Transformation of Infrastructures: Sector Characteristics and Implications for Fundamental Change

Abstract

Infrastructure sectors such as energy or water supply, sanitation, or telecommunications provide us with services that are essential for modern life and for industrialized societies. In this article, we explore some of the sectors’ key characteristics in order to better understand the conditions that stimulate or hinder far-reaching transformation processes in infrastructures. It will be argued that durable and capital-intensive assets, together with a high degree of systemness generate considerable inertia and impede fundamental change. At the same time, capital intensity and massive investment needs as well as negative environmental impacts represent sources for change. A high degree of regulation and an often large share of public utilities also play a key role for sector dynamics. Conceptual frameworks for studying infrastructures and making policy recommendations have to take into account these particularities and the close interplay of techno-economic, organizational, and institutional characteristics.