Between the Poles

Low carbon climate-resilient infrastructure requires private funding

A Report by the Global Commission on the Economy and Climate has recommended that since more than 60% of the world’s greenhouse gas (GHG) emissions are sourced from the world's existing stock of infrastructure, ensuring infrastructure is built to deliver sustainability is the only way to meet the COP21 goal  of keeping warming below 2°C and to guarantee long-term, inclusive and resilient growth. Infrastructure underpins core economic activity and is an essential foundation for achieving inclusive sustainable growth.  Investing in sustainable infrastructure is key for reigniting global growth and reducing climate risk.

The Global Commission is chaired by former President of Mexico Felipe Calderón and co-chaired by the climate economist Lord Nicholas Stern.

The report estimates that $90 trillion in sustainable infrastructure investment will be required over the next 15 years.  It stresses that this will require a shift in the world's construction and financial sectors to ensure that this money, which will be increasingly private, is spent on low-carbon, energy-efficient projects. 

Change in infrastructure spending required for a 2°C scenario (percentage change in expenditure over 2015-2030 compared to Business-as-usual)

The report has adopted a broad definition of infrastructure which includes both traditional types of infrastructure; energy, public transport, buildings, water supply, and sanitation and also natural infrastructure; forest landscapes, wetlands and watershed protection.  Infrastructure underpins core economic activity and is an essential foundation for achieving inclusive sustainable growth. It is indispensable for development and poverty elimination, as it enhances access to basic services, education and work opportunities, and can boost human capital and quality of life.

Investment is needed to replace ageing infrastructure in advanced economies and to accommodate higher growth and structural change in emerging market and developing countries. This will require a significant increase globally, from the estimated US$3.4 trillion per year currently invested in infrastructure to about US$6 trillion per year. The Global Commission found that it does not need to cost much more to ensure that this new infrastructure is compatible with climate goals, and the additional up-front costs can be fully offset by efficiency gains and fuel savings over the infrastructure lifecycle.

Importance of private infrastructure financing

Transforming the financial system and its intermediaries is essential to scaling up sustainable infrastructure finance.  Public finance and investment will continue to play a critical role, particularly in low-income countries.  But large amounts of private capital are needed and this will only flow if the right market signals are present within the financial system. The report suggests that reforms are needed in the financial regulatory system as well as other policy reforms, specifically, to price carbon to level the playing field between sustainable and unsustainable options in order to encourage private investment in sustainable infrastructure.

Private investment requires financial returns.  Efficiency in construction and operation and maintenance of infrastructure is essential. Increasing productivity drives technological innovation. Many governments as well as private sector engineering and construction firms have identified building information modeling (BIM) as a key foundation for increasing construction productivity.  Owners are beginning to recognize the benefits of full lifecycle BIM especially when augmented by geospatial technology.

Energy

The report estimates that energy infrastructure will require investment of US$25 trillion, or nearly a third of total core infrastructure investment over the coming 15 years. In addition energy efficiency will require investment of about the same magnitude.  Building sustainable energy infrastructure encourages economic growth, reduces air pollution and greenhouse gas emissions, and plays a key role in building resilience.

Energy efficiency

The report found that energy efficiency is a highly cost-effective way to manage demand and reduce the investment requirements for overall energy supply. Increasing energy efficiency in industry, buildings and transport could achieve up to half of the emission reductions needed globally to peak greenhouse gas emissions by 2020 according to the IEA.  Energy efficiency investments in IEA member countries since 1990 have avoided US$5.7 trillion of energy expenditure.  The IEA estimates further investments could boost global GDP by US$18 trillion by 2035, increasing growth by as much as 1.1% per year.  Energy efficiency measures are estimated to create up to three times as many jobs as fossil fuel supply investments per dollar of investment.

A key recommendation of the Global Commission’s 2015 report was to scale up commitments by development banks working with governments and the private sector to invest at least US$1 trillion per year by 2030 in clean energy, including energy efficiency.

Air pollution

Outdoor air pollution, much of which is associated with fossil fuels, is linked to nearly 4 million premature deaths per year. In China, it is estimated that air pollution killed around 1.6 million people in China in 2013. In India, the air pollution toll in 2013 stood at 1.4 million deaths.  In Europe, coal plant emissions account for more than 18,200 premature deaths, about 8,500 new cases of chronic bronchitis, and over 4 million lost working days each year.  Analysis for the Global Commission shows that the health and mortality burden of air pollution amounts to as much as 4% or more of GDP in some countries. Recent analysis by the OECD has found that globally air pollution-related healthcare costs alone are projected to increase from US$21 billion in 2015 to US$176 billion in 2060.

Cities

It is estimated that by 2050, two-thirds of the global population will live in cities, and over 70% of the global demand for infrastructure over the next 15 years is expected to be in urban areas.  How cities develop is important both for growth and for climate change.  The report emphasizes that investment in sustainable infrastructure is essential to make cities inclusive, safe, and resilient.

