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David Gilford on the Future of Infrastructure

Headline

Technology can advance infrastructure in more ways than we think, but making major advancements relies on governments and the private sector being forward-looking and thinking creatively about how to address the challenges of tomorrow together.


About the interview:

Last year, PRISM spoke with Sidewalk Investment Partners’ Head of Policy and Strategic Partnerships, David Gilford, to discuss the future of cities, infrastructure, and technology. During the conversation, David discussed how cities change, how technology can improve public well-being in cities and beyond, the prospects for the advancement of autonomous vehicles, and much more. In the interview, David notes the potential for innovation in our cities but that several challenges must be overcome. These include the fact that decision-makers often have a limited appetite for risk when it comes to infrastructure and that different emerging technologies need to be brought together to deliver the infrastructure solutions of the future, among others.


Key Takeaways:

  • There are great opportunities to implement exciting and innovative infrastructure in newer and greenfield cities with fewer existing layers of infrastructure in place.

  • Innovation in cities goes beyond the physical infrastructure we walk on, drive on, and use as transportation. Innovation is also about technologies that improve civic participation and interconnectedness with others. These trends are transformational.

  • The pandemic changed how we interact with cities and demonstrated their potential to change rapidly. We saw new services offered by cities and changes to the streetscape (e.g., making space for outdoor dining to the degree that before seemed unlikely ever to exist).

  • How cities will evolve is still an open question. Much depends on how people choose to use cities. Flexible working arrangements mean fewer commuters travel into the city daily, and they are planning transit options more carefully. This changes the route traveled, congestion in cities, and more. It also changes how future cities will need to be planned.


The Interview

PRISM: Hi David. We’re looking forward to this conversation on the intersection of tech and infrastructure. Would you tell us a bit of an introduction to yourself, your background, and what you’re up to now?


David Gilford: Likewise. Absolutely. I've gone back and forth between the public and private sectors throughout my career, but that was never really the plan. The consistent thing is that since I was a kid, I've been fascinated by how technology changes the world and how some things can change overnight, whereas other things take forever.


But the intersection of working between the public and private sectors started after college. I founded a startup whose mission was to apply technology to change the economics of people living in developing countries by reducing telecommunications costs. That was an excellent first introduction to how technology moves quickly and how slow governments can be to adopt regulatory changes that allow for progress.


After my time at the startup, I began working at the Federal Reserve in San Francisco, where I gained a deeper understanding of how bureaucracy works – effectively and ineffectively. Ultimately, it gave me an appreciation for the complexity of the public sector.


After business school, I joined GE Capital and got to work with very capital-intensive projects. Those ranged from telecommunications and media to energy – particularly renewable energy. While I was at GE, I really started to think about how technology innovation could be combined with the power of private capital to create a positive impact.


Then the financial crisis happened, and I had the chance to shift into economic development. I began working with the City of New York during Michael Bloomberg’s term as mayor and worked on green sector development. This was an interesting opportunity to take my experience with large and small organizations and contribute to a small team within the city’s government to understand how the city could reach its climate goals and diversify its economy simultaneously. At the time, that was a priority for the city. The layoffs produced by the recession created challenges for the city’s budget, and that was the first time I was thinking about how technology and innovation could help solve a public sector problem.


From there, I held several roles in city government for six or seven years. Then I jumped back to the private sector and joined a company called Intersection, which was the first investment that Sidewalk Labs, a subsidiary of Alphabet, had made. Intersection looked at the built environment and sought to understand how technology could be applied to improve connectivity, enable new business models, change getting around cities, alter working in offices, and that kind of thing. There, I worked as a consultant on various large-scale real estate, development, and redevelopment projects, which gave me a chance to look outside of New York, in places that are very different to it, like Tampa and Baltimore, and to think about the differences in how these types of projects and public-private collaboration happened.


Then, in 2018, I joined HR&A Advisors to help build their technology and innovation practice. There, I worked with cities and real estate developers again, which was a chance to learn what was happening elsewhere in the country. Through my work there, I connected with Sidewalk Infrastructure Partners, which was founded by former Sidewalk Labs leaders and had been spun out from Alphabet at that point. We started working together to create a platform to help close the digital divide—what we call CoFi. This became a priority of mine, particularly during COVID-19. I spent a lot of time thinking about the challenges that occur when someone can't fully participate in a digital society, telemedicine, education, and the like.


Then I joined SIP full-time and now lead our Policy and Strategic Partnerships. That means I’m working with a mix of public and private sector partners to think about how new technology can solve significant infrastructure challenges, from energy to transportation, waste, broadband, and so on.



PRISM: A lot there! Can we dig into SIP and its core objective?


