Economic Rationality and Management of Denetworking in Infrastructure Maintenance

Shrinking and aging societies undermine the economic viability of network-based infrastructure once supported by economies of scale and network externalities. This paper develops a conceptual framing of “Denetworking” as a possible reconfiguration strategy in the contraction phase: reducing dependence on highly asset-specific dedicated networks (e.g., pipes and rail tracks) and shifting service functions to distributed systems or generic shared networks (e.g., roads) while maintaining minimum service standards. Rather than presenting a calibrated optimization model or full life-cycle cost (LCC) estimation, the paper proposes a heuristic decision condition for comparing a “keep” scenario (renew and maintain the dedicated network) with a “shift” scenario (Denetworking) and uses quantitative anchors from public sources to illustrate the associated fiscal and institutional trade-offs. Two Japanese cases are used as contrasting illustrations: physical Denetworking, referring to the reduction in or substitution of dedicated physical network assets, in wastewater services (centralized sewerage to decentralized treatment); and functional Denetworking, referring to the transfer of service functions from dedicated networks to more generic shared networks, in regional mobility (local rail to bus/BRT on the road network). The cross-case discussion suggests that Denetworking may become a rational policy option under certain conditions, particularly when demand density declines near renewal-investment peaks and asset specificity increases lock-in. The paper contributes a conceptual vocabulary and comparative policy framing for discussing infrastructure reconfiguration in shrinking societies and highlights practical issues of timing, cost sharing, phased implementation, and stakeholder engagement.