Global Commission

The global commission is supported by governmental and private sector leaders: Sharan Burrow, General Secretary, International Trade Union Confederation (ITUC), Australia; Suma Chakrabarti, President, European Bank for Reconstruction and Development (EBRD); Helen Clark, Administrator, UN Development Programme (UNDP); Former Prime Minister of New Zealand; Jamshyd Godrej Chairman and Managing Director, Godrej & Boyce Mfg Co. Ltd., India; Stuart Gulliver, Group Chief Executive, HSBC Holdings plc and Chairman of The Hongkong and Shanghai Banking Corporation Limited; Angel Gurría, Secretary-General, Organisation for Economic Co-operation and Development (OECD); Chad O. Holliday, Chairman, Shell, United States; and Sri Mulyani Indrawati, Finance Minister of Indonesia

Powering up the smart grid with geospatial technology

The electricity industry is undergoing a transformation. With utilities embracing geospatial technology and turning into data driven enterprises in the Smart Grid scenario, the sector is staring at an innovative future.

The National Academy of Engineering identifies the electric power grid as the first of 20 major engineering achievements that has had the greatest impact on the quality of life in the 20th Century. Modern society has reached a point where virtually every crucial economic and social function depends on the secure, reliable operation of electric power infrastructure.  But because it has become so crucial for modern life, it faces major challenges.
   
The major drivers for the fundamental change underway in the electric power industry are increasing demand, universal access, decarbonizing electric power, reducing revenue losses, and grid reliability and resilience.  Some of the  technologies that are contributing to this transformation are intelligent devices integrated with a communications network, distributed renewable power generation especially wind and solar PV, net zero energy buildings, microgrids, and the new remote sensing technologies of subsurface utility engineering.  

For an industry not known historically for rapid change, many utilities are in the midst of transforming themselves into data driven enterprises. Recently IDC published its future predictions for the development of the electric power industry over the period 2015-2018.  For many in the industry these are quite startling and clearly reflect an industry that is rapidly evolving.

The technology roadmap for the smart grid involves the deployment of increasing numbers of intelligent electronic devices for sensing and for control.  The challenge is federating the data from all of these devices, extracting information from it, and dispatching the information to the right control devices. 
 
With the changes that the electric power industry is undergoing now, analysts see geospatial technology poised to become a foundation technology for the smart grid.  The role of utility GIS is expected to touch every aspect of a utilities business, affecting customers, operations and management because geospatial is the logical technology that can provide  the basis for integrating data from intelligent electronic devices such as smart meters and the  information silos associated with proprietary applications.

You can read more about smart grid and relevance of geospatial data and technology, real-time big spatial data, standards for interoperability, the importance of data quality, open source geospatial technology,  spatial analytics and other aspects of the role of geospatial technology in the smart grid in Geospatial World.

Geospatial contributes $21 billion to the Canadian GDP

Prashant Shukle, Director General of Canada Centre for Mapping and Earth Observation (CCMEO) at Natural Resources Canada, invited the Canadian geospatial community to a pre-release discussion of the just released Canadian Geomatics Environmental Scan and Economic Value Study of the contribution of the geospatial sector to the Canadian economy.  The Canadian study was conducted by Hickling Arthurs Low Corporation with partners ACIL Allen Consulting, Fujitsu Canada and ConsultingWhere.  According to Prashant

"For the first time, we have quantified not only the contributions of Canada’s geomatics sector to the economy in terms of GDP and employment, but we have captured the significant economic and non-economic benefits to Canada’s economy, society and environment that the adoption and use of geospatial information (GI) makes possible.

The productivity benefits that accompany the use of GI in a variety of applications are of particular significance, not only for innovation within Canada’s vertical industries, but for federal or provincial governments – who tend to have silos of geomatics expertise and have been slower to fully use and integrate GI into operations, planning and policy-making."

The study found that in 2013 the traditionally defined Canadian geospatial industry (2,450 private sector geomatics firms) generated revenue of $2.3 billion. This includes revenue generated by surveying, geodesy and positioning, mapping, remote sensing, geospatial data management, geospatial consulting, and mass market geospatial.

The total contribution of geospatial to the Canadian GDP through productivity improvement was estimated at $20.7 billion or 1.1% of the Canadian GDP in 2013.  The sectors most impacted by productivity improvements resulting from the application of geospatial data and technology are

• mining, quarrying, oil and gas extraction (4.54%)
• transportation and warehousing (1.64%)
• utilities (1.58%)
• public administration (1.51%)
• construction (1.23%)
• agriculture, forestry, fishing and hunting (1.22%)
• management of companies and enterprises (1.08%).

The study also estimated the impact of open geospatial data to the Canadian economy.  It found that open data contributed $ 695 million in productivity improvement to the GDP in 2013.   McKinsey Global Institute estimated that the value of all types of open data to the global economy was $3 trillion.

Several countries have done similar studies in the past. 

Australia

In 2008 a report prepared for the CRCSI & ANZLIC by ACIL Tasman estimated that the spatial information sector contributed between $6.4 billion and $12.6 billion to the Australian gross domestic product (GDP) or  between 0.6% and 1.2% of the Australian GDP in in 2006-2007.  Secondly, it was estimated that restrictions on access to spatial data reduced productivity in some economic  sectors by between 5% and 15%. With open access to spatial data the Australian GDP could have been about 7% higher in 2006-2007.  Thirdly, it was estimated that with the right policies the contribution of the geospatial sector to the national economy in the medium term had the potential to be up to 50% higher than in 2006-2007.

