In the second of a three-part series, I2S Co-Founder and Director Professor Sara Bice explores the importance of social value creation through infrastructure and how it can be achieved.
‘Social value’ was in stiff competition for 2023 word of the year in I2S’ circles. Whether talking with partners or collaborators, attending international conferences or hosting research workshops, the term arose time and again. Clearly, individuals leading community engagement, project investment and management are all concerned with how their efforts can support and achieve social value.
And rightly so. Trillions of dollars, many of them taxpayer-funded, are being invested in infrastructure around the globe.
But what does ‘social value’ really mean?
Social value encompasses the priorities and preferences that shape communities’ wellbeing relative to environmental, financial and social sustainability.
In other words, social value usually means the ‘soft’ outcomes that go beyond infrastructure’s predominant function.
Attention to social value aims to understand societal preferences and priorities and to take decisions that will deliver community benefits and mitigate negative impacts.
Social value creation can occur through procurement processes, project selection, prioritisation of ‘co-benefits’ and ultimately, via project delivery.
Emerging trends and issues for social value in infrastructure
Infrastructure projects are traditionally assessed in relation to their ability to address known problems, including traffic congestion, flooding, ageing energy infrastructure, underperforming hospitals or social housing shortages. When social value creation is considered, problems are assessed more broadly, placing the wellbeing of communities and the environment at the centre of project decision-making. In the UK, for example, the Public Services (Social Value) Act 2012, requires social value creation to be explicitly considered in public procurement processes. [i] Closer to home, state governments, including Victoria,[ii] have introduced social procurement frameworks, and private sector organisations, including Transurban, commit to social procurement in their supply chains. Social value creation is also being pursued beyond that delivered directly through project delivery, as in the case of Lendlease’s social value target,[iii] advanced through community partnerships.
While the extension beyond the usual considerations of cost, time and quality is laudable, there is no agreement about the best way to quantify and assess social value.
Policymakers–a group we spend a lot of time working with at the Crawford School of Public Policy–for instance, face challenging questions about how to adapt policy and decision-making frameworks to include or prioritise social value creation. There are also questions about the best way to engage communities about social value and integrate their voices early in decision-making.
The infrastructure sector must become better able to demonstrate the social value it is delivering, especially where public money is invested. This vital improvement could support planning and design changes, regulatory reform, and decision-making practices to allocate resources in ways that maximise benefits and return on investment in Australia and globally.
What do we need to know about social value?
As researchers, our team often thinks not just about what we know but also what we don’t know or need to understand better. For us, the important questions around social value include:
-When we talk about ‘social value’ in relation to infrastructure, what do we really mean? How is social value defined and understood in the sector?
-What, specifically, is being generated when we talk about ‘social value creation’?
-How important is it to measure social value creation? What are the most rigorous, meaningful and replicable ways to do this? How important is it to be able to pinpoint certain social value creation to a particular infrastructure project?
-What is the role of policymaking, legislation or regulation in social value delivery from infrastructure? How can policies be structured to compel social value creation from public infrastructure investment?
-How can the social value proposition of infrastructure be maximized?
-Who defines what constitutes social value? How can we ensure that the voices of vulnerable, minority, indigenous or marginalized groups are heard when it comes to what constitutes social value? At what point in the project lifecycle do community members need to be engaged to inform social value creation?
When it comes to social value, these are just a few of the questions we’re looking forward to pursuing in 2024. What would you love to know?
Want to know more about the major issues that will shape the capacity for infrastructure investment and delivery to support sustainable futures? Check out I2S’ 2023 Situation Analysis outlining the six emerging themes I2S pinpoints as vital to sustainable infrastructure futures: Resilience, Social Value, A Fair and Just Transition, Social Inclusion, Cumulative Impacts and Wellbeing.
[i]Watts, G., Higham, A. and Abowen-Dake, R., 2021, November. The effective creation of social value in infrastructure delivery. In Proceedings of the Institution of Civil Engineers-Engineering Sustainability (Vol. 175, No. 4, pp. 167-174). Thomas Telford Ltd.