the same as every other firm in our industries.
But I would say that we're a pretty good example.
I think a pretty illustrative example
of how other large engineering and construction firms based
in the US would think about some of these issues
that we're going to talk about.
The second is that there are lots of stereotypes
in our industry, the engineering and construction
industry, about Chinese contractors.
And I'm not very reinforced those today.
And in fact, I want to debunk some of those.
But I do want to ground this all into reality
in the global competitive landscape.
And I'll get to that in a second.
I think a big key takeaway I want everyone
to be aware of, which we'll get to in a few minutes,
is that this is a highly volatile industry
in a really competitive global landscape.
And the sources of funding, the type of tenders,
the type of competitive environment,
you've got a flavor for that, I think, this morning.
It's also been changing over the years.
And this is the reality.
And the question that we're particularly
focused on as a company is, OK, what do we do about it?
What does that mean for us as a company?
And I think you can infer from that some potential policy
implications.
Obviously, from the US foreign policy perspective,
there are some questions around what kind of toolkit
do you want to have.
And I think the examples that we talked about this morning,
and my interest in this whole discussion area,
is really around, what can we learn?
What can we learn about the way our own country approaches
some of these issues and challenges?
So big, broad outlines are not an answer to your question.
This is a huge market.
So in the infrastructure market globally,
there are a lot of different statistics.
The one I use the most is that it's roughly a $3 trillion
a year global market, infrastructure broads,
so the global market.
$3 trillion a year.
Most of that is happening in the developing world
and driven by some unassailable, unstoppable macro trends
such as population growth and growing low class
and urbanization.
So to put that in perspective, the US demand
for infrastructure, just to keep up with what we've got,
is about $2 trillion over 10 years.
So $3 trillion a year for the global market, $2 trillion
a year, or $2 trillion over 10 years here in the US.
So let me come back to, if you guys can pull up
to the first of my three slides, just a couple of things
I want to point out here.
So there is the industry journal that
covers the engineering construction company is called
ENR, Engineering News Record.
And every year, based on revenue, they rank firms.
They rank domestic firms here in the US.
They rank firms that are doing work abroad.
And they rank firms based on it.
It's the kind of squiddly spaghetti chart, if you like.
$43 trillion, $43 trillion.
Thank you.
So just again, I'm using ourselves as an example here.
So walk story short, domestic revenue, the first chart
you're going to see is a ranking of US engineering
construction firms buying revenue over the last 10 years.
And the point that I really want to make here
is I really want to make the point that it's all about change
over time, and it's an indicator that it's a tough, tough
industry, and you can see how vulnerable it is
by the relative change.
So while they're pulling it up, and we'll get up here
in just a second, the point of the slide
is that our company back will spend the number one US
contractor here in the US for the last 10 years or so.
And there are a couple of vendors that come up and down.
But just if you think about each contractor
has a whole domestic market, ours is, as you heard,
transactional, it's very competitive.
If you go to the next slide, the next slide
is about the international E&C rankings.
Let me just do it once I can get up here.
Can we get somebody back there to slide on this?
So yes, I'll just keep going here.
Walk story short, these are rankings of contractors
by revenue that's generated outside their home country.
So you can think of this as sort of an export orientation.
These are highly expeditionary companies,
and this is the revenue numbers based
on how much revenue they're generating
outside their home country.
I think a key point here is that we're the only American firm
on the list, and you can see that there
are a series of, I would say, very expeditionary,
engineering construction companies
who work around the world.
Interesting point here, first is that there
are two Chinese firms that have basically
worked on the list 10 years ago, and are on the list today.
There was some discussion about the going out policy,
and I think you could probably link those two things together.
But I think it's interesting, so again, this is revenue
that's generated outside of your home country,
so this is sort of expeditionary.
I'll go to the next slide, this is my last slide.
So this is top global contractors.
So this is revenue generated both in your domestic market
and abroad.
Now, this is really indicative, I think,
of the competitive landscape and what's
happened over the last 10 years or so, a few takeaways.
First, you can see that there are more state-owned
and more Chinese origin firms, and there are no American firms
on this list today.
So Chinese origin represents seven of the top 10 today,
and they have the top five positions.
There was some discussion around the construction
industrial complex.
I think this is a pretty good visual for that.
That was on the top 10 side of this list,
or 16 of the last 20 years, and we can't even
make a list anymore.
Now, part of that, and this is basically,
look at the change in the scale.
Over the last 10 years, 90 to 10 years, over the last nine
years, the high end of the scale has tripled,
and the low end of the scale has doubled.
We should have this discussion around the size of the pie
increasing infrastructure development, I think,
is a really interesting baseline.
So I think one of the questions that's
going to be a theme as we go through is,
is it a level playing field for firms from anywhere
around the world when competing against, I would say,
aggressively supported state-owned enterprises
who have maybe a different toolkit than we do.
