speaker-0: Nexus, published by GHD, Actionable Foresight.
speaker-1: AI, geopolitical tension, cyber threats, climate disruption. If you've read any major risk outlooks recently, those themes will be familiar. But what if one of the most important risks isn't being discussed nearly enough? Critical infrastructure consistently ranks surprisingly low across many global risk assessments. Yet it sits at a point where climate, cyber, economic, and geopolitical pressures collide. So, is infrastructure being underestimated, not as a standalone risk? But as the system through which many other risks actually materialize. Welcome to the Nexus Podcasts. I'm Ben Hall, Global Thought Leadership Manager at GHT. Today I'm joined by Anne-Marie Kirkman, Global Lead for Strategic Growth Initiatives at GHD. Anne-Marie is a longtime advocate for innovation and infrastructure and has spent more than 25 years helping governments, industries, and communities navigate complex change. Anne-Marie, welcome to the Nexus Podcasts.
speaker-0: Thank you for having me.
speaker-1: So let's get straight to it. Why do you believe critical infrastructure is being underweighted in many of the major global risk outlooks?
speaker-0: Well, I think it's because we tend to think about risk and looking at it through individual lenses. So if we look at climate, cyber, geopolitical instability, all of the ones that you just mentioned, Ben, we tend to think about them in separate categories. And infrastructure doesn't neatly fit into one of those buckets. So often becomes invisible in the types of analysis that we've been looking at. The irony though is that infrastructure is where the risks actually start to collide. It's the electricity grid that enables healthcare. It's the water systems that support communities and industry. And it's the communication networks that underpin emergency response and the economic activity ⁓ that we see in so many of the countries ⁓ that we operate in. And so when infrastructure starts to fail, the consequences are rarely confined to just one sector. So I'd actually argue that infrastructure isn't being overlooked because it's unimportant. It's being overlooked because it's so foundational that we've almost stopped actually seeing it.
speaker-1: And ⁓ y you authored an article on Nexus around this topic, and one of the most striking points you make is that infrastructure shouldn't be viewed as a risk category on its own as you just mentioned then. So can you explain further what you mean by infrastructure acting as a as a risk multiplier?
speaker-0: Yeah, sure. Very happy to, because I think most people would hear the word risk multiplier ⁓ and think of it as something that actually is creating risk. ⁓ but that's not what I mean at all. What I mean is that infrastructure is the mechanism through which risk really spreads. So let me give some examples of that. If we think about a cyber attack ⁓ on an oil electricity network, for example, that can affect transport, healthcare, telecoms, ⁓ and wastewater treatment. ⁓ if we think about a climate event. That disrupts obviously the energy supply, which then affects manufacturing, logistics, supply chain, and essential services. So it's the ripple effect. So the original shock to the system might be localized, but infrastructure done well determines how far and how fast that shock propagates. And that's why I think infrastructure is so important to think about in a system's perspective. It can either amplify the disruption or it can absorb and dampen it.
speaker-1: Yeah. And one of the examples you gave in the article was about, for example, an energy system shutting down and that sort of has a knock on effect to wastewater treatment operations. And you gave a few other examples there, which is great. So so why are these kind of dependencies often overlooked until something goes wrong?
speaker-0: Mm. I think it's because we're seeing them increasingly everywhere. So let's take the energy transition. and it might be stating the obvious, but utilities really are digitizing rapidly. ⁓ we're seeing increases in cyber exposure, and at the same time, these types of utilities are Dealing with increasing extreme weather events, supply chain pressures, and growing geopolitical competition for downstream or upstream inputs such as critical minerals and access to technology. So, what I think is that we're moving into a world where risks are no longer arriving just one at a time. So infrastructure operators have been asked to manage multiple of these interacting pressures simultaneously. And ⁓ to bring this to life, I'll give an example. ⁓ it was a Texas winter storm in twenty twenty one. I remember I'm I'm based here in Sydney, but I work with a lot of colleagues over in the US and I saw the the typical sunny Texans arriving on screen wearing beanies and scarves and they had no electricity and their water pipes were freezing. It was completely unexpected. and so this is what started as an extreme weather event, and most people remember it as an energy supply. situation. But really it was a cascading implications on infrastructure. So millions of people lost power in Texas. Water treatment and distribution systems were significantly disrupted. Communications were affected, hospitals came under pressure, and entire communities were struggling to access basic services. And they're just not accustomed to having to do that into Texas. So I think that gives us a really good example where infrastructure became the cascading effect within the system and the interdependencies between the infrastructure asset classes were becoming very obvious ⁓ to all of the Texans experiencing that particular winter.