New Zealand

In 2009 a study  sponsored by Land Information New Zealand (LINZ), the Department of Conservation (DOC) and the Ministry for Economic Development (MED) estimated that spatial information added at least $1.2 billion, or about 0.6% of GDP, to the New Zealand economy through productivity gains. ACIL Tasman conducted both the Australian and the New Zealand studies. 

Ireland

A study commissioned by Ordnance Survey Ireland (OSi) and carried out by Indecon International Economic Consultants estimates that the geospatial information industry directly contributed €69.3-million (Gross Added Value) to the Irish economy in 2012.  The estimated economic value of annual time savings through the use of geospatial information is € 279 million or about 0.6 % of the Irish GDP. 

United States

According to a report by the Boston Consulting Group (BCG) published in June 2012 the geospatial services industry in the United States generates annual revenues of $75 billion.  The BCG report estimates the economic impact of the geospatial services industry on government, business, and consumers is estimated to be $1.6 trillion in revenues (greater efficacy) and $1.4 trillion (about 8.7% of the U.S. GDP) in cost savings (greater efficiency).

World

In 2013 Google released a report What is the economic impact of Geo services ? prepared by Oxera Consulting Ltd. Global revenues from geospatial products and services as defined by Oxera was estimated to be $150-$270 billion per year.  The $270 billion estimate was computed by scaling up the BCG estimate for the United States to the world economy.  Sanjay Kumar quotes an estimate by JP Morgan that the professional geospatial market is worth $100 billion.

The Canadian value study (in which the descendant of ACIL Tasman participated) found that the impact of geospatial technology on the Canadian economy is already significant and that there are opportunities for increasing the contribution of geospatial to the economy.  Although revenue from the traditionally defined geospatial industry is projected to be flat,  the study concluded that there is major growth potential in integrated geospatial - integrating location services into vertical industries. 

Prashant emphasized that to enable the geospatial sector to grow, the geospatial community needs to act collaboratively.  A new organization GeoAlliance Canada is being established to encourage this to happen.  It was launched April 20 in Ottawa.  You can express interest in participating in GeoAlliance Canada here.

Increasing penetration of open source geospatial software in the global utility GIS market

Improving process efficiency (also here, here, here and here) is a major challenge for the utility industry.  Geospatial technology is a key technology that helps utilities improve the efficiency of their business processes (such as designing-constructing-maintaining and operating their network infrastructure) and the productivity of their staff.

An analysis a couple of years ago by Research and Markets entitled Global GIS market in the Utility industry 2012 - 2016  identified the key factors driving this market growth.  These  include  the growing need for knowledge infrastructure, data quality, managing the mobile workforce, and changing the organizational structure of utilities. .

A Navigant report identified a history of poor GIS data quality as a major problem in the utility industry and reported that poor GIS data quality is an area of significant concern for smart grid planners who plan to use GIS as a foundational data layer for interoperable grid operational processes.  I have blogged about the challenge of data quality in the utility industry on a number of occasions.

A major challenge for small to medium utilities is the increasing penetration of IT in the utility sector driven by the industry transformation associated with the smart grid.  Small to medium utilities often don't have the in-house IT skills or the budget to implement GIS and other applications required by the industry move to smart grid.

Research and Markets has just released a report that covers the present global utility GIS market and its projected growth prospects for the period 2014-2018. The report covers the Americas, and the EMEA and APAC regions. To estimate market size and vendor share, analysts lookd at revenue generated from sales of software, data, and services in several segments including traditional GIS, GPS, photogrammetry and remote sensing, geospatial engineering, and other GIS applications. 

The report was  prepared based on an in-depth market analysis with inputs from industry experts.   Vendors included in the study are Bentley Systems Inc., GE Energy, Hexagon AB, Autodesk Inc., AvisMap GIS Technologies, Beijing SuperMap Software Co. Ltd., China Information Technology, Esri Inc., Google Map, Hitachi Zosen Corp., MacDonald, Dettwiler and Associates Ltd., Pitney Bowes Inc. and the US Geological Survey.

The report forecasts that the global utility GIS market will grow at a CAGR of 9.27 % over the period 2014-2018 with improving process efficiency a key market driver.

A key market challenge for existing vendors is the increasing penetration of open-source geospatial software into the utility market.  According to the report many small and medium-sized organizations that cannot invest heavily in GIS solutions choose open-source software. 

The report also expects growing demand in the utility market for 3D GIS software.  The analysis foresees that 3D GIS software is expected to play a major role in the increased adoption of GIS solutions in the utility industry.   According to the report large vendors are developing 3D GIS software, which is expected to drive the growth of the Global GIS market in the Utility industry during the forecast period.

Australian Government sponsors report on the economic benefits of global positioning systems

The Australian Government has prepared reports on the economic benefits of global navigation satellite systems (GNSS) including specific sectors of the Australian economy.  The studies were conducted by ACIL Allen.  

