Survey: Executives think infrastructure is inadequate

Business leaders around the world overwhelmingly believe that the infrastructure in their countries is insufficient to support the long-term growth of their organisations, according to a recent survey from global accounting firm KPMG.

According to the survey of 328 c-level executives around the world, only 14 percent thought that the infrastructure in their countries was completely adequate in supporting their business. The vast majority, 57 percent, thought the infrastructure in their countries was “somewhat” adequate.

Business leaders also expressed concern about the future. Roughly nine in ten respondents in the emerging markets of India (95 percent), Poland (93 percent), Russia (86 percent) and South Africa (86 percent) said that current infrastructure investment is insufficient to support the long-term growth of their organisations.

In developed regions such as Western Europe the figure is 64 percent. In North America the figure reaches 73 percent. 

The authors believe these numbers are likely to climb given that 80 percent of respondents said that infrastructure will be even more important to their companies five years from now.

“There is a certain inevitability, if you look at the numbers, that there will be someday lots of deals for investors to bid on,” said Rich Lee, lead partner for the US Infrastructure group of KPMG. The survey indicates there is a growing consensus that the public sector cannot finance its infrastructure needs alone, he added.

By a two-point spread (68 percent to 66 percent) business leaders also believe that the lack of effective government action, not economic conditions, can be more prohibitive to achieving the necessary level of infrastructure investment in their countries.

“What we’re taking away is that the need for transparency and the need for the government to be accountable for the programs and to demonstrate to people that the taxpayers are getting value for their money came up as a higher concern than the credit crisis,” Lee said.

The survey also found that business leaders around the world consistently said that roads and energy were the two sectors of infrastructure most urgently in need of investment. 

“If you look at the BRICs [Brazil, Russia, India, China], they don’t have roads and the US has roads, but they are in need of rehabilitation. So it is still a priority, but for different reasons,” Lee explained.

The survey was conducted by the Economist Intelligence Unit on behalf of KPMG.