Sustainability

Smart infrastructure investment linked to economic development, jobs

Posted on May 12, 2015

Spending on energy-related, building equipment and sustainable transportation can stimulate regional economic activity and new business development, according to results announced Monday from regional studies conducted by Economic Development Research Group and Siemens at the Infrastructure Week kickoff event in Washington, D.C.

Now in its third year, Infrastructure Week is coordinated by America’s business and policy leadership to drive awareness of how the neglect of American infrastructure has affected the country’s global competitiveness and Americans’ livelihoods. From transportation systems to the energy grid, to the U.S. industrial base and smart buildings, in order to rebuild and renew these essential infrastructure networks, the country needs a long-term strategy built on intelligent technologies and digitalization, and collaboration between the public and private sectors. Elected officials and business executives will convene throughout the week to make the case for how investment in smart, agile and secure infrastructure systems will yield broad economic impact.

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“When you spend on infrastructure, you get a multiplier effect that boosts productivity and attractiveness for investment,” said Eric Spiegel, President/CEO of Siemens USA. “Infrastructure Week brings much-needed attention to invest in the systems and structures that power the economies in our cities, states and across the nation. As a company that works with cities building the infrastructure of tomorrow in more than 190 countries around the world, we believe this is precisely the kind of focus we need to create jobs, growth and economic opportunity for American workers in the 21st century.”

Economic Impact Study

  • Investing in smarter building technologies and energy efficiency upgrades on the University of Louisville campus helped directly and indirectly support a total of $35 million in new business sales and nearly 700 jobs – including new jobs that are supported by the savings achieved through the project’s implementation.
  • Upgrading and expanding public transportation systems in Salt Lake City by the Utah Transportation Authority resulted in more than $225 million in business sales and 1,300 permanent jobs.

Two different smart city solutions – building technologies and public transportation – in Louisville and Salt Lake City were evaluated for their broader economic impacts. These effects are not only driven by increased short-term spending through local equipment, labor and service purchases, but also by the savings achieved from their efficient use of resources and longer-term economic benefits. Initial findings include:

In Kentucky, the University of Louisville spent $45 million to make numerous energy efficiency upgrades in buildings across its campuses that are conserving water, electricity, and natural gas. The implementation of the two phases of these projects directly and indirectly supported local impacts estimated at over 600 jobs and $26 million in business sales. After project completion, the savings achieved beyond the cost-of-debt service (for the project) were then reinvested back into overall university operations and additional energy efficiency projects. This reinvestment has supported the creation of 70 jobs and an additional $9.3 million in business sales in the Louisville area over a three-year period – beyond the more than 600 jobs initially supported through project implementation.   

In Salt Lake City, a major driver in building the public rail transit extension was to reduce residents’ dependence on private vehicles and spur high-density development, thereby decreasing the region’s carbon footprint, improving local air quality and proactively managing congestion. The UTA TRAX (light rail) and FrontRunner (commuter rail) lines have supported development resulting in nearly 1,300 jobs. And by paying wages that are spent throughout the region, these jobs have directly supported an estimated $227 million in new business sales. Salt Lake City also saw more and higher-density economic development being spurred around transit projects to appeal to companies and developers seeking such access. Major companies including Adobe, eBay, Goldman Sachs, Overstock.com, and Workday have made office location decisions based in part on proximity to TRAX and FrontRunner stations.

Intelligent Infrastructure Solutions
With 81% of Americans already living in cities and their suburbs – and a projected 100 million more residents expected by 2050 according to UN data – intelligent infrastructure has become a high priority as urban areas look to build and reshape their communities. Urbanization, population growth, climate change and dwindling resources put increasing pressure on infrastructure systems, and operators are looking for intelligent solutions to respond.

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