speaker-1: That's a great case study to to pull it all together and really set this up nicely. So just just just go back a little bit here. When when risk reports come out, they often discuss climate change, cyber threats, geopolitical instability, economic uncertainty. They and they describe them as separate challenges. Why do you think that happens? Do they are they not seeing the bigger picture as you've just described then?
speaker-0: think it's just historic. We've always thought about utilities typically being provided in silos and for many years, if not the last one hundred years, it worked absolutely fine to see it in that way. But the interconnectivity, particularly around technology and telco provision, in my opinion, means that they're not no longer operating in silos. So if we think about it, water supply depends on energy. Energy depends on communications. Communications depends on power and transport depends on all three of these. So it's a circularity within the system. And as I said, historically, utilities could focus on their own assets and they would perform reasonably well. But increasingly, that's where the greatest vulnerabilities lie. It's the interfaces between the systems rather than the assets themselves. And the challenge isn't simply making these assets more resilient. It's the dependencies that connect across them. So organizations that can map. And manage those interdependencies will be far better off and positioned, rather than those that are still thinking about assets or sectors, class by class.
speaker-1: Mm-hmm. That was gonna be one of my questions about how these silos create problems in our systems and you just covered that. So how how do organizations overcome these s this silo situation? How do they sort of breach that and then look about a bigger picture? What's the solution?
speaker-0: Mm, well, I think we need to start making the invisible visible. So so much about the utilities and the infrastructure that's provided. We're so used to it working well most of the time. You know, energy, you know, has reliability rates in most modern countries above ninety nine, well above ninety nine percent. The same water arrives when we turn on a tap. And it's pretty rare for our communication systems to go down. So as a result, those kind of dependencies, particularly between systems, are largely invisible. It's really only during those points of disruption, like that example I gave in Texas, ⁓ where we discover how reliant we are on a particular system and how that connects with another. You know, I gave an example in the article about a wastewater treatment plant may appear to be a water asset, but with the out the electricity supply, it quickly switches and becomes a public health concern. So these relationships are are often really hidden in plain sight. And that's why the resilience planning I think needs to move beyond asset performance and really focus on those sin system interactions and particularly how those systems interact under pressure.
speaker-1: case studies you just mentioned really ran a fan for me. If when you when you sit down with a client, whether it's a government department or a or a private private company, do you use these case studies to sort of highlight what you're talking about? Do you sort of lead off with that? Well
speaker-0: I like to think about when has it not worked for whoever it is the client that I'm working with. Everyone's got an example over their career where there is an assumption of where have managed risk, we've contained it, this asset we know, you know, inside and out. It tends to be the first or second order adjacencies where, you know, the systems start to fail. I I'll just off the cuff give you another example. ⁓ again, it was in the US, in Jackson, Mississippi. And my understanding is that, you know, it was a a water supply asset and there was a particular pump that needed a particular part. And for whatever reason that part wasn't there for the pump and therefore the city didn't have have water supply. ⁓ and as we know, if you haven't got water supply, we're not able to send kids to school. Certain industries and manufacturing's not able to happen. So yes, the the ribble effects are are very real and I think for a lot of us we are starting to understand and experience the weather. changes and the implications of more severe weather events. And I I think all of us have an example in our work and personal life where of experience infrastructure not working like it should.
speaker-1: Mm. And the OECD has advocated moving beyond asset level protection towards system level resilience, which we've we've just discussed, of course. So what does that look like in practice and how different is it from traditional infrastructure planning?
speaker-0: Yeah, sure. I think what it requires us to do is to ask slightly different questions than we typically would. So traditional infrastructure planning tends to ask, like, how do I protect this particular asset? A system reliance asks a slightly different question and a and a more important one in my opinion, and that is how does the entire system continue functioning if this asset fails? And it's a different way of looking at it. So it means understanding the interdependencies, planning for a cascading of failures. And potentially increasing the redundancy in some infrastructure where appropriate, and improving importantly, the coordination across sectors. So it also means designing for adaptation rather than just assuming that we'll be able to predict this is the way that a particular asset class could fail in the future. So really I'm I'm looking at this. The the goal is ensuring that communities and economies and essential services can continue operating when the disruption ⁓ inevitably it does occur.
speaker-1: So it's a matter trying to identify risk and trying to help people identify what their risks are really, isn't it?
speaker-0: Yeah. And the first, second and sometimes the third order implications of that that are often without the or beyond the specific boundaries of a particular asset.
speaker-1: So can drill down that far to second, third, fourth potential issues coming up. Planning ahead is a lot more
speaker-0: Yeah. I think you need to. Yeah. That's the sort of systems thinking's approach that's that's really required. Yeah.
