Infrastructure: The Basis for a Resourcient Economy

RESILIENT

California has long served as the U.S. gateway to a Resourcient future because it is: 

These values should be important to every community, city, and state.  But even in California, we need to rededicate ourselves to preserving that heritage and what it means to our economic, social and environmental health.  

 

We can have clean energy, clean water, preserve our natural beauty and do so in a way that not only protects, but builds jobs, healthier communities, improves our economic outlook and increases the value of our land.  We can provide our residents with access to affordable, efficient and cleaner forms of transport.  We can build homes, commercial buildings and towns that are more livable yet use less energy and water and produce less waste and pollution.  

 

We must invest in making sure that our future continues to be at least as bright as our past.  Climate Change is already driving both longer, deeper droughts, and periods of intense flooding, putting new stresses on an already aging infrastructure.  So we must invest in building out more resilient forms of our infrastructure systems, from energy, to water, to transport and buildings.  And we must protect and enhance the rich agricultural legacy that feeds not only the residents of California, but much of our nation.  

 

Our utilities, regulators, governing officials, investment entities, and our citizens and corporations must come together and re-dedicate ourselves to being a more resourcient state by setting forth a clear strategy for a clean, resilient, and more affordable energy, water, transport and urban ecosystem, while actively spurring technological innovation in energy, water, materials and agriculture, all bringing new investments into the state, and improving consumer choice.

Growing Challenges Amidst Ongoing Economic Opportunity.  We straddle a fine line between the enormous economic opportunity Silicon Valley-style technological progress has enabled and a growing set of systemic risks that threaten to challenge that same economic opportunity.  Environmental pollution, congestion, climate change, water and other resource shortages, are all symptoms of those risks.   In addition, the early benefits of technological change have disproportionately benefited large urban areas – smaller towns and rural areas are just beginning to catch up and feel left out of economic progress.  Those same more rural communities may feel the earliest brunt of both climate change and resource shortages (particularly water-related).  Our collective economic health depends on spreading those infrastructure improvements and economic opportunities more broadly across the state.

Infrastructure Can Bridge the Gap.  The greatest opportunity to address these systemic risks and to more broadly share the economic opportunities is to build more resilient infrastructure for the provision of energy, water and other resources (including data and communications and transport-related infrastructure).  Providing lower-cost energy and water to all our communities, giving them all access to the latest in data and communications capabilities (including educational opportunities inherent therein) and reducing wasted time in transport and wasted resource usage in buildings are all ways to ensure better economic health for us all.  Fortunately, technological progress over the last 20 years have made it possible to provide those benefits on an affordable-to-all basis.

Finding the Right Capital.  The biggest challenge to achieving this future is matching capital to need.  Even though almost all this infrastructure and related technologies are self-funding over time, they do require large amounts of initial capital.  Many of our largest pools of capital are struggling with finding ways to put enough money to work at rates that meet their cash flow obligations.  Much of that money is interested in finding long-term yields north of 7% per annum.  Today, most of that infrastructure capital is being provided by private equity players with shorter-term return expectations and with fee loading that simply captures more profits than most transactions can bear.  The challenge is building a more direct bridge between our large, long-term sources of capital and the communities that would benefit significantly from the build-out of this new infrastructure.

Better Smarter Infrastructure. We have the opportunity to not just replace aging infrastructure, but to do so with infrastructure that is smarter, more interactive, more resilient and ultimately more supportive of further growing our state and local economy.  

A Hybrid-Direct-Investment Model.  An investment model that combines the best of the Silicon Valley entrepreneurial company model and the pooling of capital represented by most private equity funds is the best means of taking advantage of this opportunity.  Building an investor-owned and controlled private infrastructure corporation can allow the state to fund its own infrastructure needs and provide its pension institutions with the rate of return they need.  Such a private corporation can compete with the private equity world for the best in talent, can be fully-controlled and risk-managed by its owners, can provide for lower fees and costs and higher returns, and can address the longer-term needs of all parties involved.

A Solution with Immediate Economic Impact.  The technologies that such a corporation must deploy are ready now, they can be deployed immediately and provide immediate job benefits and ongoing economic benefit to the applicable communities.  They can allow all of us to participate in the economic boom that started in Silicon Valley but is now much more broadly available to communities anywhere provided they can get access to this needed infrastructure.  Thus, we will lessen the pressure on congestion, resources and the environment that our biggest cities today threaten and we can deal with the systemic risks that threaten our very existence.

This section of our web site shares our learning and perspectives on how, not only California, but any state can take the necessary actions to begin building the resilient and resourcient infrastructure neeeded to support long-term economic vibrancy. 

RESOURCEFUL

Celebrates and protects its beauty, its natural and human resources, its diversity, and its outdoor lifestyles

Is a melting pot of cultures, ethnicities, businesses and communities that value diversity, education, health, creativity and technology; giving the state a vibrant diversified economy and outlook

PRESCIENT

EFFICIENT

Values and invests in higher education and technology, with the never-ending drive of Silicon Valley constant reinvigorating the State's business community

Understands the importance of protecting that environment, conserving those resources, limiting the disastrous consequences of pollution and Climate Change and constantly upgrading the quality of life of its residents