On the Link Between Infrastructure and “Jobs for the Future”

July 29, 2011

By Michael Hendrix, Research Manager

In the midst of the sturm und drang of the debt ceiling debate in Washington, Politico held a morning event this week looking at the “Jobs of the Future.”  With panelists from the Obama administration, Congress, and academia, the event aired all manner of ideas as to how to get America back to work and ready for the future.  That’s a good thing, especially in light of recent articles on reducing hiring prospects for America’s unemployed.

What were some of the conclusions?  As Don Graves, Executive Director of the President’s Council on Jobs and Competitiveness, said, America needs to be focusing on investment.  This is something that all panelists agreed on, none more so than Glenn Hubbard, Dean of Columbia’s business school and former Chairman of President Bush’s Council of Economic Advisors, who pointed to the recent work of Edmund Phelps and argued for the creation of a national innovation bank to finance smart new ideas by entrepreneurs.  Similarly, Senator Jeanne Shaheen of New Hampshire said that if she could wave a magic wand and enact any piece of legislation right now in a bid to create more jobs, she would have Congress create a national infrastructure bank to spur private investment in public infrastructure.  Representative Kevin Brady of Texas, in bipartisan spirit, thought that this was a good idea, though he also said that the government’s initial investment in such a bank should come from cuts made elsewhere in the federal budget.

Whether it be an infrastructure banks or Jared Bernstein’s call later in the program for a Marshall Plan to fix America’s schools, the point came down to something Dr. Hubbard said: “What the American economy is missing now is animal spirits.”  That is, its often heady mix of entrepreneurial dynamism and consumer confidence.  What does that have to do with infrastructure?  Quite a lot, actually.  As Robert Puentes, a Senior Fellow at The Brookings Institution, put it in a recent event hosted by the Council on Foreign Relations, “Infrastructure is central to U.S. prosperity and global competitiveness.”  Investment in infrastructure is key not just to short-term job creation, but for laying down the foundation for future innovation.

The National Chamber Foundation’s recent event on infrastructure echoed the Politico panelists on investing for the future.  I’d invite you to check out what our private sector investors and public sector experts had to say.  Looking at what impacts business and job creation in the future is central to NCF’s mission.  We applaud Politico for furthering the debate on these vitally important issues, especially on infrastructure.

Business, Government Finding the Edges and Opportunities in Transportation Infrastructure

July 21, 2011

By Rich Cooper, Vice President, Research & Emerging Issues

America’s transportation infrastructure is the lifeblood of our economy. The roads, railways, waterways, airways and other transportation methods carrying goods and people around the country are what make our vast economy possible. There was a time when the United States’ transportation infrastructure was the envy of the world.  Times are changing and U.S. infrastructure isn’t. This poses a significant threat to America’s profitability, economic recovery and international competitiveness.

Adm. Thad Allen addressing the group *

Recognizing this, the National Chamber Foundation – the U.S. Chamber of Commerce’s think tank – put on a program in conjunction with the Chamber’s Let’s Rebuild America initiative. Titled “Infrastructure: What We Want, What We Need,” the event featured a keynote address by Adm. Thad Allen (who led the federal response to Hurricanes Katrina and Rita, as well as to the 2010 BP oil spill) and the release of the 2011 update to the Chamber’s Transportation Performance Index (TPI).

Watch the entire program
“Infrastructure:  What We Want, What We Need”
by clicking here.

The TPI is used to quantify how well transportation systems are meeting America’s demands. It shows that transportation infrastructure is a “leading indicator” of economic activity; each 1 point increase in the TPI is correlated with a 0.03 percent increase or decrease in U.S. Gross Domestic Product. In 2009, the TPI reached 56.6, which is the largest improvement in a single year since 1990. The factors contributing to this increase included reduced road congestion, decreased delays on inland waterways, and improvements in freight rail and transit safety.

Yet, this number is somewhat misleading, as it was not America’s infrastructure that improved, but its economy that crashed. The report notes that the TPI peak in 2009 was “due to the economic downturn, rather than strategic policy and regulatory reforms or new investment.”

With less economic activity due to the ongoing recession, the stress on America’s transportation infrastructure haslightened. As we begin the long climb back to prosperity and profitability, our infrastructure must be able to handle the growing volume of people and goods that move throughout the country every day. At present, our infrastructure is hard-pressed to keep up.