speaker-1: So so looking ahead over the next decade, so what concerns you? Two questions here. What concerns you most if organizations continue to underestimate infrastructure's role in shaping global global risk? And secondly, ⁓ where do you see the greatest opportunity for organizations that get this right?
speaker-0: Yeah, ⁓ great questions. Thank you, Ben. So look, I would say my biggest concern is continuing to treat infrastructure as s a background issue rather than one of ⁓ strategic or or mission critical importance. If we underestimate it, we do risk being repeatedly surprised by these cascading failures that I think we'll see more and more of. And the upside opportunity is enormous. So infrastructure is one of the few levers that we can simultaneously improve economic productivity. We can use infrastructure to improve climate adaptation, energy security, ⁓ community wellbeing and and importantly and increasingly importantly, national resilience. So I'm seeing the the topic of national sovereignty really come into the mix increasingly that that has come to the fore ⁓ with some of the the geopolitical conflict that I'm sure we're all experiencing in some form and some level of disruption that I'm also predicting we'll continue to see for many months to come. So we're seeing nations that can really secure their energy systems, water resources, digital networks, supply chains, critical infrastructure. They've got far greater freedom to determine their own future than those that cannot. They're finding themselves increasingly squeezed and exposed to the external shocks associated with national sovereignty, related to core basic essential infrastructure, and the geopolitical pressures and strategic dependencies that that is added into the complexity. So ultimately I'm seeing us and advocating for a shift from thinking about infrastructure as something we maintain to something that we strategically invest in as a foundation for prosperity, resilience and importantly, and increasingly importantly, the the national sovereignty aspect to it.
speaker-1: A big message to get out there, isn't it, really? Good luck with all of that.
speaker-0: Mm-hmm. That's all right. I'm not the only one sharing this message. I think many people have got their eye on it now. Yeah.
speaker-1: Look, thanks for your insights, Anne Marie. I really appreciate it and thanks for joining us today. Well, critical infrastructure may rate lower than many headline risks, but as we've just discussed today, it often determines how these risks ultimately play out. To rein Ad Marie's Nexus Weekly Column and subscribe for future podcasts, video and articles, visit Nexus. Until next time, thanks for listening.
speaker-0: Yeah, my pleasure. Brought to you by Nexus, published by GHD, Actionable Foresight.
speaker-1: AI, geopolitical tension, cyber threats, climate disruption. If you've read any major risk outlooks recently, those themes will be familiar. But what if one of the most important risks isn't being discussed nearly enough? Critical infrastructure consistently ranks surprisingly low across many global risk assessments. Yet it sits at a point where climate, cyber, economic, and geopolitical pressures collide. So, is infrastructure being underestimated, not as a standalone risk? But as the system through which many other risks actually materialize. Welcome to the Nexus Podcasts. I'm Ben Hall, Global Thought Leadership Manager at GHT. Today I'm joined by Anne-Marie Kirkman, Global Lead for Strategic Growth Initiatives at GHD. Anne-Marie is a longtime advocate for innovation and infrastructure and has spent more than 25 years helping governments, industries, and communities navigate complex change. Anne-Marie, welcome to the Nexus Podcasts.
speaker-0: Thank you for having me.
speaker-1: So let's get straight to it. Why do you believe critical infrastructure is being underweighted in many of the major global risk outlooks?
speaker-0: Well, I think it's because we tend to think about risk and looking at it through individual lenses. So if we look at climate, cyber, geopolitical instability, all of the ones that you just mentioned, Ben, we tend to think about them in separate categories. And infrastructure doesn't neatly fit into one of those buckets. So often becomes invisible in the types of analysis that we've been looking at. The irony though is that infrastructure is where the risks actually start to collide. It's the electricity grid that enables healthcare. It's the water systems that support communities and industry. And it's the communication networks that underpin emergency response and the economic activity ⁓ that we see in so many of the countries ⁓ that we operate in. And so when infrastructure starts to fail, the consequences are rarely confined to just one sector. So I'd actually argue that infrastructure isn't being overlooked because it's unimportant. It's being overlooked because it's so foundational that we've almost stopped actually seeing it.
speaker-1: And ⁓ y you authored an article on Nexus around this topic, and one of the most striking points you make is that infrastructure shouldn't be viewed as a risk category on its own as you just mentioned then. So can you explain further what you mean by infrastructure acting as a as a risk multiplier?
