Engineering Economics Takes Two Hands
President Truman once famously asked for a one-handed economist, because they were always saying “on one hand ... but on the other ...”
Economics really does take two hands: every choice has costs and benefits. And it’s more important than ever to make smart, informed decisions when managing public resources. The pressures utilities face are rising. Information technology, social media and globalization have made our world more connected and bring increased expectations on public agencies.
Engineering and Economics Make a Perfect Pair
Engineering and economics go hand in hand when delivering effective public service infrastructure. Articles in our Two-Handed Economics series explore how we bring an economic mindset to engineering projects in order to offer new ideas and frameworks for planning.
Optimizing the implementation of Capital Improvement Program ensures that projects align with community goals while bringing best value for cost. This process starts by evaluating value and risk for each project or alternative. Identifying how projects add value and reduce risk leads to prioritization and smart, phased implementation.
Understanding the broader relationship between water confidence and local economies promotes more informed and forward-looking decisions on managing water resources. Leveraging high water confidence will help utilities invest in resilient infrastructure and create economic growth. Encouraging confident water consumers will help maintain stability and in the event of an issue, recovery will be that much faster.
Consumer fear can change the way people budget and spend, which in turn can cause revenue gaps for utilities to use towards critical infrastructure needs. Put simply, utilities need to proceed with an informed strategy to target critical elements of systems and investments that reduce the greatest risk in times of tight budgets.