operators, involving also civil society. The private sector, for instance, could bring innovative solutions allowing the development of service provision that can be more flexible in the type and quality of services provided. Identifying – and prioritising – resilience investment could help capital and resources flow to where it is needed most, underscoring the need for shared vision of resilience goals.

We are at a point in emerging from the COVID-19 crisis to reassess infrastructure resilience and to also consider the possibilities of how infrastructure can contribute more generally to resilience and preparedness for crisis. There is an opportunity for infrastructure systems to emerge from the crisis stronger, with a focus on “returning to better” through regenerative responses. What is evident is that the cost of crisis can be much higher than the incremental cost implied to invest in resilience. Building resilience is an investment to increase asset life and enhance long-term value.

Resilience needs to also be considered at multiple levels, across the project life-cycle, including aspects such as physical, operational, financial, and governance, while taking into account broader considerations such as shifting demographics or technological change. COVID-19 has highlighted vulnerabilities in infrastructure, particularly as healthcare infrastructure, such as hospitals, has tended to be overlooked as part of critical infrastructure systems.

COVID-19 has also accelerated or amplified trends that were already underway, particularly related to demand for communications infrastructure, digital services, and transportation alternatives. Innovative and proactive responses to resilience challenges are needed, in order to overcome the current crisis, and to prepare for future ones, drawing together the elements of resilience for what could become a new infrastructure landscape. In this way, infrastructure emerges as improved by the shock and better able to withstand future challenges.

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Contacts

André Laboul (✉andre.laboul@oecd.org)

Timothy Bishop (✉timothy.bishop@oecd.org)

Joel Paula (✉joel.paula@oecd.org)

Note

← 1. This note largely reproduces a concept note developed for the G20 at the request of the G20 Infrastructure Working Group and Saudi Arabia Presidency of the G20. Earlier in its development, a progress note was released for the meeting of G20 Finance Ministers and Central Bank Governors on 14 October 2020. The concept note was subsequently finalised as a contribution to the G20 Action Plan in Response to COVID-19, under Pillar 5: Lessons for the Future. Throughout its development this note benefited from comments and inputs from the G20 Infrastructure Working Group, G20/OECD Task Force on Long-term Investment, and from a number of OECD Directorates.

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