DG: Definitely. I think it’s good to restate that infrastructure is a sector where change is slow. There are obvious reasons for that. Once a road is built, it’s normally just resurfaced and maintained for decades. You rarely have a chance to start over. At the same time, the technology to build roads – not to mention 5G or whatever else – improves rapidly.


Moreover, in our current moment, we have levels of political will and public sector investment that allow us to make changes that we don’t get to think about very often. That means there is a lot of change, and we can think more holistically about what future-ready infrastructure requires and deploy that. That right there is SIP’s mandate: to pioneer technology-enabled infrastructure that solves problems related to sustainability and resiliency and is more inclusive than infrastructure has been in the past.


We're investing in companies that have technology that can improve systems from energy to transportation. We invest in companies, and we build projects. On the project-building side, we partner with municipalities, counties, states, and other public sector entities and consider what it might be like to own this infrastructure a decade or two down the line when technology has evolved significantly. That’s the core of how we approach infrastructure compared to traditional infrastructure investors.


Our investors are also broadly mixed across the capital spectrum. For instance, our anchor investors include one of the largest technology companies in the world (Alphabet) and two of the leading global infrastructure investors (the Ontario Teachers’ Pension Plan and StepStone Group). With such financial partners, we can take a broad view of where innovation is happening with a thesis-driven approach related to how technology could be deployed in the real world. This allows us to generate returns while solving challenges for cities and the public more broadly.



PRISM: Great. I want to pick up on what you said about how things might look in the future. I think the “smart city” or “smart infrastructure” idea is exciting. Infrastructure as we experience it daily, is a bit underwhelming, right? There are always bold claims about how different it will be in the future, but when we go outside, it feels like it always has. There are some changes around the edges: we have some electric cars, we pay for parking with our phones, and so on, but by and large, cities and infrastructure feel very much like they did in the old days. If you take a 15- to 20-year view, what do you expect to be the significant changes we will see?


DG: Of course, no one has a crystal ball to know how things will be, but if you were to look at cities 150 years ago, you’d notice some big changes, particularly around the arrival of cars. But those changes did not take 100 years. Look at the window between 1910 and 1925, for example. You’d see many physical changes that occurred very quickly: horses and carriages gave way to automobiles, people started walking on sidewalks instead of in the middle of the street, and so on. So, yes, sometimes it does feel like things aren’t changing, but at the same time, there are often periods where things change very quickly.


I also think that it’s important to almost bifurcate cities into two categories: very established cities where change is more difficult because you are building on layers and layers of infrastructure that already exist, and greenfield cities or new developments that could look very different 15 or 20 years from now.


COVID-19 showed us some of what is possible and how things can change rapidly. Infrastructure hasn't changed that much in the past three years, but more experimentation came out of the pandemic. One example is the proliferation of space or outdoor dining. That’s what happens when you have political will. When combined with clear benefits to residents, change can happen more rapidly.


Another example of experimentation is how New York City’s Times Square changed during the Bloomberg administration. At the time, there was a lot of controversy about the idea of pedestrianizing the area, putting out chairs, and closing off streets. The city ultimately did a “temporary” pilot that proved it would not create a traffic apocalypse. Then it became permanent.


Using those examples as reference points, it becomes interesting to think: What is the digital equivalent of that sort of change? I’ve seen several iterations of the “smart cities” concept over the past ten-plus years, and. at this point, I find the term to be both broad and ambiguous. However, the conversation has evolved and has come to grapple with the reality that we cannot just focus on technology. Instead, it must start with what residents of cities need and what types of innovation will improve their well-being. The implementation then includes overhauling cities’ technology innovation departments, engaging productively with startups and the private sector more broadly, and so on.


In a sense, it doesn’t matter whether you call it a smart city or not. It’s much more about how technology is now embedded into projects – even those beyond infrastructure, like civic engagement - and its impact on how cities are designed and built.



PRISM: So, if we take the change that came with horses-versus-car between 1910 and 1925, what would be the equivalent change that would happen before now and say 2040? How is the user experience of the city going to change?


DG: A lot of this depends on how the future of office work evolves. There are a couple of different paths that I think you can imagine there, and right now, it’s hard to say which will most likely emerge.


We talk a lot about what the post-pandemic office will look like, and that’s often related to the idea that there is a trend toward de-urbanization. But we’re not really seeing that. Instead, it’s more about increased flexibility for many workers, allowing them to choose where to live and work, whether they’ll go into an office daily, and so on.


Flexibility is very different from being truly location agnostic. Think about how people in New York are returning to offices and daily routines. There's a difference between the relative resilience of neighborhoods where many people work from home and go into the office occasionally — going to neighborhood stores, restaurants, and whatnot — compared to a hub-and-spoke commuting model.