And that's something that we can discuss.
I want to be really clear, this is not whiting.
This is a competitive reality of our business right now,
and that's the landscape in which we're playing.
And this is why, at some point in this discussion,
I'm going to come back and talk about the importance
of active commercial diplomacy and a functioning US exit.
And I'll stop there and get on with the talk.
No, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no,
no, no, nothing happens to fall down.
And to maintain it in the unconsentable,
and new one, and people with ladies and under arms
to collapse in what, and get the core
of a development of a country.
I mean, in a way, America did exactly what the Chinese
were doing now, a lot of years ago.
I mean, we were doing all of this stuff.
And now we have bureaucracies that make it very hard
to get through this.
I think when I saw the chart from your young colleagues,
they said, you know, China comes well integrated.
They come joined up.
And then several times you talked about, what are we here?
Well, we can't even get the x-word apart by the question.
I mean, just tell us a little bit more
what it's like when there's a business
that's dealing in the United States that does not
have a joined up system.
Yeah, I think so.
If I may be comparative, I'll just cover the support.
I would say, so if you take the example we've been talking
about, I guess just a couple of things.
It's both good and bad to be a state-owned enterprise.
It's good that you get lots of government help,
and it's bad that you get lots of government help.
And I would say that geopolitical factors might
become more of an input to the decision-making,
whereas I would say that we get to operate free of that.
It was putting aside, you know, sanctioned countries,
ethical operating environments, SCPA, things like that,
which every good company should want to do.
So I think that's one element.
But the other tricky things, as we talk about,
are when I would say how aggressively a government
advocates or engages in commercial diplomacy
on this Department of Commerce over the last year or so
has been, I would say, more mind-blowing than we
have been expecting in terms of being out and advocating
on behalf of American firms trying to do business over a season.
And I would say that's broadly built, I think,
across a wide range of industries and firms.
The second thing I talk about is export credit agencies,
ECAs, U.S. Exxons, this is where the primary one's here.
So Tuesday, tomorrow, there's a big vote.
The Senate Banking Committee is going
to vote on the same candidates to get U.S. Exxon back
and open for business.
It's an important part of the level in the playing field.
So there are a lot of potentially well-intended
political and intellectual arguments around reform
and why we need something like a US tax.
So the reality is that right now, today,
the U.S. is the only G20 member country that
doesn't have a functioning ECA.
That's just the reality.
So that's a big idea.
I know that the storage market's there,
but we shouldn't do it.
But what the hell are you going to do when 19 out of 20
are doing it, and you're the only guy sitting out there
at the time?
Can I get a little bit of a different perspective?
The question comes.
I think we're going to have to admit
on big, big, complicated projects all the time.
And that starts with the promise that the government has
the capacity to manage a complex tender offer.
What do you see as you survey your global actors?
I mean, are countries capable of undertaking
the complex federal offers?
What's the time when we look at really invested in helping
companies do that?
We've got to pull back on that.
How do you see this?
Yeah, it's a delicate answer.
The answer is it depends.
And I say that only half cheaply, I think.
So if you think about a company like us, part of constraint
is talent.
It's the number of world-class teams
that we can deploy on the project.
So we have to be selective about where we focus those teams.
So definitely, particularly if it's work for or closely
associated with the government, the countries track record
with respect to running large, fair, complex tenders
as they can, but that decision-making process for us,
the kinds of things that we evaluate as part of analyzing
that would be how many mega-projects of this scale
and so of a complexity have they delivered before and had
those mega-processes never on?
Or were there, would it generally be
as if we were apparently a fair process by our peers
to be participated if we hadn't participated?
There are all kinds of correction indices
that we use to evaluate the risk from a potential FCP error
at an expected.
I think that the other thing, and actually, this
is something we've observed with both Chinese lenders,
institutions, and contractors, that we're
able to learn and are approving, but it's something
we look for when we're working with our decision-making
on an experience is, how much outside help and expertise
are they getting?
So there are a host of infrastructure advisory
firms and consultancies and law firms
who will advise, who do this kind of work just like we do.
It's every day of the week, kind of stuff like that.
And so are they getting advice and input
on how to approach a new challenge or new opportunity?
And a common misconception on contractors
is that we want to work for less sophisticated customers.
That's what the best predictors of projects
don't wrong, in my view.
We always want to be working for the most successful customers
that, like us, do this kind of work that take these risks
and know how to manage the risks that want to assign the risks
to the body of the best manager, including the risks
for which a government is better qualified and effective,
for example.
So that's how we think about it.
We don't understand the construction
and the bigger question.
I'll put a more specific answer to your question, too.
So I'll give you some examples of world class
from a government tendering process expertise perspective.
So Ray already mentioned, we really
think that the Australian model works really well.
And you see a ton of private investment flowing in because
of that.
We think that the UK is also a pretty good model.
And then our favorite of them all is right now is Canada.
