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Welcome to the September issue of Voices on Infrastructure, a collection of insights on the project of the future.

The infrastructure ecosystem is ready for change: the typical project carries unwanted surprises, profits for the construction sector as a whole have been lower than its average cost of capital, and neither problem can be fully addressed so long as the industry’s 0.5 percent  annual productivity growth persists as it has for decades.

We all know the trends that would end the industry’s inertia—digitization, ecosystem integration, collaborative contracts, agile-principled teams, sustainability-principled portfolios, and more. And in the wake of unprecedented global disruption, we see new urgency among leaders to turn these ideas from buzzwords into built reality.

Yet the landscape can certainly inspire skepticism about the industry’s capacity to adopt and accelerate these changes: companies still run from project to project, incomplete packages are tendered based on the lowest price, risks are not well understood, margins are thin, and above-project improvement efforts usually seen as project “waste.” At the same time, we are curious to see which ecosystems will find the virtuous upward spiral and create value for all participants.

Nevertheless, at the brink of this exciting transition, we believe the way projects are developed and executed could change profoundly. Our focus is therefore on how these changes will look on the ground: What will they mean for day-to-day work? How can companies break the cycle of mistrust among project partners? And how can players capture the benefits of a portfolio of projects? 

In this issue, we polish up our crystal balls to explore these and anticipate other aspects of capital projects. Your insights are invaluable, so and we encourage you to take our short, 5-minute “Projects of 2025” survey on capital-project delivery.


Gerhard Nel
Partner
McKinsey & Company


Prakash Parbhoo
Partner
McKinsey & Company


Koen Vermeltfoort
Partner
McKinsey & Company

More Articles

Article

Industry leaders are using the agile approach to reimagine how capital projects are delivered.

Claire de Weerdt, Alistair Hamilton, Kevin Stokvis, and Pasley Weeks, McKinsey & Company

Article

We are taking the advice we typically give our clients and applying it to our own construction project—and we’ll be sharing the challenges and lessons as we go.

Ailke Heidemann, Cinzia Lacopeta, Sebastian Overlack, and Gernot Strube, McKinsey & Company

Article

Tony Hansen, Global Infrastructure Initiative

Article

US infrastructure could again act as the country’s central nervous system—if the industry joins together to pursue connected construction.

Bryn Fosburgh, Trimble

Article

An ecosystem of connected digital twins is the start of a new approach to planning and managing assets.

Mark Enzer, CDBB and Mott MacDonald

Article

Attracting private capital to help finance infrastructure projects is more important than ever, according to Michael Sabia, chair of the Canada Infrastructure Bank.

Michael Sabia, Canada Infrastructure Bank

Article

Climate change poses serious threats to infrastructure systems and the human lives that depend on them. It’s time for industry players to begin building resilience.

Brodie Boland, Peter Cooper, Kimberly Henderson, Robert Palter, and Jonathan Woetzel, McKinsey & Company

Article

COVID-19 has reinforced the need for new ways to fund projects. Approaches taken on urban transportation projects shed light on a potential path forward.

Clare Burgess, Paul Carrington, Alain Dodds, Joanna Lilley, Michael Pearson, and Nick Wong, Clifford Chance

Article

Montréal’s Réseau express métropolitain (REM), a new light-rail network currently under construction, serves as a model for how investors can help build crucial infrastructure quickly and sustainably.

Macky Tall, CDPQ Infra

Article

Market changes, technological progress, and disruptive entrants will overhaul industry dynamics. All players must choose whether to defend the core or to reinvent themselves.

Timmy Andersson, Jonas BiörckJan Mischke, and Erik Sjödin, McKinsey & Company

Article

Despite promising early successes, collaborative contracts remain a tough sell, especially in the context of a pandemic. Best practices can help project owners transition to greater collaboration.

Jim Banaszak, Jeff Billows, Rudi Blankestijn, Matthieu Dussud, and Rebecka Pritchard, McKinsey & Company

Video

In this video, McKinsey experts describe how high-rise buildings might change in the coming decade—and how construction and real-estate companies should evolve.

Aliza DzikJennifer KilianJan MischkeAditya Sanghvi, and Gernot Strube, McKinsey & Company

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