11-04-2026
What lessons, if any, can government and business leaders learn about building transformative infrastructure from previous eras of innovation?
At the 2026 Cornerstone for Business conference, a historian, operations leader, and an economist discussed how technology demand and its economic benefits will evolve, through the lens of America’s development of canals and railroads.
Moderated by the Daniels School's Kevin Mumford, the panel “Transforming American Infrastructure: From Westward Settlement to the Digital Frontier,” featured historian John Butler, Purdue operations leader Michael B. Cline and Distinguished Professor of Economics David Hummels. The panelists explored how building too fast without forecasting demand and technological innovation led leaders to miss the mark.
Butler explained how New York’s Erie Canal’s success made it an appealing model for Indiana. In spite of a $10 million investment, Indiana failed to replicate the conditions behind its success. New York had an established population ready to use its canal; Indiana proposed routes through sparsely populated territory, Butler said. Political bargaining expanded the undertaking until the state borrowed so much it pushed itself into bankruptcy.
The lesson is to distinguish demonstrated demand from expectations that development will follow construction. A successful project elsewhere does not translate universally.
Butler also cautioned against dismissing community skepticism.
“Maybe the first lesson is trust your voters. Listen to what they’re saying,” he said. “They may have some good ideas.”
Public engagement should test assumptions, not simply sell a predetermined plan. Leaders should also consider smaller commitments rather than betting heavily on forecasts.
Cline, recently announced as executive vice president and chief executive officer for Purdue University in Indianapolis, described public-private partnerships as tools for balancing construction, financing and maintenance risks.
West Lafayette’s State Street redevelopment, now Mitch Daniels Boulevard, illustrates the importance of contract design. The private developer’s pavement maintenance obligation extended for 22 years, creating an incentive to build for durability rather than merely meet an initial construction requirement.
“If you solve that, yes, that’s the first win,” Cline said of the value a "build and maintain" investment addresses. “If you don’t go broke doing it, then that’s the second win.”
Director of Purdue University Center Research Center in Economics Mumford weighed in with a financing caution: “There’s a gap between private and public cost of capital.” In short, what is the difference between potential delivery efficiencies and financing costs for each project? Neither model is always a better value, but Cline emphasized that often, P3 construction and project delivery efficiencies by the private sector more than make up for the higher cost of capital the private sector has access to.
Canal investors did not anticipate how quickly railroads would undermine their business model. Furthermore, as Butler noted, some railroad lines, especially short lines, were later abandoned, another warning against projecting current needs indefinitely.
Hummels, Marshall and Susan Larsen Chair of Economics and dean emeritus, highlighted a difference between transportation infrastructure and computing equipment for today’s data center boom: their investment horizons. Rail beds can endure for generations, while the chips powering data centers — a third to one-half the overall expenditure — will likely be replaced inside of five years.
One consequential distinction the panel made concerned geography. Canals and railroads were intended to give nearby communities valuable market access. Hummels noted that data centers distribute computing benefits broadly, while neighboring communities may bear congestion and energy-related costs.
“The geography of benefits has been inverted,” he said.
That makes construction spending an incomplete measure of success. It’s critical to assess lasting local benefits, public commitments and alternative uses of resources — not just announced investment totals.
Hummels offered one final caution: “Even things that seem like they’re off your balance sheet are still on your balance sheet.” Long-term tax exemptions and financial backstops can commit future resources without taking the form of conventional debt. Calling a project privately funded does not eliminate the need to examine public exposure — or determine who pays if demand falls short.
The panel’s lessons give business leaders, constituents and government officials a framework for wiser data center decisions. Business leaders can challenge growth forecasts, account for technological change and assess whether an investment remains viable if demand falls short. Constituents and government officials can ask who bears that risk and whether lasting local benefits justify the public commitments. Constituents can ask whether lasting local benefits justify the costs and commitments. Government leaders can weigh incentives against alternative uses of public resources and make financial responsibilities explicit. Together they can ensure the next generation of infrastructure has lasting value and that everyone understands who bears the risk if it does not.
Cornerstone for Business is a collaborative initiative between the Mitch Daniels School of Business and Purdue’s Cornerstone Integrated Liberal Arts program. The program connects business education with enduring ideas, ethical leadership, and human-centered thinking to prepare students to lead with both competence and character.
