5-25%

The economic return generated for every dollar of investment on a capital project like transport

Economic prosperity depends on transport’s ability to get people and objects from A to B efficiently and investments in transport are sound ones. Indeed, the World Economic Forum estimates that every dollar spent on capital projects like transport generates an economic return of between 5 and 25 per cent.

Conversely, we pay a high price in terms of time, cost, and our health for dysfunctional transport systems. While the industry has, by and large, been able to keep the wheels spinning to date, social, demographic and environmental changes are making that more difficult. The transport sector is at a crossroads as it grapples with how to best respond to the key megatrends of today – climate change, urbanisation, and globalisation – each of which create new and unique challenges. But they also present opportunities for those organisations that can successfully harness new technologies and turn them to their advantage.

Against this backdrop it should come as little surprise that the transport sector has its sights set on transforming itself and is investing heavily in new technologies to meet the challenges that lie ahead. Machine learning, robotics, 3D printing, next generation security and cognitive AI all feature in respondents’ technology roadmaps to some extent, but it is clear that it is IoT that sits at the heart of the transport sector’s transformation efforts.

Which digital transformation areas are being prioritised by your organisation?

95%

95%

IoT

37%

37%

Machine learning

37%

37%

Robotics

29%

29%

3D printing

25%

25%

Next generational security

16%

16%

Cognitive AI

4%

4%

Virtual reality

5%

5%

Augmented reality

When we consider the potential applications for IoT, it is not difficult to understand why the transport sector is prioritising roll-out of this technology, and while some use cases are some years away from hitting the market, others are already making themselves felt.

Traffic jams are an expensive business.

The Centre for Economics and Business Research and INRIX, a traffic data firm, estimate that the total economic cost from road congestion in Britain, France, Germany and the USA could top $300billion annually by 2030, up from $200billion in 2013.

Yet the toll is more than financial, and congested roads can have severe implications for our health. The start-stop traffic in our cities burns more fuel and increases the amount of harmful nitrogen dioxide (NO2) emissions we breathe. London breached its annual air pollution limits just five days into 2017, leading to higher incidents of respiratory infections, heart disease, lung cancer and a host of other ailments. Indeed, the World Health Organisation estimates that more than 2million people die from air pollution every year and that a further 1.25million die annually from road traffic incidents.

To what extent do you agree that without the successful deployment of IoT, organisations in the transport sector could be left behind? (%)

20% Strongly agree
62% Agree
17% Disagree
1% Strongly disagree

It is for these reasons that IoT-based technologies hold much promise for the automotive industry. IoT-enabled Intelligent Transport Systems (ITS) will improve the flow of traffic and remove friction from our journeys, and connected cars and other vehicles will increase safety on our roads and drive efficiencies in the use of fuel.

Singapore, which has incorporated a range of smart technologies in its transport network and uses real-time data collection with location accuracy to help keep traffic running smoothly, stands as a prime example of what can be achieved. These intelligent solutions have helped it become one of the least congested major cities in the world, with an average speed on main roads of 27km/h, well ahead of London (16km/h) and Tokyo (11km/h). Applying these technologies more liberally around the world would be game-changing.

How significant is the use of IoT to your organisation in its ability to achieve a competitive edge? (%)

29% Highly significant
13% Quite significant
6% Not particularly significant
2% Not significant at all

The transport sector is taking an early lead on innovation and these businesses are investing in new technologies that will enable them to tackle the challenges that tomorrow brings. But greater reliance on connectivity and ever vaster amounts of data – which the IoT brings with it – come new security risks and potential vulnerabilities. With that in mind, how well-placed is the sector to address them?

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