Tom Donohue, the Chamber’s president and CEO, noted in the report that “lasting jobs grow where infrastructure is strong.” The challenge then is not simply improving infrastructure for infrastructure’s sake, but is a part of the wider effort to rebuild America. Our nation’s economic recovery is in part dependent on how well we make changes to address the transportation system’s performance needs.

Without a thriving transportation infrastructure, growth in businesses and exports is not possible. It is also essential for travel and tourism, which offers opportunity for the private sector to grow and prosper. Now more than ever, the voice of business needs to speak up to keep infrastructure investment and improvement as a top national priority.

Janet Kavinoky introducing the 2011 Transportation Performance Index *

Moving people and goods is critical to the economy, and for the United States to maintain its competitive advantage, we need to strategically invest in infrastructure – the way many other countries are already doing.

Countries such as China, India and Australia, as well as friends and allies in Europe, are not going to stand idly by until we figure out what we’re going to do with our infrastructure.  We all live and operate in a global economy where everyone is looking for market edge and opportunity.  If you don’t seize those edges and opportunities, someone else will (and will probably take your lunch money too.)

To retain the infrastructure edge and opportunity, the Chamber developed a series of recommendations. Some of these were echoed during the panel discussion that concluded the event.

The first is to orient policy and project decisions around performance criteria; namely, current supply, quality of service and capacity for future growth. Elliot “Lee” G. Sander, Group Chief Executive for Global Transportation at AECOM, noted America’s ability to compete with China, India, Europe and other major markets is at risk. He echoed the concern that the U.S. economy will be hard pressed to fully recover and compete without a robust and resilient transportation system.

In the TPI, the Chamber also recommended a focus on cities or regions with high levels of population growth and development, but with limited access to an already aging infrastructure. Sander said the private sector needs to make clear the challenges occurring now and define for decision makers the implications if the public sector (and to a degree, the private sector) fails to take action.

Al Martinez-Fonts, VP of the U.S. Chamber of Commerce moderates the panel discussion *

States and localities also need to embrace public-private partnerships and private investment.  John A. Flaherty, a Principal at the Carlyle Group, noted the critical importance in how the public and private sectors talk about infrastructure responsibilities and projects. Given our current budget constraints, Congress will likely not provide additional funding for infrastructure projects and improvements, which means state and local leaders, absent necessary funds, must work with the private sector to achieve local infrastructure improvements.  Otherwise, projects that desperately need attention will remain unattended.

Brian Kamoie, the White House’s Senior Director for Preparedness Policy, added that in an emergency, the U.S. government cannot recreate the supply chains that the private sector uses daily to move people and goods around the country. The approach to building strong, resilient communities and transportation infrastructure should therefore incorporate a joint effort by the private and public sectors. Part of this, Kamoie said, will include better information sharing, a sentiment the private sector has been vocal in sharing with the administration.

DHS’ Assistant Secretary for Infrastructure Protection Todd Keil also emphasized the importance of partnerships as a way to collectively build resilience into America’s infrastructure and operations. Yet, while collaboration is critical, so is how we pay for it. With Congress looking for ways to reduce federal spending, Flaherty said that innovative financing is increasingly important. While the funding for needed infrastructure improvements may be lacking, stakeholders on both the public and private sides must look for innovative financial models that address our national financial challenges on the one hand and provide essential infrastructure improvements on the other.

In the end, it all comes down to leadership. Improving and expanding our transportation infrastructure is an economic imperative, though it hasn’t always been considered such by leaders in the public sector or for that matter the public. That must change. Even as Congress looks for ways to cut spending and reduce the deficit, we need to maintain at least the same level of financial investment in infrastructure while exploring new strategies, relationships and concepts to address our requirements. The needs outweigh the capabilities, and we can’t let up now.  If we do, the future of our infrastructure and long-term economy will become something none of us wants – bleaker.

*photo courtesy of Ian Wegreich of the U.S. Chamber of Commerce

U.S. Chamber to Release Let’s Rebuild America Transportation Index

July 18, 2011

As lawmakers work to deliver a more effective and efficient federal transportation program, the U.S. Chamber of Commerce will host a conference focused on the infrastructure needs of the business community. The event will be keynoted by retired U.S. Coast Guard Commandant and former National Incident Commander for the BP/Gulf Oil Spill, Admiral Thad Allen, who will address the challenges and opportunities for strategically investing in the resilience of America’s infrastructure.

