Challenges and Opportunities for Innovation in the Public Works ...

other nations, there is no U. S. central government department of construction or other agency responsible for
policy in the building industry, so under-reporting of R&D may be marginally more severe in the United States.
Nevertheless, many people have suggested that the U. S. construction industry is lagging, and some go
so far as to argue that U.S. construction and related industries are antiquated and have little real potential for
innovation. It is instructive, however, to recall Charles H. Duell, director of the U. S. Patent Office a century
ago, who advised President McKinley that the agency should be dosed down because "everything that can be
invented already has been."
INSTITUTIONAL FORCES FOR NEGLECT
Several characteristics of U.S. society and government are basically ill-suited to effective infrastructure
development and management. The most frequent result of these characteristics is that we underspend and
underinvest in infrastructure.
U. S. per capita demand for water supplies, the automobile, and disposable materials are extremely high
by global standards, even when corrections are made for relative income levels. These high demands require
high capacity facilities, which then entail more burdensome maintenance and repair requirements. Yet our
political system makes it difficult to assure that funding will be available, so there is a tendency to spend from
capital by allowing facilities to deteriorate more rapidly and then having to refurbish or replace them sooner.
In addition, infrastructures are intrinsically poorly suited to yielding the short term results, particularly
in financial terms, that U. S. business and elected officials favor. Hence, we tend to underinvest. While financial
instruments such as revenue bonds and corporate stocks are available to bridge the gap between long term and
short term interests, they expose the technical concerns of infrastructure to the vagaries of financial markets and
further discourage investment.
A free market system works effectively in principle only when the prices are right for the goods and
services exchanged in that market, and the pricing of infrastructure is notoriously faulty. Infrastructure draws
on natural resources -treatable water, clean air, pristine landscapes---that traditionally have been viewed as
free to all who would capture them, despite early recognition that the herds of a few may overgraze the public
common. Government's role as the primary provider (or at least the regulator) of infrastructure having direct
impact on public welfare has a long-accepted tradition, carrying with it the expectation that general taxes should
offset some or all of the costs. Hence, the direct beneficiaries, users or others, seldom pay the full costs of
infrastructure. In the absence of strong political forces to build infrastructure, this under-pricing also encourages
underinvestment.
Because infrastructure facilities are typically big, geographically extensive, and used by many people,
infrastructure development and operations often have substantial environmental and social impacts. These
impacts have frequently in the past been poorly estimated or neglected in planning and design, and often are
poorly managed within the context of traditional governmental, economic, and institutional relationships. The
rapid expansion of U. S. environmental legislation in recent years has resulted in an "uncoordinated patchwork"
of control requirements that has grown, by one count, from only seven environmental laws enacted in the entire
history of the United States to 1955, to more than 40 by 1986 (Balzhiser, 1989).
These laws, enacted to effect important changes in public priorities, have slowed and sometimes stopped
investments in infrastructure that would have been easily accomplished in prior decades. However, a valuable
consequence is the emerging shift toward environmentally beneficial technologies, more supportive of
"sustainable" economic and social activity.
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