And a specific example of why it works so well
is that I'll say on infrastructure on Ontario specifically,
where on the agency side tends to be public-private partnerships.
And on the agency side, you have a centralized, experienced,
mega-project delivery professionals
who get to work on these large projects over and over
and over again.
It's a lot like when we work for a large energy company,
and a big project, which is similar at Global Electric P.
So that's a specific example where, again,
a more sophisticated experience team on the government side,
regarding these tenders, I think, is really helpful.
Matt, you mentioned that you're starting
to see the administration push commercial off.
One of our handicaps was that we don't advocate
if there are two companies, two or more companies,
that are competing.
There's somehow the thing that we're
favoring one or the other.
So we tend to be passive.
Whereas if the countries that have state champions,
they're out there like crazy.
How can we get around this phobia, this bias we have,
and somehow we can't advocate for America,
but that's more of the one country that's competing for?
Yeah.
I think it's probably an important value,
certainly to some Americans, plus the government picking
winners and losers.
So I think you can understand where that value's coming from.
At the flip side, one of the specific tools of trade
that we would love to see for the government,
the government agreements that help facilitate
an openness and transparency rule of law and possibility
of contracts and a neutral.
While a sound transaction helps you
get a more relational-based approach.
So that's a specific tool that has worked well
in some instances, where I think it would help more.
And frankly, it makes it easier and more appropriate
for the US government to go and help make interruptions
and help facilitate some of that.
I mean, how do you open this FCPA to the U of America?
It's not at all.
We, frankly, that's the very first screen we go through.
And we look at prospects and where
you might be operating in the world.
If we aren't confident we can operate ethically,
and if our people just won't pursue it,
then we won't go there.
You know, frankly, so we're a leading member of the US
International Council of Businesses, which
helps promote FCPA-type standards and transparency
around the world across industries.
Increasing transparency, decreasing corruption
is a good thing that we feel very passionately about,
because it encourages fair or open competition.
And that's really what drives us.
We want to be able to compete fairly
and be united in our merits.
And by the way, there are situations
where people with all that in place
pursue a specific project, might not
be the right fit for us as a company.
So I think, so I would say that FCPA is not
voting and any good American companies
are going to have that same view.
And it's in our best interest as a nation
and as a set of companies to be advocating for that,
because it helps to help with the client.
This kind of corruption is obviously
in tax on citizens.
It's really very interesting.
But it also does have a curious dynamic.
People back to the 2007, there were very few Chinese companies
that had the level of sophistication of that goal.
And so they couldn't really compete
against who in the premier segment of the market.
But you also can't really compete against them
in the value segment of the market,
because they have lower costs.
It's easier for companies to move up that chain
than it is for companies to move down.
I've seen a lot of American companies
that struggle trying to sell in China,
because they've got a product that they just
price points down to a value segment of the market.
But the local competition learns, and then they move up.
What's really more interesting, is that what's going on here,
or is it real estate financing?
No, I think, and maybe we'll come back
and talk about the students, remember,
in all these industries, it's not just
feedback from the answer that drives the market,
there are private sources of capital, it's all good.
But I'm just notion of moving up or down the value chain.
You know, first, I don't any more accept the premise
that the Chinese firms or solutions are always cheaper.
I think that 10 to 15 years ago, you could have said that,
and it would have been a relatively safe statement.
I think that the way we think about value
and the way that our most successful customers think
about value is instead of thinking about the present day
total solid cost of designing and building a project, right?
And even if it operates this project
for the next 30, 50 years, a better way
to think about it is a sort of net present value
over the whole life cycle of developing, designing,
delivering, operating the asset.
And when you do that way, you get a very different answer.
And then that's not even yet taking into account some things
that we think are differential about the approach
around safety, quality, you know, capital efficiencies,
kind of this notion of net present value,
thinking that the economic, social, environmental sustainability
work, you know, there are many of these,
particularly public infrastructure projects
where a specific intended outcome of the project
is to engage and upskill and deploy
as many local construction workers as you can.
That's a different model.
That's a model that plays really well to a company
like a faculty who use ourselves as a responsible sewer
and wants to differentiate ourselves on that.
But how do you value all that?
How expensive is the exaggeration of project costs
to benefits?
So, you know, I sort of reject the premise
that a traditionally Easter solution is always going
to be cheaper.
In many cases, lower wage rates, that does drive costs.
But that's not always the case.
And then when you look at some of the externalities
that we talked about this morning,
I think we included almost a different answer.
So one of the things that happened,
I mentioned in 2000, I'll pull up on that.
OK.
Again, as a guest, we would like your help
in making re-managing of other sites.
You must give us information to make development.
It helps us improve this trend.
Because obviously, it's good for everyone
in the world who got a good quality
by sparing infrastructure up.
OK.
We're going to have more questions here.
Sorry, I'm going to be very energetic, young,
and I'm going to write it out.
