How can we increase innovation in the transport sector?

The pace of innovation is changing rapidly, with innovations such as autonomous driving that, whilst still some distance away from full deployment, would have seemed the stuff of science fiction ten to fifteen years ago. Considering the challenges of creating a transport system that is safe, efficient, environmentally sustainable and affordable, most would agree that innovation is essential, not least when you consider that our transport system is old and might need costly upgrades or replacement – most motorways are over 50 years old, many railways older still.

The way we communicate, consume media and purchase goods has changed significantly in the past 10 ten years or so; consider that Facebook only started in 2004, YouTube in 2005 and Twitter in 2006, the first iPhone was released in 2007 and the iPad in 2010, the same year WhatsApp was launched. As of July 2016, there are nearly 2.6 million apps and games available in the iTunes App Store and 2.4 million apps available on Google Play as of September 2016, from zero ten years ago. Why then, when we live at a time of unparalleled technological innovation does this not seem to transfer into the transport sector?

Whilst there have been some significant innovations in terms of Google Maps and Streetview, Uber and Waze, plus the various advances in driverless vehicles, for most vehicles and infrastructure, there has been little change. Clearly, one reason behind this is that the cost and lifecycle of digital media and infrastructure are worlds apart; developing an app is comparatively low cost, many people replace their mobile phones every couple of years, whereas the design life and cost of a significant transport infrastructure project are orders of magnitude different. To give an extreme example using Europe’s largest construction project, Crossrail will cost around £14.8 billion to deliver and have a 120-year design life.

That being said, in many cases procurement is a major driver in the levels of innovation implemented on transport projects. Many organisations say they want innovation but resist it in practice.  Whilst the private sector has obvious business drivers for promoting innovation, and those that are truly successful recognise and accept (even encourage) a degree of failure, in the public sector even if at an organisational level there is promotion of innovation, it can be a different case on the ground. What is the motivation of an engineer to deviate from tried and tested products or procedures?

In transport, perhaps more than many other sectors, it can be more  due to the quite reasonable concerns around safety. There needs to be a balance between giving carte blanche to industry to try what they like on the one hand and stifling innovation through overly prescriptive and risk averse processes on the other.

There are some ways in which this can be addressed, for example performance based standards or procurement specifications. Many highway specifications have moved from specifying a specific aggregate towards performance based standards, where if a material can be shown to have specific properties, it can be used, not distinguishing between virgin and recycled aggregates.

Another good example of public procurement is Transport for Wales’ procurement of the South Wales Metro, they have specified the level and frequency of service required and put it out to the tenderers to tell them the best way of achieving this in terms of infrastructure and rolling stock. Examples such as this, and longer term asset delivery contracts can clearly help, where there is sufficient time to implement initiatives and see a return on investment.

Where there is an issue however, is when there is limited time remaining on a contract for the operator to make a return on investment.  Where is the incentive for a contractor in the last year of an asset delivery contract or a train operating company in the last year of a franchise to invest in a technology or initiative that will not produce a return on investment for a number of years? Could there be some sort of payment to them based on savings that would extend beyond the term of the contract, or a split of ownership and percentage investment based on a sliding scale from the start of the contract to the end.

In a recent report[1] Balfour Beatty VINCI propose series of recommendations to improve and encourage innovation and R&D on large infrastructure project, such as implementing outcomes based specification to allow for greater innovation and that contracts should be based on a set of common interests, and a balanced mix of incentives and penalties, to move away from risk transfer, fixed priced contracts.

Above all, there is perhaps a requirement to encourage and promote innovation within the public sector. Nesta[2] give five tips on ways to increase innovation in the public sector, covering ideas such as recruitment, tackling the fear of failure, empowering employees, connecting staff with the beneficiaries and rewarding innovation. It is essential that this happens, not based on some lazy prejudice towards public sector performance, but because whilst the public sector will still control most transport infrastructure spending in the UK, there are likely to be many disruptive technologies and new digital players in the transport sector that will likely have a significant impact on the current infrastructure delivery model. Concepts such as autonomous driving, mobility as a service and intelligent mobility already threaten the status quo. In particular, there is an increasing move towards personalisation in all sectors and placing customer experience and requirements is already becoming a significant concern; added to which are the other technologies such as 3D printing, augmented and virtual reality, robotisation and drones plus unknown future innovations in the digital sector present opportunities and challenges that the public sector have not had to face previously, and they need to be agile and confident to take advantage of them, and to regulate appropriately where required.

Martin Lamb, October 2016

[1] Innovation for the Future. Better delivery of Mega Projects, Balfour Beatty VINCI 2016

[2] http://www.nesta.org.uk/blog/how-motivate-your-staff-innovate-5-tips-public-sector-managers