speaker-0: Yeah, sure. Very happy to, because I think most people would hear the word risk multiplier ⁓ and think of it as something that actually is creating risk. ⁓ but that's not what I mean at all. What I mean is that infrastructure is the mechanism through which risk really spreads. So let me give some examples of that. If we think about a cyber attack ⁓ on an oil electricity network, for example, that can affect transport, healthcare, telecoms, ⁓ and wastewater treatment. ⁓ if we think about a climate event. That disrupts obviously the energy supply, which then affects manufacturing, logistics, supply chain, and essential services. So it's the ripple effect. So the original shock to the system might be localized, but infrastructure done well determines how far and how fast that shock propagates. And that's why I think infrastructure is so important to think about in a system's perspective. It can either amplify the disruption or it can absorb and dampen it.
speaker-1: Yeah. And one of the examples you gave in the article was about, for example, an energy system shutting down and that sort of has a knock on effect to wastewater treatment operations. And you gave a few other examples there, which is great. So so why are these kind of dependencies often overlooked until something goes wrong?
speaker-0: Mm. I think it's because we're seeing them increasingly everywhere. So let's take the energy transition. and it might be stating the obvious, but utilities really are digitizing rapidly. ⁓ we're seeing increases in cyber exposure, and at the same time, these types of utilities are Dealing with increasing extreme weather events, supply chain pressures, and growing geopolitical competition for downstream or upstream inputs such as critical minerals and access to technology. So, what I think is that we're moving into a world where risks are no longer arriving just one at a time. So infrastructure operators have been asked to manage multiple of these interacting pressures simultaneously. And ⁓ to bring this to life, I'll give an example. ⁓ it was a Texas winter storm in twenty twenty one. I remember I'm I'm based here in Sydney, but I work with a lot of colleagues over in the US and I saw the the typical sunny Texans arriving on screen wearing beanies and scarves and they had no electricity and their water pipes were freezing. It was completely unexpected. and so this is what started as an extreme weather event, and most people remember it as an energy supply. situation. But really it was a cascading implications on infrastructure. So millions of people lost power in Texas. Water treatment and distribution systems were significantly disrupted. Communications were affected, hospitals came under pressure, and entire communities were struggling to access basic services. And they're just not accustomed to having to do that into Texas. So I think that gives us a really good example where infrastructure became the cascading effect within the system and the interdependencies between the infrastructure asset classes were becoming very obvious ⁓ to all of the Texans experiencing that particular winter.
speaker-1: That's a great case study to to pull it all together and really set this up nicely. So just just just go back a little bit here. When when risk reports come out, they often discuss climate change, cyber threats, geopolitical instability, economic uncertainty. They and they describe them as separate challenges. Why do you think that happens? Do they are they not seeing the bigger picture as you've just described then?
speaker-0: think it's just historic. We've always thought about utilities typically being provided in silos and for many years, if not the last one hundred years, it worked absolutely fine to see it in that way. But the interconnectivity, particularly around technology and telco provision, in my opinion, means that they're not no longer operating in silos. So if we think about it, water supply depends on energy. Energy depends on communications. Communications depends on power and transport depends on all three of these. So it's a circularity within the system. And as I said, historically, utilities could focus on their own assets and they would perform reasonably well. But increasingly, that's where the greatest vulnerabilities lie. It's the interfaces between the systems rather than the assets themselves. And the challenge isn't simply making these assets more resilient. It's the dependencies that connect across them. So organizations that can map. And manage those interdependencies will be far better off and positioned, rather than those that are still thinking about assets or sectors, class by class.
speaker-1: Mm-hmm. That was gonna be one of my questions about how these silos create problems in our systems and you just covered that. So how how do organizations overcome these s this silo situation? How do they sort of breach that and then look about a bigger picture? What's the solution?
speaker-0: Mm, well, I think we need to start making the invisible visible. So so much about the utilities and the infrastructure that's provided. We're so used to it working well most of the time. You know, energy, you know, has reliability rates in most modern countries above ninety nine, well above ninety nine percent. The same water arrives when we turn on a tap. And it's pretty rare for our communication systems to go down. So as a result, those kind of dependencies, particularly between systems, are largely invisible. It's really only during those points of disruption, like that example I gave in Texas, ⁓ where we discover how reliant we are on a particular system and how that connects with another. You know, I gave an example in the article about a wastewater treatment plant may appear to be a water asset, but with the out the electricity supply, it quickly switches and becomes a public health concern. So these relationships are are often really hidden in plain sight. And that's why the resilience planning I think needs to move beyond asset performance and really focus on those sin system interactions and particularly how those systems interact under pressure.