To provide some context for this two countries, Australia and New Zealand, have commissioned studies to estimate the contribution of geospatial data and technology to the national economy.  In 2008 a report prepared for the CRCSI & ANZLIC by ACIL Tasman estimated that the spatial information sector contributed between $6.4 billion and $12.6 billion to the Australian gross domestic product (GDP).  That represents between 0.6% and 1.2% of the Australian GDP in in 2006-2007.  In 2009 a study  sponsored by Land Information New Zealand (LINZ), the Department of Conservation (DOC) and the Ministry for Economic Development (MED) estimated that spatial information added at least $1.2 billion, or about 0.6% of GDP, to the New Zealand economy through productivity gains.  Canada has announced the award of a similar project to a team that includes ACIL Tasman, who conducted the Australian and New Zealand studies.

Global Navigation Satellite Systems (GNSS) is the generic term for constellations of satellites that provide a signal that enables users to determine their position anywhere outdoors. The first GNSS system was the U.S. global positioining system or GPS.  Since then Russia, Europe and China have launched their own satellite systems GLONASS, Galileo and Beidou.

Augmented GNSS provide greater accuracy and reliability to end user by bringing in additional  external information.  These systems are composed of multiple ground stations, located at accurately-surveyed points. The ground stations take measurements of the signal from the GNSS satellites and estimate the errors which impact the signal received by the users.  This information is transmitted to end users by satellite or by terrestrial radio.

The report finds that  augmented GNSS services have delivered economic benefits to Australian industry through improvements in productivity and more efficient use of resources. It estimates that: in 2012 augmented GNSS added between $2.3 billion and A$3.7 billion to Australia’s real GDP through improved productivity. It also projected that in 2020 real GDP would be between $7.8 billion and $13.7 billion higher as a result of the ues of augmented GNSS.

The report found that the greatest economic impact from the use of augmented GNSS was found to be in the agricultural, mining, construction and surveying sectors. But the utilities and transport sectors also realised important economic benefits.

The greatest economic benefits in 2012 were derived from the use of augmented GNSS in surveying, machine guidance, automation of operations and asset mapping. The levels of accuracy required for these applications ranges between 2 cm and 10 cm.

Augmented GNSS and utilties

Augmented GNSS contributes significantly to the productivity and competitiveness of the utilities sector which in this study includes electricity, gas and water services. Utilities use augmented GNSS data with geographic information systems to construct, monitor and manage network assets, manage outages, maintain systems and forecast demand.  Augmented GNSS lowers development costs and invreases the efficient of asset management. Output from the utilities sector is estimated to have been between $50 million and $81 million higher as a result of the use of augmented GNSS in asset management and maintenance.

It is estimated that With increasing adoption of augmeneted GNSS in asset mapping and control systems, this could increase to between $173 million and $305 million by 2020. Further improvements in productivity are expected as the technology is adopted more widely across industry and as more innovative applications emerge.

3D is transforming the construction industry and helping to build a new world

Increasing urbanisation, pressure on existing infrastructure, push for productivity in construction sector and environmental concerns are driving the convergence of geospatial, 3D and information modeling technologies.

Over the next two decades, construction of buildings and infrastructure (electric power, water/wastewater, roads and highways, and ports and airports) will see a massive infusion of investment, motivated by environmental concerns and the need to accelerate economic development.  As governments are discovering that they have less and less money for capital infrastructure projects, a greater proportion of the investment in infrastructure will come from the private sector, which will drive increasing productivity to improve returns on investment. As with other industries facing a productivity challenge, this translates into an investment in technology. The accelerating adoption of 3D technologies includes 3D visualisation, 3D building information modelling (BIM), 3D GIS, 3D CAD, 3D reality capture such as laser scanning (LiDAR) and ground penetrating radar (GPR), 3D photogrammetry from satellites, aircraft and UAVs, and technologies that enable 3D measurement such as oblique imagery is transforming the construction industry in important areas.

In a just published article in Geospatial World I discuss how 3D data and technologies integrated with geospatial and other technologies are being applied to model buildings, infrastructure, and entire urban environments ranging from individual buildings to neighbourhoods to cities, how this is feasible using today’s technology, and how it is already transforming the construction industry.

ncreasing urbanisation, pressure on existing infrastructure, push for productivity in construction sector and environmental concerns are driving the convergence of geospatial and 3D technologies across businesses. - See more at: http://geospatialworld.net/Magazine/MArticleView.aspx?aid=30905&utm_content=buffer67319&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer#sthash.MsgzMTNR.dpuf

Electric power utilities experiencing increased employee turnover

I have blogged extensively over the past few years about some of the workforce challenges that utilities especially in the developed economies are facing.  These are often related to the aging workforce and in some countries to a shrinking workforce.

I have blogged about the shrinking workforce in countries around the world like Japan and Germany, where there have been declining populations.   The shrinking workforce is acting as a brake on the German economy.  Recently Germany liberalized its immigration laws and for the first time in a decade the population of Germany is actually increasing.