Ultimately we will see a push towards more mixed-use neighborhoods. We have seen this trend for decades; it accelerated during the pandemic. Many people still love living and being in cities, but their relationship with cities is changing. Now, it’s not all about riding the subway to a fixed commuting location every day; it’s about planning their day and week around a whole set of work and non-work related factors. All of this still takes advantage of the density of cities, but it adds more flexibility. I don’t think we’ll see flying cars in 20 or 35 years, but there will certainly be a further evolution in mobility.



PRISM: What about autonomous vehicles? What’s the timeline for autonomous vehicles to be prevalent in our cities?


DG: For autonomous vehicles to become ubiquitous, they must perform well enough to convince the public and regulators that they should be allowed everywhere. Then, there needs to be an insurance framework and other things that are not purely related to technology.


Some areas of transportation will be easier to automate, particularly where infrastructure can evolve to support such automation. In Michigan, Cavnue, SIP’s platform for the future of roads, has started developing the first corridor for connected and automated vehicles, using sensors and vehicle-to-infrastructure communications to enable vehicles to operate more autonomously. Other low-hanging fruit includes long-haul freight transportation, drayage of cargo, and other applications in semi-controlled environments.


I can also imagine faster adoption of autonomous bus rapid transit, which would be very impactful. Cavnue recently partnered with the mobility and robotics company RRAI to develop infrastructure technology to help bus fleet operators provide safer and more efficient operations.



PRISM: Interesting. That’s a fascinating thing to discuss. What’s the business model around these kinds of things? We know the famous case of Uber: Once everyone has a smartphone and you layer Google Maps on that, you get a new business model for mobility. Are there similar cases where technologies are coming together and birthing new business models? What’s happening out there, that’s not on our radar yet?


DG: Hindsight is always 20/20, so this is a really hard question. Now that we have smartphones, it feels obvious that ride-sharing apps would happen. If we borrow the Uber example again — or even Airbnb — the big change was that there was a reliable review system. That system became good enough to make people comfortable with the idea of sharing a vehicle or a home with strangers.


Similarly, you can imagine allocating space more efficiently if you take the trend of greater flexibility in work environments. For example, you might get away from being able to not plan for a 5- or 10-year lease cycle and do the same thing by the week or month. Doing so is a technology problem, not a market problem. That’s one area where technology continues to help sharing become more viable.


PRISM: That’s interesting to think about. It feeds into my next questions regarding how you decide where to invest. I imagine you might think, “If we're going to do some kind of sustainable transition, we're going to need to worry about everything being electric,” or “We’re going to need to retrofit X number of buildings.” To me, that knowledge creates buckets of things you can invest in. Is that the logic, or is it a bit more bottom-up?


DG: We have a thesis-driven approach to each of the infrastructure verticals. For a given sector, we start by thinking deeply about long-term trends and where needs still need to be met. So if we take transportation, for example, we did an internal sprint on autonomous vehicles, looking not only at where investment was happening but also where capital and innovation were absent. The result of our thinking was a focus on roads and other infrastructure outside of auto manufacturers’ control. From that point, we developed Cavnue, which we incubated as our transportation platform and grew into its own business. Cavnue is now effectively building the tech stack for future roads. We also did this in broadband and telecommunications with CoFi, creating an entirely new model of shared wireless infrastructure to take advantage of the opportunities and challenges of 5G deployment. We see a macro-trend towards a transition to a bidirectional grid within energy. So there, our work under the umbrella of Resilia looks at things like virtual power plants and the digital or transactive elements that exist within the realm of distributed energy production, demand response, and energy storage.


We're also looking at technologies around the future of data centers. We’re thinking about digital infrastructure as a core pillar of future development. Here, there’s an interplay between sustainable energy generation, which will be needed for this, and how centers are constructed and operated. A core aspect is how data centers can achieve sustainability targets even as the demand for cloud computing rapidly grows.


To summarize, we look at individual infrastructure verticals, go deep into them, develop and test a thesis, and then may ultimately build a platform around that vision.



PRISM: Is the technology already there, and it’s just about rolling out its development or building it from the ground up?


DG: Yeah, typically, the technology that we're talking about is more or less proven, but it’s just not deployed at the scale required or isn’t being included in long-term infrastructure projects. We're bringing together best-in-class technologies and thinking through how they can improve infrastructure across verticals, effectively creating new types of infrastructure assets and new business models that enable deployment at a scale. We believe there is an opportunity to develop tech-enabled infrastructure designed to address the needs of public sector partners and communities.



PRISM: So, we’ve talked a lot about serving governments so far, but I am interested in their role here and if that is changing. It seems like there was some experimentation by governments around the pandemic, but otherwise, it feels like governments are hitting the brakes on innovation. There are increasing regulations around Uber and Lyft, and so on, and it seems like there is a bit of resistance to doing things in a newer way than was done in the past. So, the big question is if you think the government's role is changing because they are accelerating the move to employ technology.