speaker-1: case studies you just mentioned really ran a fan for me. If when you when you sit down with a client, whether it's a government department or a or a private private company, do you use these case studies to sort of highlight what you're talking about? Do you sort of lead off with that? Well
speaker-0: I like to think about when has it not worked for whoever it is the client that I'm working with. Everyone's got an example over their career where there is an assumption of where have managed risk, we've contained it, this asset we know, you know, inside and out. It tends to be the first or second order adjacencies where, you know, the systems start to fail. I I'll just off the cuff give you another example. ⁓ again, it was in the US, in Jackson, Mississippi. And my understanding is that, you know, it was a a water supply asset and there was a particular pump that needed a particular part. And for whatever reason that part wasn't there for the pump and therefore the city didn't have have water supply. ⁓ and as we know, if you haven't got water supply, we're not able to send kids to school. Certain industries and manufacturing's not able to happen. So yes, the the ribble effects are are very real and I think for a lot of us we are starting to understand and experience the weather. changes and the implications of more severe weather events. And I I think all of us have an example in our work and personal life where of experience infrastructure not working like it should.
speaker-1: Mm. And the OECD has advocated moving beyond asset level protection towards system level resilience, which we've we've just discussed, of course. So what does that look like in practice and how different is it from traditional infrastructure planning?
speaker-0: Yeah, sure. I think what it requires us to do is to ask slightly different questions than we typically would. So traditional infrastructure planning tends to ask, like, how do I protect this particular asset? A system reliance asks a slightly different question and a and a more important one in my opinion, and that is how does the entire system continue functioning if this asset fails? And it's a different way of looking at it. So it means understanding the interdependencies, planning for a cascading of failures. And potentially increasing the redundancy in some infrastructure where appropriate, and improving importantly, the coordination across sectors. So it also means designing for adaptation rather than just assuming that we'll be able to predict this is the way that a particular asset class could fail in the future. So really I'm I'm looking at this. The the goal is ensuring that communities and economies and essential services can continue operating when the disruption ⁓ inevitably it does occur.
speaker-1: So it's a matter trying to identify risk and trying to help people identify what their risks are really, isn't it?
speaker-0: Yeah. And the first, second and sometimes the third order implications of that that are often without the or beyond the specific boundaries of a particular asset.
speaker-1: So can drill down that far to second, third, fourth potential issues coming up. Planning ahead is a lot more
speaker-0: Yeah. I think you need to. Yeah. That's the sort of systems thinking's approach that's that's really required. Yeah.
speaker-1: So so looking ahead over the next decade, so what concerns you? Two questions here. What concerns you most if organizations continue to underestimate infrastructure's role in shaping global global risk? And secondly, ⁓ where do you see the greatest opportunity for organizations that get this right?
speaker-0: Yeah, ⁓ great questions. Thank you, Ben. So look, I would say my biggest concern is continuing to treat infrastructure as s a background issue rather than one of ⁓ strategic or or mission critical importance. If we underestimate it, we do risk being repeatedly surprised by these cascading failures that I think we'll see more and more of. And the upside opportunity is enormous. So infrastructure is one of the few levers that we can simultaneously improve economic productivity. We can use infrastructure to improve climate adaptation, energy security, ⁓ community wellbeing and and importantly and increasingly importantly, national resilience. So I'm seeing the the topic of national sovereignty really come into the mix increasingly that that has come to the fore ⁓ with some of the the geopolitical conflict that I'm sure we're all experiencing in some form and some level of disruption that I'm also predicting we'll continue to see for many months to come. So we're seeing nations that can really secure their energy systems, water resources, digital networks, supply chains, critical infrastructure. They've got far greater freedom to determine their own future than those that cannot. They're finding themselves increasingly squeezed and exposed to the external shocks associated with national sovereignty, related to core basic essential infrastructure, and the geopolitical pressures and strategic dependencies that that is added into the complexity. So ultimately I'm seeing us and advocating for a shift from thinking about infrastructure as something we maintain to something that we strategically invest in as a foundation for prosperity, resilience and importantly, and increasingly importantly, the the national sovereignty aspect to it.
speaker-1: A big message to get out there, isn't it, really? Good luck with all of that.
speaker-0: Mm-hmm. That's all right. I'm not the only one sharing this message. I think many people have got their eye on it now. Yeah.
speaker-1: Look, thanks for your insights, Anne Marie. I really appreciate it and thanks for joining us today. Well, critical infrastructure may rate lower than many headline risks, but as we've just discussed today, it often determines how these risks ultimately play out. To rein Ad Marie's Nexus Weekly Column and subscribe for future podcasts, video and articles, visit Nexus. Until next time, thanks for listening.
speaker-0: Yeah, my pleasure. Brought to you by Nexus, published by GHD, Actionable Foresight.