In the U.S. because of its policy of encouraging immigration, the shrinking workforce is not the result of population decline, but the result of a decreasing participation rate.   One explanation for the decline is the aging workforce. Boomers are retiring at an increasing rate.  This has created a serious problem for many utilities where it has been estimated that over half the work force will be eligible to retire in the next few years.  But there is another trend that tends to mitigate this, the percentage of older workers who remain on the job post-retirement is trending upwards.  For the age group 65 to 74 the proportion of workers still working is nearly twice what it was in the 1990s.  In the long term the problem remains, finding young workers to replace the older workers when they retire.

A recent report from PricewaterhouseCooper's (PwC) Human Resource Services practice based on data from 29 utilities representing nearly a quarter of a million employees identifies some very interesting  workforce trends, some new, in the power utility industry.

Increasing turnover

First of all the PwC research indicates that utilities are losing workers at an accelerating rate. The voluntary turnover rate increased by a full percentage point between 2010 and 2012, and for high performers and early tenured employees the rate of separation was especially high.  

The research also shows that the turnover of utility employees in their first year was significantly higher in 2012 than in 2011 pointing to a retention problem. As the economy continues to strengthen PwC anticipates that first-year turnover will continue to increase. This is a new experience for many utilities because in the past working for a utility was seen as a job for life.  With the new skill sets for smart grid and releated technologies requiring increasing IT skills, utilities are having to compete with other sectors for IT savvy workers.  PwC reports that other industries have been experiencing intense competition for workers for some time and are better equiped to attract and retain new talent.

Accelerating executive retirement

The PwC research also found that while the number of employees currently eligible or due to become eligible over the next 3-5 years for retirement appears to have stabilized, retirement eligibility rates for executives have continued to increase. From 2011 to 2012 there was a 50% jump in the number of executives currently eligible for retirement.

Perpetuating a culture that discourages innovation

PwC found that by forcing older employees either to delay retirement or to remain in place as contractors, the recession has helped perpetuate a conservative culture that has inhibited innovation in the industry.  Older, experienced workers are unlikely to push for changes when they have only a few more years until retirement and in a aheavily regulated industry there is little incentive for these workers to innovate because of the potential of creating risk for themselves and their employer.

Critical knowledge loss

There is also a tendency for older utilities workers to communicate information orally rather than documenting it in a database.  When these workers leave, critical knowledge leaves with them. This impacts productivity and creates risk for the utility, especially when they leave before replacements can be effectively on-boarded typically through a mentoring process.

Retention

Younger workers tend to be much more tech savvy.  This is critical for the electric power industry as it moves toward the smart grid.  As I have blogged about frequently, younger workers' expectations with respect to technology are also higher.  Sitting a younger worker who has been brought up on 3D technology down with a CAD application to create and print a 2D paper construction drawing risks losing him or her to more technically progressive utilities or to other industries.

Challenges

PwC suggests that there three key areas where there is potential for improvement:

1. Knowledge Retention & Succession Planning
2. Operations
3. Technology & Processes

Knowledge transfer

PwC recommend that utilities organizations need to adapt rapidly to these technology, resource and demographic trends.  In particular, they need to evolve an efficient and effective approach to succession planning and knowledge transfer.  PwC forecasts that the rate of process and technology change is likely to accelerate as smart grid adoption picks up.  It also projects that a culture of continous improvement will become more typical in the utility sector than it has been in the past.

Operations

Operational effectiveness is critical for utilities, but with a static or even decereasing workforce, productivity has to improve and continue to improve. This means the adoption of new technology.  PwC points out that an ageing workforce, deeply knowledgeable but prone to resist change, can significantly inhibit operational improvements unless these workers are fully integrated participants in the change effort.  In my experience older workers can be just as and even more enthusiastic about change if they can see that it simplifies  their work, eliminates tedious redundant and manual paper-based processes, and improves the quality of the final deliverable. 

Technology & Processes

Driven by goals of improving productivity and improving the quality of their decision making through data-driven analytics, utilities are recognizing the importance of understanding their core business processes and implementing standardized, streamlined IT systems for these processes.  PwC recommends that as a first step these processes need to be documented (before the knowledge about them walks out the door) to safeguard core institutional knowledge as part of change management practices.

Economic value of open data estimated at $3 trillion annually

Open data has been gathering momentum among governments ever since United States Federal Government data was placed in the public domain.  The principle of free and open access to government geospatial data has been adopted by many governments including US Federal, Canada, Japan, South Africa, Brazil, California state and counties, and by the City of Vancouver and other cities.  G8 leaders (Canada, France, Germany, Italy, Japan, Russia, United Kingdom, United States, and the European Union) recently signed a charter on open data.  But being able to access prepared maps and other derived material is just a first step, governments need to provide access to raw geospatial data in commonly used Web-friendly formats.  In May 2013, President Obama issued an Executive Order making open and machine readable the new default for federal government information in the United States. 

A major motivation for open data has been government transparency.  But there is also a strong belief that open data contributes to the economy.  I blogged earlier about a study by a team at Cambridge University commissioned by the Treasury that found that making all Ordnance Survey data (geospatial data)  free would cost the government £12m but bring a net gain of £156m.  Australia and New Zealand have commissioned studies of the contribution of spatial data to the national economy that have concluded that with appropriate government policies the contribution to the GDP, estimated to be on the order of 1%, could be doubled.

