The smart way to deliver more infrastructure with less

AI can help governments deliver more infrastructure for less by optimising existing assets, improving productivity and making capital investment go further, writes Shane MacSweeney, EY’s Global Infrastructure Leader

As leaders gathered in Dublin in October for the International AI Summit, much of the discussion focused on the transformative potential of artificial intelligence and the opportunity for Europe to lead in the years ahead.

But AI’s true value will be measured not by what it can do in theory, but by how effectively it helps solve real-world problems. Few areas offer a greater opportunity than infrastructure.

The infrastructure challenge facing governments today is not a shortage of ambition. It is a shortage of capital, both political and financial.

The challenges all European governments face

Across Europe and beyond, governments face an unprecedented set of competing priorities. They must invest in housing, energy networks, transport, water systems and digital infrastructure.

At the same time, they must strengthen resilience against climate shocks, cyber threats and growing geopolitical uncertainty. Defence spending is rising rapidly as nations respond to a fundamentally changed security environment.

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These are the realities faced by governments. But they must also face fiscal and political realities. And they are inextricably linked. Fiscal resources are finite. Every euro spent in one vital area is a euro that cannot be spent in another. From a political perspective, electorates may demand investment in infrastructure, but they are usually unwilling to pay for it, least of all in the form of higher taxes.

During periods of healthy economic, growth coupled with a benign interest rate environment, governments have a certain amount of wriggle room to increase infrastructure spending without writing the political suicide note known as tax increases.

The challenge for Ireland

The Irish Government is in something akin to that strong position today. Booming, but potentially volatile corporation tax revenues, are delivering unprecedented surpluses which can be poured into the National Development Plan.

That is not the case across Europe, however, and much of the rest of the world where sluggish or negative growth, coupled with rising interest rates, is weighing on the fiscal position, to say the least.

In Ireland’s case, we must plan for a similar future, when those exceptional corporation tax inflows may no longer be available.

That will leave the Government with the difficult task of developing and maintaining infrastructure, while facing severe fiscal constraints. After all, people rarely vote for the party that built a road on the other side of the country but often do vote for the one that lowers their taxes.

Untying that Gordian Knot requires a changed mindset and the application of new approaches to old problems. In this case, the new approach is the application of Artificial Intelligence.

Smarter infrastructure policy

For decades, infrastructure policy has largely been synonymous with new infrastructure delivery. When capacity becomes constrained, the instinctive response is to build more: another road, another railway, another power plant, another treatment facility.

But in a fiscally constrained world, the smartest infrastructure investment may not always be a new asset. It may be extracting greater value from an existing one.

This is where technology, and particularly AI, can play a transformative role.

Consider transport networks. Congestion has traditionally prompted calls for new road construction. Yet in many cities, AI-enabled traffic management systems can optimise signal timings, dynamically manage lanes and improve traffic flow without pouring a single cubic metre of concrete. The result is more capacity from the same asset.

Similarly, rail operators are increasingly using predictive maintenance to identify faults before they occur. Rather than replacing assets prematurely or responding to failures after the event, infrastructure owners can extend asset life, improve reliability and reduce costs.

How sectors can use AI to build better infrastructure

The same principle applies across sectors.

Electricity grids can use AI to optimise network capacity and better manage fluctuating renewable energy supplies. Water utilities can identify leaks before they become major failures. Ports can improve throughput through intelligent scheduling and operational optimisation. Airports can use advanced analytics to increase passenger and aircraft movements without necessarily building new terminals or runways.

In each case, the objective is the same: deliver better outcomes from infrastructure that already exists.

This is known across industries and governments as “sweating the assets”. The concept is far from new, but the use of AI to do it most definitely is. The technology has the potential to become the most powerful productivity tool ever created.

Beyond optimising existing assets, AI can improve how new infrastructure is planned and delivered. Generative design tools can accelerate engineering processes. Digital twins can model alternative scenarios before construction begins. Advanced analytics can improve project controls and risk management, helping to reduce delays and cost overruns that have traditionally plagued major capital programmes.

Even modest productivity improvements could unlock substantial benefits. If infrastructure projects can be delivered faster, operated more efficiently and maintained more intelligently, governments can achieve more from the same capital envelope.

Resilient infrastructure delivery

As Europe seeks to strengthen its competitiveness, the countries that succeed over the next decade will not necessarily be those that spend the most. They will be those that allocate capital most effectively, extend the life of existing assets where appropriate, and use technology to unlock hidden capacity within their infrastructure systems.

The countries that can deliver resilient infrastructure, support economic growth and strengthen national security while living within fiscal constraints will also be better positioned to attract investment and create long-term prosperity.

This means taking an AI-first approach to infrastructure where the vast power of the technology is applied to national programmes and individual projects long before initial design commences or a spade is put in the ground.

In an era defined by trade-offs, the winners will not simply be those who build more, they will be those who learn how to deliver more with less. AI can be the tool that makes that possible. It may not deliver the infrastructure equivalent of a free lunch, but it can certainly make it a lot cheaper.