Infrastructure underpins prosperity, resilience, and quality of life—and it is at a turning point. Rapid population growth, technological breakthroughs, and climate pressures are transforming how societies think about the systems that sustain them. Infrastructure still means roads and bridges (see definition below), but it also includes fiber-optic cables, charging corridors for electric vehicles (EVs), renewable-power plants, and cutting-edge digital networks. Meeting these demands will require a fundamental shift in mindset: Governments, investors, and operators should move beyond silos and embrace cross-sector collaboration to secure the foundations of economic growth and social well-being. As infrastructure sectors evolve, their intersections are becoming just as important as their individual trajectories.
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Alastair Green, Ishaan Nangia and Nicola Sandri are senior partners and global coleaders of McKinsey’s Infrastructure Special Initiative.
To meet the growing demand for infrastructure, McKinsey estimates that a cumulative $106 trillion in investment will be necessary through 2040. Asia is expected to receive more than half of the total infrastructure investment through 2040, driven by rapid urbanization, population growth, and continued industrial expansion.
Learn more about McKinsey’s Global Infrastructure Initiative.
How can stakeholders meet growing demand for infrastructure?
To mobilize capital at the required scale, stakeholders will need clear, practical, and innovative strategies. Policymakers can shape the agenda by prioritizing verticals based on emerging demand, fostering an enabling regulatory environment, and creating conditions that attract private capital. Investors can broaden their scope by pursuing cross-vertical plays and thematic strategies that align with long-term trends. Infrastructure operators can boost efficiency and asset resilience by integrating technology across assets and networks.
The next decade will be a defining one for global infrastructure, and those who act decisively today will shape the future of connectivity, economic growth, and societal well-being for generations to come.
What’s changing about how we think about infrastructure?
The definition of infrastructure is expanding and evolving, driven by global population growth, economic development, and technological advances. Traditionally, infrastructure referred to physical assets such as roads, ports, and bridges. Today, modern infrastructure includes elements that support innovations such as renewable energy, digital connectivity, and electrified mobility. For example, fiber-optic and 5G networks, EV-charging stations, data centers, and smart grids now sit alongside traditional concrete and steel structures. This fundamental redefinition calls for a substantial mindset shift among stakeholders, including governments, investors, and industry operators.
The infrastructure landscape is becoming increasingly complex. Our latest infrastructure research estimates that $106 trillion in investment will be required across seven critical infrastructure sectors1:
- transportation and logistics ($36 trillion)
- energy and power ($23 trillion)
- digital ($19 trillion)
- social ($16 trillion)
- waste and water ($6 trillion)
- agriculture ($5 trillion)
- defense ($2 trillion)
These verticals are not isolated, and their intersections are creating new opportunities for growth and investment. For instance, constructing EV corridors requires coordination among power utilities, highway authorities, and payment platforms for charging stations.
Learn more about McKinsey’s Global Infrastructure Initiative.
How are different infrastructure systems connected?
Infrastructure systems are becoming increasingly interconnected. EV corridors, for example, require coordination among power utilities, highway authorities, and payment platforms for charging stations. Data center clusters, which anchor the digital economy from cloud computing to AI, rely heavily on power and water, demonstrating the convergence of digital, energy, and water infrastructure. Waste, agriculture, and energy are also becoming increasingly interconnected, with farm waste being converted into renewable natural gas to feed electricity back to the grid and power on-site equipment.
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This increasing interconnectedness requires a shift in mindset toward “cross-vertical” thinking. The interdependence of infrastructure verticals is creating new opportunities for growth and investment. For example, data centers require significant power and water to operate, bringing together digital, energy, and water infrastructure. Similarly, the production of sustainable aviation fuel links farm and food waste processing with energy conversion and transport logistics.
This interconnectedness is prompting investors to target cross-vertical opportunities, with 75 percent of infrastructure capital raised in 2023 and 2024 going toward cross-vertical strategies. Investors are exploring opportunities at the intersection of energy, digital, transportation, and social infrastructure.
What role will private capital play in funding infrastructure projects?
Most infrastructure funding does not come from private capital. But private investors are playing an increasingly important role in delivering infrastructure: Private infrastructure assets under management surged from $500 billion in 2016 to $1.5 trillion in 2024. Investors are committing large amounts of capital to single flagship funds, and the mix of verticals seeing investments is changing to reflect the new definition of infrastructure.
Governments also play a crucial role in attracting private capital by developing frameworks aligned with investors’ risk/return mandates. For example, Hong Kong’s Mass Transit Railway system used land value appreciation to fund metro expansions, while Brazil introduced the New Sanitation Legal Framework to attract $128 billion in private investments for sanitation and water supply. Public–private partnerships are becoming more prevalent, with countries such as Egypt, Malawi, and Saudi Arabia adopting them to develop healthcare and educational facilities.
Learn more about McKinsey’s Global Infrastructure Initiative.
What role is technology playing in transforming infrastructure?
Technology is playing a crucial role in transforming infrastructure, with digital technologies, AI, and other emerging technologies driving innovation and efficiency. For example, AI is being used to optimize crew planning, predictive maintenance, and digital signaling in the transportation sector. In the energy sector, digital technologies are helping operators become more efficient, using gen AI tools to simulate grid scenarios and optimize scheduling plans.
