UBS Global Wealth Management president says the future of US citizens is at risk if we don't repair decaying bridges and outdated transit systems

• Tom Naratil is co-president of UBS Global Wealth Management and president of UBS Americas.
• In this op-ed, he says if the US doesn't invest in next-generation infrastructure, the well-being of our citizens is at risk.
• These investments promote industries of the future and are necessary to ensuring our long-term economic viability.

For many, the term “infrastructure” elicits images of decaying bridges, outdated transit systems, and vulnerable power grids — for good reason. Most of our decades-old physical infrastructure is in need of massive, overdue attention. But as the recent Mobile World Congress demonstrated, the introduction of exciting next-generation technologies means that we must also invest in systems that will propel a modern economy, while simultaneously repairing the bricks-and-mortar infrastructure of the past.

As we saw in the headlines out of Barcelona last week, 5G, AI-enabled connected homes, and smart energy grids are now closer to reality. But these tools will be virtually useless without modernized telecommunications and energy infrastructure. And if we don't continue to innovate and invest both public and private capital, future economic growth and the well-being of US citizens are at risk.

There’s reason to be hopeful, though: First, the private sector overwhelmingly supports public infrastructure investment; and second, it's willing to put its money to work alongside the government.

A recent UBS poll found 90 percent of high net worth investors and 83 percent of small business owners agree government should spend more time and money on improving infrastructure. Roughly one-third of business owners told us they would invest more in their business and 26 percent would expand their business into new markets if Congress passed an infrastructure package, creating jobs and stimulating the economy.

These investments promote industries of the future while improving the environment, which is necessary to ensuring our long-term economic viability. Small business owners and high net worth investors agree: 81 percent of both groups believe infrastructure investments are the key to long-term economic growth.

Take AI as an example: the World Economic Forum expects machines and algorithms in the workplace to generate 58 million net new jobs by 2022. Yet our existing infrastructure is unprepared to support this. The FCC found that US broadband speeds are ranked tenth among developed nations and individuals pay an average $58 per month for broadband, “among the worst in the developed world.” Again, small business owners and high net worth investors are advocates: 45 percent of the former and 44 percent of the latter believe it’s very important that widespread access to high-speed internet be a focus of infrastructure improvements. Without this access, poorer residents of rural areas and tribal lands will fall further behind in educational opportunities and income.

Or look at the potential for clean energy. The International Renewable Energy Agency estimates that the decarbonization of the global energy system can create up to 28 million jobs by 2050. These jobs will require state-of-the-art energy infrastructure to flourish. That’s why 65% of high net worth investors and 61% of business owners want utilities to be a focus of infrastructure improvements.

Even more encouraging, private investors want to actively participate in infrastructure investment. More than half of investors we polled want the government to encourage more private sector involvement in infrastructure.

Private capital and public-private partnerships must be incentivized in several new ways: cutting red tape by mandating an accelerated review process for projects of “national significance”; expanding tax-advantaged investments like private activity bonds; eliminating restrictions on the use of proceeds from the privatization of public assets; and creating a National Infrastructure Fund for major projects, among many other steps.

Importantly, we must also ensure the benefits of these investments are felt as widely as possible. Initiatives like Opportunity Zones (OZs), economically-distressed communities where new investments may be eligible for preferential tax treatment, are a step in the right direction.

OZs could establish a powerful incentive for significant long-term private investment in these communities, which are home to 35 million Americans. Organizations like the Economic Innovation Group estimate the potential capital eligible for reinvestment in OZs could total as much as $6.1 trillion. However, before significant capital can flow into OZs, the Treasury Department must first clarify a number of key issues, including the role that multi-asset funds can play and minimum impact reporting requirements.

There’s little debate that spending is desperately needed to modernize our existing infrastructure and to lay the foundation for a robust economy of the future in which all Americans can participate. Our recent survey revealed widespread belief that US infrastructure is falling behind other countries and that economic growth will slow if Congress doesn't pass a new infrastructure bill. Popular support persists and the investment dollars are waiting to participate. Now is the time for the private sector, Administration, Congress and state leaders to come together to reinvest in our country’s future. Our continued economic expansion and competitiveness depend on it.

Tom Naratil is co-president of UBS Global Wealth Management and president of UBS Americas.

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