McKinsey Global Institute (MGI) have just published a study that seeks to quantify the value of open data by examining applications in seven fields of the global economy: education, transportation, consumer products, electricity, oil and gas, health care, and consumer finance.  Their research found that seven sectors alone would generate more than $3 trillion a year in additional value as a result of open data.

For each of the sectors they looked at, MGI identified ways that open data could create economic value and identified potential barriers to adoption.

Electricity sector

For example in the electricity sector, MGI identified five levers for using open data to improve efficiency across the electricity value chain:

1. improved generation investment
2. efficient generation operations
3. optimized investment in transmission and distribution
4. efficient transmission and distribution operations
5. optimized retail and consumption

By using publicly available data such as siting applications, resource planning documents, and regulatory filings, utilities can streamline the permitting process for new power projects.

ƒƒ By sharing benchmarking data about processes such as maintenance routines and equipment utilization, power companies can optimize the performance of generating operations.

Open data can help optimize investments in transmission and distribution.

Sharing data gathered via “smart grid” technologies can help identify efficiency opportunities in transmission and distribution operations.

Open data makes it possible to compare products and services so that residential and business users make better decisions about which appliances, equipment an electric service to use.

Electric power usage data combined with community-wide data can show customers how their energy use compares with neighbors and peer organizations.

MGI estimates that open data has the potential to add $340 billion to $580 billion of value annually across the electricity value chain.

Economic potential

MGI found that the benefits of open data has a large potential economic value including increased efficiency, new products and services, and a consumer surplus (cost savings, convenience, better products).  The concluded that it benefits consumers more than businesses, by creating price and product transparency as well as new channels to provide feedback that improves the quality of goods and services (including public ones).

But open data involves business risks, including the potential release of negative information; the potential consumer backlash from aggressive open-data use; and the inadvertent release of confidential information.

The barriers to wider use of open data include privacy issues and the need for legal and regulatory frameworks.  To address these issues MGI recommends that governments need to play a central role by developing and implementing policies to mitigate consumer and business concerns about the misuse of open data and to help set standards that will allow the potential economic and social benefits to materialize.

The convergence of geospatial and BIM is gathering steam

The August edition of Geospatial World Magazine is focussed on the theme of the integration of geopatial and building information modeling (BIM) in both its vertical and horizontal (BIM for Infrastructure) forms. Together the articles and interviews portray the convergence of these technologies and processes as gathering steam, driven by business drivers such as better outcomes, more environmentally friendly designs, and improved productivity.  I've extracted a few paragraphs to provide a feel for the breadth and depth of the coverage.

Editorial - Prof. Arup Dasgupta, Managing Editor, Geospatial Media

This academic year I was pleasantly surprised to find five students from the Masters of Construction Engineering and Management attending my core postgraduate course on Fundamentals of Geomatics. It is becoming increasingly clear that geomatics, geospatial to our readers, needs to collaborate with end users to achieve greater acceptability. We have seen that geospatial integrated with enterprise resources planning, business intelligence, building information modelling or design and engineering results in dramatic improvements in these systems.

Cover Story - Geoff Zeiss, Editor - Buildings and Energy, Geospatial Media

The adoption of BIM processes and technologies is a major trend that has been gathering steam over the last decade, motivated by the need for better outcomes. According to McGraw-Hill Construction, the overall adoption of BIM has increased from 17% in 2007 to 71% in 2012 in the US, registering a 45% growth over the last three years, or 400% growth over the last five years.  McGraw-Hill Construction estimates that the use of BIM for infrastructure is about three years behind the BIM use on vertical projects but predicts that adoption in the horizontal market will occur at a faster rate than the rate of adoption in the vertical market.

McKinsey singled out poor construction productivity as an important factor in eroding returns on infrastructure, making the sector less attractive for private investment.  Thus, the stage is set for a radical transformation of the construction industry with a focus on improving productivity. It is expected that investment in technology will be a key element of the strategy to ensure that our infrastructure is expanded and transformed.

In the construction world, 3D modelling and model-based design, which integrate BIM, GIS and survey, and laser-scanning (LiDAR) in a 3D visualisation environment, are increasingly being used to improve the design and build phases of the construction process.  ARCADIS Netherlands is a large engineering firm that has been involved in projects which integrate geospatial into the design process. The integrated approach simplified communication and increased the quality of the final design. It also enabled automated analysis of the consequences of design choices with the result that the planning cycle was shorter.

.Interview - Anne Kemp, Director - BIM Strategy and Development, Atkins United Kingdom

At a recent BIM for Infrastructure Conference at the Royal Geographical Society, we had David Henderson from the Ordnance Survey talking about smart cities, with some superb illustrations of the integration of geospatial and what people would regard as BIM data. The boundary between what is coming from which technology becomes rather incidental; it is much more about what questions you are asking of that data and what are the intended outcomes of the project. Geospatial people are realising that it is about managing and integrating all of infrastructure. And that is just core geography. Being able to analyse and blend that with what is coming from the CAD and BIM world will get really exciting. The goal of what that enables you to do is what is important, not the individual technologies.