DG: Historically, new ideas tend to come from the private sector. That’s where the largest number of people are working on these things and have the license to experiment and fail. That’s harder for governments.


Earlier, we talked about how smart cities would evolve. Governments increasingly view themselves as catalysts, setting up incubators and other programs or saying: “Here's a prioritized list of things that we're trying to find solutions for.” That’s different from the traditional route, where they send out a request for proposal and figure out where opportunities are. It’s also different from the more Silicon Valley model of launch-first-ask-for-permission-later.


The history of ride-hailing is instructive in how companies like Uber could get large fast enough to demonstrate their value and become almost indispensable to the public before regulation caught up. But that's hard to replicate, particularly if you are talking about infrastructure. You can’t build a new power plant overnight without anyone noticing, and it’s incredibly capital-intensive.


So, there's recognition that the government can't just say yes or no to projects but must be engaged in developing solutions. That’s not easy.


Several cities have created or restructured their technology organizations to have a more public-facing function. They are playing a more active role in scoping problems and developing solutions. That is a sign that cities have more appetite for innovating than they did in the past.



PRISM: Stepping back a bit. I'm curious about the importance of the moment that we are in now. Will we look back several decades from now and think the post-COVID period was a real inflection point, or will we see it more as an inevitable innovation trend?


DG: Yeah, that's at least a billion-dollar question. There have been many moments when people have called to rethink cities or to think about how a particular city would survive some cataclysmic event. A lot of this moves slowly, and that’s not surprising. Similarly, I think the fact that, three years after the pandemic started, we are still grappling with what the “new normal” looks like is a sign that we haven't figured out how cities will change yet. Some fundamental shifts continue to happen, too. These revolve around where people work or what their days look like – that is, the city's rhythm. These are fundamental enough questions that, at a minimum, will drive a conversation on how cities should change. Time will tell if that is a shift that will move towards smart cities or if it will be a continuation of trends that have been underway for a long time.


The fact that tens of billions of dollars are pouring into cities for things like broadband infrastructure will result in change. The big question is if this creates change that is “future-ready” or if it ends up just being more of the same. That’s my big concern right now. We have unprecedented amounts of money pouring into building more infrastructure, but much of it looks the same as before. There are reasons for this conservative approach: risk aversion on the part of everyone involved, ensuring there are no scandals or waste, and things like that are obvious. But there is also a clear need for new partners, approaches, and procurement mechanisms.



PRISM: Who are the losers here? Presumably, a big shake-up is going to create losers. Are there industries that are going to suffer?


DG: Many Americans only have one feasible option for telecommunications services. So, there, you have a lot of space to expand possibilities. This could include new local infrastructure, new global services like Starlink, or local startups offering community wireless internet service, and so on. That could be a threat to incumbents in the sector. They may manage to evolve, but the days of being the exclusive pipe that delivers essential services are ending.


PRISM: What is something that we should be thinking about or are thinking about incorrectly that could change how we will think about the future of infrastructure?


DG: One heuristic I use to figure out where to focus is thinking about what is in the news today versus what we will look back on 20 years from now and think of as the big stories that shaped our world. I try to distinguish between the things that are good sound bites right now versus the slow evolutions that point in a particular direction.


This is hard to do, but one way of thinking of this is with the example of Starlink. Right now, it offers a $150 per month plan or whatever it might cost, and for some people, that may be better than their other options. That’s great, but the interesting question is what happens when everyone in a country has access to satellite-based internet services or at least the option to access them. Does that change the way that networks are planned out? That hypothetical opens a lot of questions.


Thinking about the logical endpoints of these trends or news stories is an excellent tool for thinking about what will be transformative versus just a nice new business.



PRISM: That's a great answer and is a fascinating way to think about what changes our lives as opposed to how companies do business. These are much slower-moving trends that we don't perceive because they are not fast enough or spectacular.


DG: Yeah, it's the difference between thinking about how animals move around a forest versus how trees grow in the forest. The animals move fast, and there is a lot going on, but if you look at the forest under the right time-lapse, the most notable changes will be the trees growing. That’s really how it is for things with infrastructure, too.



PRISM: That’s a great analogy and an excellent place to wrap up. Thanks for the fantastic conversation.


DG: My pleasure. Thanks for the opportunity to chat.



David Gilford can be found on the Sidewalk Infrastructure Partners website, LinkedIn, and Twitter.


For more on Sidewalk Infrastructure Partners, see their website, LinkedIn, and Twitter.


Make sure to follow PRISM on Twitter and LinkedIn.

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