In the construction industry, technology is being used to improve productivity, with the adoption of modular construction, 3D printing, and digital project management tools. The use of digital twins is also becoming increasingly prevalent, allowing governments and companies to model and simulate complex systems and infrastructure.
Organizations are also using digital twins to improve decision-making in infrastructure development, allowing for the simulation of different scenarios and the identification of potential bottlenecks. Advanced cooling technologies, such as immersion cooling and liquid cooling, are being implemented in data centers to manage heat generated by high-density computing environments.
How are digital twins used in infrastructure planning and execution?
Digital tools, particularly digital twins, are transforming how governments plan and execute infrastructure projects. A digital twin is a virtual replica of a physical asset or system that integrates real-time data, simulations, and analytics to model complex infrastructure and predict outcomes. This allows decision-makers to test scenarios, evaluate trade-offs, and identify potential risks before committing billions to large-scale projects. These tools can improve capital and operational efficiency by up to 30 percent, helping governments maximize the return on limited investment budgets.
For example, the state of Victoria, in Australia, is developing a digital twin of its physical and social infrastructure. This initiative enables leaders to simulate and compare large-scale projects, assessing variables such as cost, accessibility, energy use, and carbon impact under different population growth scenarios. By running these simulations, the government can prioritize investments that deliver the greatest long-term benefit for citizens while reducing the risk of costly, irreversible errors.
Governments typically build digital twins in stages: First, they create a blueprint that aligns stakeholders and sets priorities, then they develop a base twin with available data, and finally, they layer on advanced capabilities such as AI-driven simulations. Even partial or early-stage twins can generate significant value, for example, by helping agencies anticipate regulatory bottlenecks or identify underground utility conflicts before construction begins.
Ultimately, digital twins are not just visualization tools but decision support systems that allow governments to plan smarter, build more resilient infrastructure, and deliver services more effectively. By adopting them, public sector leaders can break down silos across agencies, accelerate project approvals, and strengthen public trust by demonstrating transparency and efficiency in how infrastructure dollars are spent.
Learn more about McKinsey’s Global Infrastructure Initiative.
What is the role of data centers in infrastructure development, and what’s driving their growth?
Data centers are imperative to power digital progress. At the same time, they represent an important element of physical infrastructure. And increasing demand for data centers produces ripple effects, such as higher demand for grid infrastructure and access to power sources.
The growth of data centers is being driven by the explosive rise in artificial intelligence and high-performance computing workloads. McKinsey estimates that global data center capacity will need to nearly triple by 2030 to meet the compute intensity of generative AI and other advanced applications. This demand surge is creating a race to power AI, where operators are under pressure to expand quickly to avoid bottlenecks in digital infrastructure.
At the same time, the scale and cost of construction are amplifying the industry’s need for investment. Capital expenditures on physical data center infrastructure (buildings, land, and power systems, but excluding IT hardware) are expected to surpass $1.7 trillion by 2030. This reflects not only AI adoption but also broader digitalization trends across industries. With demand far outpacing traditional delivery timelines, operators and investors are competing to deploy capacity at unprecedented speed and scale.
What challenges are confronting the infrastructure industry regarding labor and productivity?
The infrastructure industry faces significant labor shortages, with many regions experiencing an undersupply of skilled workers. For example, the US construction industry had more than 400,000 job openings across different skills in 2023 and early 2024. The renewables sector alone must add about 2.8 million jobs by 2030.
To address these shortages, investors and operators are exploring strategies such as automation, modular methods, and remote-operations technologies. For instance, Germany’s Deutsche Bahn has expanded digital maintenance efforts to speed up inspections, adopting AI-supported camera gates (which automate inspection in rail or transport infrastructure), robots, and measuring systems.
Learn more about McKinsey’s Global Infrastructure Initiative. And check out infrastructure-related job opportunities if you’re interested in working with McKinsey.
Articles referenced:
- “The infrastructure moment,” September 9, 2025, Alastair Green, Ishaan Nangia, and Nicola Sandri
- “Scaling bigger, faster, cheaper data centers with smarter designs,” August 1, 2025, Erikhans Kok, Johan Rauer, Pankaj Sachdeva, and Piotr Pikul, with Dave Sutton and Rawad Hasrouni
- “Accelerating the delivery of tech-focused capital projects,” July 15, 2025, Bill Wiseman, Matthieu Dussud, and Piotr Pikul, with Katy Bartlett
- “Digital twins: Boosting ROI of government infrastructure investments,” July 3, 2025, Alastair Green, Alex Cosmas, and Gayatri Shenai, with Dylan Moore and Nehal Mehta
- “Data centers: The race to power AI,” June 5, 2025, Jesse Noffsinger and Pankaj Sachdeva
- “The cost of compute: A $7 trillion race to scale data centers,” April 28, 2025, Jesse Noffsinger, Mark Patel, and Pankaj Sachdeva, with Arjita Bhan, Haley Chang, and Maria Goodpaster
- “Travel, logistics, and infrastructure: Firms are finding opportunities in technology, changing consumer demographics, and global trade,” February 19, 2025
- “Delivering on construction productivity is no longer optional,” August 9, 2024, Jan Mischke, Kevin Stokvis, and Koen Vermeltfoort, with Birgit Biemans