There was a UK Government Construction Summit recently where an immersive technology Mission Room was demonstrated. That is an immersive space where you have visuals on all sides including photogrammetry data or video; and CAD or BIM models. It was such a visual way of being able to spatially locate and remember in your mind key assets within that space. What they are using was very much spatial data: survey and photogrammetry data, combined it with junction diagrams and CAD drawings which were put into real-world coordinate space for accurate display. I asked one of the people demonstrating Mission Room if this was GIS. He admitted that it was, but they didn’t call it GIS.

Interview - David Bartlett, Vice President Smarter Physical Infrastructure, IBM United States

Buildings last for many years and if significant improvements and cost savings are to be made, we should be looking for better ways to run these assets more efficiently. There are emerging IT solutions that can apply analytics to BIM models to drive down energy costs, improve building utilisation, optimise property portfolio management and maintenance, and reduce environmental impact.

There is a link between IT and smart buildings. IBM's background is IT and we deal with huge amounts of data. That is why IBM got into smart buildings in the first place. It got everyone in our company fired up because it is an opportunity to help communities, cities and governments to operate at lower cost more efficiently and improve the quality of life.

What IBM is talking about is a big IT play on top of those systems [energy systems, air handling systems, building management systems] which can not only connect multiple buildings but can also aggregate and look at what is happening at a city and at a state level.

Interview - Shannon McElvaney, Global Community Development Industry Manager and Geodesign Evangelist, ESRI United States

Technology today enables us to move beyond the separate process of planning, designing, construction, and maintenance. That continuum is called geodesign, and from the very early stages of a project, it enables the creation of an iterative and informed design.

When we consume BIM models we only extract what we need. On a large Middle East project, we got these huge BIM models, but we needed only the walls, the piling, the floors, and the roof. And from that we could do solar energy modelling for PV panels, energy performance modelling, transit accessibility, shadow casting, and much more. The developers needed to know proximity to stations, value of real estate, floor space, proximity to amenities, and they used this information to value the real estate and forecast their return on investment. The sustainability group needed to do the same, in order to calculate their GHG emissions, energy, water, and waste needs. BIM and GIS integration is essential to be able to do this.

Interview - Stephen Lawler, Chief Technology Officer, Microsoft Bing Maps United States

I think the user experience will take a huge leap forward and things will get more immersive with 3D. Companies like Microsoft, Google and others have been increasing imagery coverage through efforts like aerial or streetside. I think the move is towards 3D. The real-world basemap is moving to 3D to provide visually real and symbolic digital experiences, enrich the realworld view with augmented reality and enhance the underlying data and relations.

We will see a lot of augmented reality coming in different forms. You already have things like Google Glasses. The whole visual field of view will become enriched with relevant and personal data. Ultimately, the convergence of technology between the understanding of intent, new natural user interfaces, the location semantic organisation of data, a 3D model and ontology and adaptive 3D contextual rendering will set the stage for our future digital 3D world.

Interview - Andy Powell, UK Head of BIM, and Paul Trethewey, UK Rail BIM Manager, Parsons Brinckerhoff

[This interview didn't make press time for the paper edition.  You can find it here.]

BIM is disruptive in the sense that the introduction of Building Information Modelling (BIM) working methodology in many ways is not an evolutionary change but a fundamental change in the way we produce engineering design content.

Parsons Brinckerhoff is organised into business units that cater to different market sectors. Buildings, Civils & Structures, Power, Rail and Highways are the big units within our UK offices. BIM working practices and the associated digital tools that are utilised to achieve this output are relatively well proven within the building design sector. One reason for this is the self-contained nature of a vertical structure; geospatial constraints are usually defined and the entire building itself can be viewed as one asset. The design of linear assets such as highway or rail infrastructure presents some additional, albeit stimulating, challenges to take into consideration. These include questions on how one manages the geospatially correct digital representation of such a large geographic scope of design whilst ensuring existing IT infrastructure is not over-tasked.

Article - Terry Bennett, Senior Industry Programme Manager - Civil Infrastructure, Autodesk

Globally, the use of PPPs has led to increases in efficiency and certainty of delivery. In Australia, PPPs delivered projects at a price closer to the expected cost as compared with those procured through traditional mechanisms. In the UK, a treasury department study showed 89% of PPP projects were delivered on time or early. In Canada, PPPs led to efficiency gains of up to 61.2% over those done with conventional methods, according to a study by the Conference Board of Canada.

BIM for infrastructure is a geospatial- enabled model-centric process, which can transform the infrastructure and asset lifecycle by increasing productivity, improving efficiency, and lowering costs. 3D design and modelling tools enable planners, engineers and contractors to leverage existing GIS information, explore innovative designs and ‘whatif’ scenarios with project investors to test alternatives and simulate realworld performance, develop a better understanding of scheduling and cost (4D and 5D), assess environmental impacts, and provide the public with accurate visualisations of various stages of the project, all while keeping a geospatial context which in turn reduce risk and liability.

