Building for growth: Infrastructure BFF - Institutional

Infrastructure special: Building for growth

BLACKROCK FUTURE FORUM

Senator Rob Portman, an author of the Infrastructure Investment & Jobs Act, details the legislation’s path of deployment and the role of private capital. Jim Fitterling, CEO of Dow, shares how businesses can facilitate and benefit from infrastructure modernization, while BlackRock experts identify the opportunity for investors.

LEGISLATION AND IMPACT

Key takeaways

01

Modernized infrastructure facilitates economic growth

Economic efficiency and competitiveness require revitalized infrastructure like roads, freight, and bridges as well as digital infrastructure like broadband and telecom. The US$1.2 trillion Infrastructure Investment & Jobs Act includes US$65 billion for broadband, US$42 billion of which is dedicated to increasing broadband equity and access.

02

Public-private partnerships scale the societal benefits

The Act unlocks new concessions and encourages the use of public-private partnerships, helping scale the impact of the legislation. The IIJA will focus capital on priorities such as EV charging stations and carbon capture technologies.

03

Infrastructure modernization can address supply chain woes

The legislation provides substantial funding to ports, highways, and freight projects, potentially helping alleviate supply-chain stresses and logistics challenges. Many of these assets have inflation protection built-in through concessions, regulation and contracts.

Global infrastructure needs modernization, with the U.S. unfunded infrastructure gap alone estimated to grow to US$2.6 trillion by 2039.¹ The recently passed U.S. Infrastructure Investment & Jobs Act (IIJA) is the largest legislation in nearly 80 years dedicated to funding infrastructure expansion and improvements, that also encourages private sector investments. The IIJA will help create investment opportunities in core infrastructure (roads and bridges) as well as in sectors like broadband, clean energy and electrification. The fiscal spend will also create adjacent public market opportunities in targeted sectors like telecom and semi-conductors.

The whole legislative effort will help in terms of competitiveness because we're talking about making our economy more efficient, therefore more productive, by improving our infrastructure.

Senator Rob Portman of Ohio

INDUSTRY PERSPECTIVE

Key takeaways

01

Broadband is essential for modern infrastructure

Access to broadband is essential for economic competitiveness and productivity, as well as to the next generation of roadways and transport. Autonomous mobility also means more digitally interconnected, smart roadways and therefore an investment in seamless 5G coverage.

02

Efficiency in data sharing & logistics bolster supply chains

Whether you are talking about shipment delivery trucks or ships arriving in American ports, data sharing technologies are critical to the efficient functioning of supply chains.

03

Adoption of carbon capture technology is accelerating

For many big industries, carbon capture technology and decarbonization energy infrastructure are already providing solutions for meeting net zero emission targets. Corporations like Dow are transitioning away from carbon intensive processes and investing in technologies that can recycle, convert, and store carbon and hydrogen.

Keeping America moving is a big them for the IIJA, with the majority of funds being dedicated to transportation and new projects that connect and protect communities. These range from cybersecurity, broadband expansion, grid modernization and carbon capture. Private capital currently invests in these on the fringes, and we believe the increase in public funding will entice more investment opportunities.

Digital infrastructure addresses not only giving everyone access but helps a lot of small and medium-size enterprises get started up. It helps the education levels. It helps with some of the income disparities that we see.

Jim Fitterling, Chairman and CEO of Dow