Infrastructure Economics

by | Nov 12, 2020 | Development, ICT4D |

Infrastructure economics

“When we meet, let’s have an old school phone call so we can both go for a walk at the same time.”

Great idea I thought. And then I remembered where I live. We live in a beautiful place, however the only place that has even semi-reliable mobile phone signal is at the end of our field. Therefore for the idea to work, I’d basically be walking in circles in our field praying the signal would hold.

We had the call anyway, he went walking and I went even more old school and used our landline.

Realistically, mobile phone signal where I live isn’t going to get better for a long time. Partly because of geography (we live in a valley), but mostly because of economics (there is around 100 people in our hamlet).

The economics of infrastructure means it doesn’t make business sense to connect our hamlet to the network. This is true when it comes to improving our broadband speed and other things. However, interestingly it doesn’t apply to roads and bus services, which we have.

Our hamlet is not special in this regard. This experience is repeated throughout the UK, Canada, and the world. (Except perhaps the bit about the bus service).

Businesses make decisions on economics, profit, customers and cashflow. Therefore, if the cost to put in the infrastructure is $100 and the income they will receive from it over its lifetime is $80, then it doesn’t make sense for them to do it. They can want to serve those customers but it is not sustainable. So these small communities often get left out. Especially if they are rural or remote because then the initial infrastructure costs jump exponentially.

We leave people out. In this case because they are not economically viable. They are not efficient. They are not considered ‘value for money’.

We do this in the humanitarian space too. Especially in digital transformation. Offline, low bandwidth, no smartphone environments are rarely part of the original design process because the economics don’t work. Our decision making is similar to a business.

We leave people out for efficiency reasons. But we don’t talk about it or them.

Perhaps it’s time we did.

Photo by Illiya Vjestica

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