During the event, the Chamber will also release an update to Let’s Rebuild America’s annual Transportation Performance Index series. This will measure how well infrastructure is meeting the economy’s demands. The event will conclude with an executive panel of public and private sector leaders who will discuss the infrastructure investment and resilience communities’ needs and interests.

On the panel will be:

  • Todd Keil, Assistant Secretary for Infrastructure Protection, US Department of Homeland Security
  • Brian Kamoie, Senior Director for Preparedness Policy, National Security Staff, The White House
  • Elliot “Lee” G. Sander, Group Chief Executive, Global Transportation, AECOM
  • John A. Flaherty, Principal, The Carlyle Group
  • Janet Kavinoky, Vice President, Americans for Transportation Mobility & Executive Director, Congressional Affairs, U.S. Chamber of Commerce
  • Al Martinez-Fonts, Executive Vice President, U.S. Forum for Policy Innovation, U.S. Chamber of Commerce

The event will be held on Tuesday, July 19, 2011, 8:30 a.m. – 11:30 a.m. EDT at the U.S. Chamber Headquarters, 1615 H Street, NW Washington, DC 20062.

Register online to attend or watch the live webcast. Credentialed members of the media are also invited to attend. To register, e-mail press@uschamber.com or call 202-463-5682.

Need, Want, (Don’t) Have: Bringing America’s Infrastructure Into The 21st Century

July 11, 2011

By Rich Cooper, Vice President, Research & Emerging Issues

In case you haven’t noticed lately, America’s infrastructure could use a makeover. Many of the things that help this country “GO” – roads, bridges, utilities and more – are in poor shape and in many places, crumbling before our eyes. It’s hard to believe a superpower like ours could find itself in a spot like this, but we are, and some serious fixing is in order.

We became a superpower not just through military might but through the engine that is our economy that produces jobs, technologies and opportunities. Central to that engine’s operations is our nation’s infrastructure and the need to update and improve America’s aging infrastructure is increasingly paramount to our country’s on-going prosperity and safety. The poor and overburdened conditions of our roads, bridges, transportation systems and others hinder growth and leave us vulnerable to security threats. In the wake of the Great Recession, our country’s industry and government require critical infrastructure capable of supporting our 21st century goals and aspirations.

While these challenges are increasingly evident and the need for improvement is widely understood throughout government, the country has seen little in the way of real change when it comes to building a stronger, more resilient America. When the Obama Administration took office, the President noted several changes in the way government would mete out funding for investments in things like improving infrastructure. The White House also championed a focus on building security into infrastructure, as well as creating a National Infrastructure Reinvestment Bank and investing in critical infrastructure projects.

These are all important efforts. Yet, for a president who based his campaign on the concept of change, we’ve yet to see any real change with regard to how we approach infrastructure improvements. Funding for the National Infrastructure Reinvestment Bank, for example, was nowhere to be found in the 2009 Recovery Act, the 2009 budget cycle or even the 2010 appropriations process. Even as efforts have started on the Hill in support of a National Infrastructure Bank, the Administration has largely been on the sidelines.

While it is easy to take shots at the White House for not being more aggressive in these areas, the truth is that not enough of us are talking and thinking strategically about infrastructure investment priorities, how risk and resilience are considered, and how we are going to pay for these much-needed updates. To be sure, some of the nation’s experts have made public calls for infrastructure improvements. TheAmerican Society of Civil Engineers (ASCE) issued a 2009 report card on America’s infrastructure. We got a D, just as we did in 2005, 2001 and 1998. The problem is clearly not going to right itself on its own. These are serious issues that require our country’s focused effort, from the government leaders with their fingers on the purse strings to the subject matter experts who know infrastructure and resilience inside and out.

Fortunately, America boasts some of the world’s brightest minds and wisest leaders. Bringing these key stakeholders and experts to the table to work together and establish real, achievable steps towards a stronger infrastructure is an important part of defining the path forward.

tallenThat’s why, as part of a newly established Business Horizon Series, the National Chamber Foundation – the think tank of the US Chamber of Commerce – in coordination with the U.S. Chamber’s Let’s Rebuild America initiative, will host a half-day program, “Infrastructure: What We Want, What We Need” on July 19th. Our keynote speaker will be the highly respected and much-regarded Adm. Thad Allen, former commandant of the U.S. Coast Guard. There are truly few people in America (or the world for that matter) who can attest to lessons learned when infrastructures fail.