Article - Bart De Lathouwer, Director, Interoperability Programs, Europe, Open Geospatial Consortium Belgium

Access to and manipulation of diverse information is a vital tool for Architecture, Engineering and Construction (AEC) firms looking to compete globally. Firms may seek to deliver comprehensive Building Information Model (BIM) as part of their final product, or deliver building information services for years beyond the completion of a building. They may want to combine information from different sources in simulation, analysis, “clash” detection and visualisation. Unfortunately, it is often difficult to discover, assess, access, share and fuse information because these data reside in multiple systems.

We argue that smart building practices as well as smart buildings, smart cities and smart infrastructure advance more through cooperation among standards organisations than they ever could through the efforts of any single technology vendor or small group of technology vendors.

Advanced scenarios will become reality only as integrated standards platforms enable cities and citizens information systems to integrate information not only from GIS, BIM and civil engineering documents and services, but also from a wide variety of increasingly sophisticated — and increasingly connected — consumer products and services

UK investing £300 billion in infrastructure 2012-2015

I have blogged previously about the UK National Infrastructure Plan which plans to invest hundreds of billions of pounds in the next 10 yrs on infrastructure including high speed rail, energy, aviation, water and wastewater, roads and highways, and high speed broadband.  It is intended that up to 70% of the funding is to come from the private sector.  That means that the program has to provide attractive returns with relatively low risk to attract private capital.

At a Construct IT event at Network Rail in Manchester, Keith Waller from Infrastructure UK provided an update on where the National Infrastructure Plan is right now, some of the challenges, and what the Government is doing to address the challenges.

National Infrastructure Plan

The UK National Infrastructure Plan is designed to provide a long term vision and medium term planning across all sectors which are broken down as transport, energy, communications, waste, water, flood, and intellectual capital.  The total cost is estimated to be £300 billion across 500 projects for the period 2012 to 2015.  A critical objective objective is 2/3 of the total investment is be private capital.   Most UK infrastructure investment is already led by the private sector. For example, water, energy, and communicatons are almost entirely privately funded.  Transport is about 2/3 private and public/private partnerships.  Intellectual capital is mostly public.  Flood is mostly public/private partnerships.  To attract additonal private funds the government has guaranteed £ 40 billion in loans to date.  It is also developing a new approach to public private investment, referred to as PF2, tmake PPP more attractive to private companies.  It appears that the average annual investment in infrastructure had increased by over 10% in 2010-2012

Average annual public and private investment in infrastructure
2005-2010 £29 billion
2010-2012 £33 billion

The UK Government seems to be committed to making this plan happen.  It has identifeid 40 projects and programs that are of national significance and critical for growth.  It has set up a Cabinet Committee chaired by the Chief Secretary of the Treasury to improve poor coordination and planning and eliminate regulatory holds ups to ensure delivery.  A new commercial Secretary Lord Deighton with a reputation for getting things done has been tasked with delivery of the infrastructure plan.

Reducing the cost of infrastructure

A McKinsey study suggested that more private sector involvement in infrastructure projects could result in an estimated 30% improvement in construction productivity over 5-10 years, resulting from the combination of 5-15% reduction in the cost of design and planning, 5-10% in engineeering, 5-10% in materials purchase and sub-contracting, 3-5% in construction, and  3-5% from organizational enablers.  They estimate that this would translate into a 20% reduction in overall infrastructure spend.

McKinsey suggested that governments and infrastructure investors could reduce risks and increase returns by focussing on three areas,

mproving productivity of existing and new assets

For example, by tuning the regulatory and market structure to improve efficiency and expand capacity.

Making the economic model more attractive to investors

By being smarter about matching capacity expansions to demand and  finding additional sources of revenue.

Reducing cost and risk by improving project delivery

By allowing more competition, pushing more risk on to contractors, and encouraging engineering, procurement and construction (EPC) companies to increase their build capabilities.

UK Infrastructure Cost Review

A major Government focus is reducing the cost of infrastructure.  For example, in a series of public consultations it has asked why it is more expensive to develop infrastructure in the UK ?  The conclusion is that it is the Government's fault.

Basically, the reason that was arrived at is that economic cycles are bad for investment. The rise and fall in the GDP for example is amplified for the construction industry (typically 10% ot GDP) so that peaks are higher and the valleys more severe for the construction indusry than for the economy as a whole.  Looking specifically at infrastructure, in 2012 output was down 13%, while orders were up 38% compared to the previous year.  A study of the water industry concluded that because of the economic cycle every 5 years  20,000-40,000 jobs are lost which adds £7 to everyone's water bill.

An important factor contributng to the economic cycles is that in the past the Government (not singling out any particular party and government) has frequently changed its mind about infrastructure and uncertainty is not conducive to investment.  Some ministers have had a long term strategy which is very good for the industry because it encourages investment, but others are rather short term resulting in a "start/stop" approach to policy. 

The conclusion is that the most important thing that the government can do is establish a long term policy that persists across elections and other political events.  This not only encourages investment, but also allows other sectors to plan for the demands of infrastructure, for example, to estimate skills requirements in order to implement educational and training programs to produce the reauired skills.