Long-Term Investing, Infrastructure and Development

The world needs to close its $1 trillion annual infrastructure investment gap. How?

The importance of infrastructure as a key driver of growth, competitiveness and social well-being is well established. Yet, a significant number of economically viable infrastructure investments are not moving forward.

Short political cycles, short-term investment horizons, a lack of viable financing structures, inappropriate risk assessment frameworks and a lack of long-term vision mean that much
needed investment does not flow to infrastructure and development – causing a $1 trillion annual shortfall towards a $4 trillion demand in infrastructure alone.

Closing these gaps is paramount if the world is to stay on a path to inclusive economic growth and recovery. Enhanced participation from the private sector could do much to close this gap. Read more here.

Related projects

Redesigning Development Finance

The project seeks to address the trillions of dollars in annual funding needed to bridge the financing gap for the 17 Sustainable Development Goals (SDGs) in emerging and frontier markets by demonstrating the benefits of a collaborative funding model (Blended Finance) to attract multiples of new private capital flows into these markets. With a 2030 timeframe to achieve an ambitious SDG agenda, the failure to catalyse public, private and philanthropic capital quickly will result in tremendous humanitarian, social and environmental upheaval.
The project has defined the model and raised awareness for the Blended Finance concept based on consultations with more than 100 institutions and 25 events over the past 2 years. This work has resulted in a common lexicon and framework being defined (Primer), new tools (How-To Guide) and partnerships (Sustainable Development Investment Partnership, Convergence), and the business case being established (Landscape Survey) to facilitate more collaborative financing models that address complex issues and involve a range of diverse stakeholders.
The project will now move into a phase to operationalize and build out these initiatives, extending the leadership position of the Forum by leveraging our unique access to a wide range of stakeholders to scale the growth and effectiveness of these tools and partnerships, and disseminating these concepts to new geographies (Asia, Latin America) while building capacity with public institutions and foundations (workshops, National Planning Framework). This will be accomplished by scaling the level of engagement with institutions using Blended Finance, demonstrating the value and building the operational infrastructure for self-sustaining partnerships such as the SDIP, broadening awareness by hosting capacity building workshops and events in new geographies and with new partners, and by filling the gaps for supportive policy frameworks that facilitate Blended Finance by benchmarking best practices.

Shaping the Future of Impact Investing

Impact investing is an investment approach across asset classes that can reconcile shortcomings in traditional financial markets and create transformative societal impact. The Mainstreaming Sustainable and Impact Investing initiative, established in 2012, has subsequently set a solid foundation for the World Economic Forum’s ongoing work in this sector. However, there is an urgent need to move investors from theory to practice and to foster opportunities for action. Investors are facing a paradigm shift, both in the recognition that old ways of doing business are no longer sustainable from a social and environmental perspective, but also in the growing demands from their current and future consumers, especially millennials and women. They are also just starting to recognize the distinct competitive advantage gained as an early player in the space offering products and services to fulfil this demand. This two year project seeks to catalyse the future of investing by harnessing this shift and driving toward long-term development of the sector. As a concrete example, by deploying the Impact Investing toolkit into the Global Challenge Initiative on Long-Term Investing, Infrastructure, and Development, we can a) unblock certain infrastructure pipelines and b) allow impact investing to scale because of the generally larger ticket sizes associated with infrastructure. The Forum is uniquely positioned to provide positive influence and direction for the traditional investing community, governments, and enterprises with the desire to see an increase in the flow of capital into impact investments.
Through a series of digital and physical workshops and dialogues, and in collaboration with multiple communities, project teams, and Global Challenges, our main areas of focus are:

Strengthening best practice sharing with mainstream investors and target enterprises on how to blend impact with financial return
Finding avenues to scale the assets deployed in impact investing
Mobilizing a range of investors, governments, and impact enterprises to tackle existing roadblocks facing the sector