Adm. Allen, currently a senior fellow at the RAND Corporation, led the country’s response to Hurricanes Katrina and Rita and delayed his retirement to serve as National Incident Commander of the BP oil spill. As one of America’s most distinguished and accomplished crisis leaders, Adm. Allen will talk about the challenges and opportunities we have for strategically investing in the resilience of our nation’s infrastructure.

During the program, we will also release the Let’s Rebuild America annual update to its Infrastructure Performance Index series, which measures how well transportation, energy, broadband, and water systems are meeting the nation’s infrastructure demands.

We will conclude the event with a senior-level panel of public and private sector infrastructure investment, protection and resilience leaders who will discuss, “Infrastructure: What We Want; What We Need.” They will include:

Moderator: Al Martinez-Fonts, Executive Vice President, US Forum for Policy Innovation ( a retired 30-year banking executive and former DHS Assistant Secretary for the Private Sector

Todd Keil, Assistant Secretary for Infrastructure Protection, US Department of Homeland Security
Brian Kamoie, White House National Security Council, Office of Resilience
Elliot “Lee” G. Sander, Group Chief Executive, Global Transportation, AECOM
John A. Flaherty, Principal, The Carlyle Group

To attend the event, which begins at 9 a.m. at the Chamber of Commerce, you can register online. You can also watch a live webcast on the day of the program.

History records that no economy can function without a viable and dynamic infrastructure that creates jobs and spurs innovation in limitless ways. Updating the nation’s infrastructure means a lot to our country’s future. I hope you can join us for this important discussion.

Governors Tackle Hard Choices Now, Prepare for Hard Work Ahead

July 11, 2011

By Delore Zimmerman
Co-Founder, President and Chief Executive Officer,
Praxis Strategy Group

States are the fulcrum of change in key areas of education, infrastructure, energy, innovation and skills training – something that was confirmed on many fronts in the both the 2010 and 2011 Enterprising States studies.  States are strategically positioned to put in place enterprise-friendly policies and initiatives that will create a favorable climate for business growth and foster job creation.

The past year saw some significant game changers among the states.  Since 2010, twenty-nine new governors have started their terms, ushering in an infusion of new ideas, viewpoints and voter expectations.   States now must do without federal stimulus dollars and states leaning toward insolvency have been alerted to the possibility of credit ratings that will raise the cost of money.  Persistent budget woes have constrained investments in growth in many states where job creation is the most needed.

Determining where to cut and where to invest is the central challenge of the day, a circumstance that was validated and discussed by the six Governors who participated in the U.S Chamber’s 2011 Governor’s Summit on Creating Jobs Through Free Enterprise.

It all starts at the top. Governors are faced with the stark reality of making hard choices now and laying the groundwork for the hard work that is most certainly ahead.  States must carry out short-term strategies to jumpstart and/or sustain an as of yet lackluster recovery and cut costs to make government more efficient and to avoid financial calamity. Simultaneously, they must craft and invest in innovations and structural solutions that will foster long-term economic growth while reining in taxes and regulations that stifle job creation.

The headlines attest daily to the steps that governors of every state, along with their legislative counterparts, are now taking to grow their economies, create jobs and compete globally. They want to help businesses prosper, to produce an educated and skilled workforce, and provide other essential services and infrastructure that foster the entrepreneurship and innovation that will lead to greater productivity and competitiveness.

Of course every state finds itself in a somewhat unique position and has its own economic DNA.  What works in one state to rein in spending, modernize government or create new engines of economic opportunity can serve as a model for others but there is no one size fits all pattern.  On the other hand, states do frequently compete against and learn from each other, setting up a dynamic interplay that accelerates innovation and development across the national landscape.

“Ultimately, there is only one route to sustainable state economies, and that is through broad-based economic growth,“ writes study co-author Joel Kotkin. “The road to that objective can vary by state, but the fundamental goal needs to be kept in mind if we wish to see a restoration of hope and American optimism about the future.”

Delore Zimmerman, Ph.D. is the President of the Praxis Strategy Group and a co-author of the U.S. Chamber of Commerce and National Chamber Foundation’s 2011 study Enterprising States: Recovery and Renewal for the 21st Century.