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How entrepreneurs succeed in smart transportation

Category: Insight & Vision
Published: 20/02/2017

As either the entrepreneur of an early stage startup, an independent innovator with a new business idea, or an established public or private business operating in transport keen to keep up with the pace of change, the challenges and opportunities in smart transportation have never been greater. Below are some key considerations that will help all of the afore-mentioned make significant strides in their respective endeavours.

The rise of innovation clusters

Innovation clusters were only a short time ago the preserve of a few “tech centres” and some very forward thinking global cities. Today, however, any credible smart city is working with an innovation centre, while the larger global cities are peppered with a range of niche, academic and commercial innovation and accelerator hubs. Scale, focus, links to global businesses, as well as backing from the government, have become a key part of this formula.

It’s clearly a trend in the making. In Paris, the doors to Station F, dubbed the world’s largest innovation hub, open in April; while in East London, Plexal is set to launch in the spring, helping “startups and corporates come together to design and create the connected products that will improve our lives”. These are both, in terms of scale and ambition, mega-innovation hubs.

“Today, any credible smart city is working with an innovation centre.”

Most universities are also getting involved, offering incubator programmes to equip enterprising students with the requisite skills needed to succeed in this competitive world. Loughborough University has already co-located their new London campus with the above-mentioned Plexal hub, while the University of Warwick has created the WMG facility to sit between academia, innovation and the automotive industry.

The key role of nimble innovators to organisations

Now, many large organisations, in both the private and semi-public/public sectors, are considering the innovator model of partnering, nurturing and directly working with SMEs and creative innovators. The old model, of a well-funded and managed internal research team – or consultants – delivering the required nimbleness and preparedness for a rapidly changing business environment, is increasingly limited in effectiveness. Large corporate research functions may, in fact, do the opposite and lull the organisation into a complacent mindset of “evolutionary” development rather than pending business revolution.

“The need for disruptive thinking is now widespread in industry and government.”

The challenge is to use new, aggressive partners to describe what can be done and what is possible, and preclude conventional thinking. The examples of this paradigm are growing each day: numerous OEMs are in partnerships with academia and industry around the world, including Jaguar Land Rover’s centres in Coventry, as well as London; while the UK’s NHS has created an innovation centre that has now been incorporated into InnovateUK (which also works with a series of Catapults).

The need for disruptive thinking in smart transportation is now widespread in industry and government, even if the ability to comprehend and use these disruptive forces in established, complex organisations remains difficult.

The opportunity of new thinking in mobility

congested roads smart transportation

In the world of mobility, one of the opportunities is to look to the complexity and global nature of our industry and use the myriad of opportunities to truly consider a range of new businesses and strategic alliances, mergers and acquisitions.

“One of Uber’s great successes was to realise that the taxi industry was, while incredibly fragmented, also standardised on a global scale.”

There is currently a consolidation of thought in mobility around the related topics of autonomous vehicles, ride- and car-sharing, new taxi models and Mobility as a Service (MaaS). Many organisations are investing, forming partnerships and acquiring talent and doing so quickly. The fear of missing out to competitors is significant.

But the opportunities to innovate and disrupt in mobility are much wider. One of Uber’s great successes was to realise that the taxi industry was, while incredibly fragmented, also standardised on a global scale. It could – and did – turn this insight into a mobility revolution. The growth in cycling is also one of those megatrends that offers a global scale business an opportunity for business model revolution.

Pain points via traditional transport modes need to be improved

There are significant opportunities around the need to travel, as well as new business models that could make the decision to move – and to which location, more efficient – Almost every aspect of a classical transport journey has a substantial number of pain points that could be improved: congestion, routing, crowding, accessibility, payment, transparency, use of travel time, integration, data sharing and infrastructure planning.

“Almost every aspect of a classical transport journey has a substantial number of pain points that could be improved.”

The public transport industry also generally remains in a standoff with car and ride-sharing operators, as well as regulators. A truly integrated business model that seamlessly combines these modes on mass scale across a city would be a revolution. Mobility as a Service models may begin to address some of these issues, but there are fundamental structural issues in how these businesses could work together.

There is also the realisation that the classic public transport industry, while benefitting from a global investment boom in rail-based services – light, heavy as well as high speed – remains expensive, slow to build and complex.

high speed train smart transportation

In a world of startups, new business models going global (in a few years) and next generation technologies on the horizon, the industry needs to reinvent itself sufficiently quickly to better reflect the needs of those either disrupting the paradigm, or those adapting to it.  Stakeholders should be incentivised – this will be a multibillion-pound industry, after all, and one that favours early adopters and visionaries.

Take charge of your future

Innovative entrepreneurs have numerous opportunities to transform the way we move

And this is already underway. Leading cities are developing innovation ecosystems and forward-thinking businesses are embracing fundamentally new ways of embracing innovation. But this is just the start.

There are numerous opportunities for the creative, determined entrepreneur to work with, improve and disrupt the mobility ecosystem. Pioneers need to think beyond the latest trends in mobility innovation and consider the range of opportunities to thoroughly disrupt the age-old models of travel.