Disruptive innovation in transport – does it lead to doing more with less?

1. THE VIEW Australasian Perspective
Prof Phil Charles
Disruptive innovation in transport – does it
lead to doing more with less?
Phil Charles is Professor of Transport at the University
of Queensland, Brisbane. p.charles@uq.edu.au
http://transport-futures.com
The biggest issue facing transport
professionals today is how to
improve productivity – deliver
more in a constrained resource
environment. As consumers, we are
accustomed to the constant productivity
improvements in technology and
related services that lead to dramatic
price reductions and performance
improvements – otherwise known as
disruptive innovation. Examples include
the car compared to a horse and carriage,
email compared to postal mail, or the PC
compared to mainframe computers.
Can disruptive innovation be part
of the solution to transport budget
constraints? The challenge is that
transport infrastructure and services
are primarily provided and managed by
the public sector, where there are few
examples of disruptive innovation.
Elected officials and top management
are demanding transport professionals
to do more for less. Unfortunately budget
cuts only encourage doing the same with
less, and more than likely results in doing
less with less! And relying on an annual
budget cycle only results in short-term
thinking.
Disruptive innovation means
deploying entirely new technologies and
services to create value and radically
reducing costs while maintaining or
improving services.
In the private sector market forces
drive innovation, as profit is increased
through creating new products and
services that outperform current ones.
These competitive forces and incentives
don’t usually exist in the public sector and
innovation is frustrated by politics and
red tape.
There are many opportunities to
reduce taxpayer funding and deliver
improved levels of service. An example
of a potentially disruptive innovation is
the parking management system being
introduced in Washington, DC. Based
on a smartphone app replacing parking
meters mobile payment systems provide
the ability to vary parking prices based
on supply and demand and increase
revenue, and provide accurate real-time
information to customers.
KEYS TO INNOVATION
So what are the keys to disruptive
innovation in transport?
1. Results focus: carefully and clearly
articulating the priority transport
outcomes, being as specific as possible,
and not constrained by what has been
done in the past. Define the trade-offs,
and consider how they could be
reconfigured. For example, the trade-off
between fares or prices and quality
of service.
2. Pilot program: test new concepts as
carefully designed experiments, using
professional project management to
ensure efficient delivery, and measure
and report performance.
3. Separate Unit: to be successful requires
a separate, lean autonomous unit with
a clear charter, a realistic business
plan, limits to political interference,
access to minimal resources
(capability, systems, funding) and in
the short-term, minimum reporting
requirements. Provide ‘white space for
innovation’ – a buffer from the threats
of special interest groups, rules and
bureaucracy and provide encouraging
top-level support for innovation.
❝
The challenge
is that
transport
infrastructure
and services
are primarily
provided and
managed by
the public
sector, where
there are few
examples of
disruptive
innovation
❞
4. Market focus: choose a specific
market segment to start an innovation
project. Governments are often a
dominant buyer and can shape the
markets they operate in. Choose
where there is greatest potential for
improvement, focus on a key segment
that has the potential for the greatest
impact. It is important to develop and
align appropriate incentives, both
for the public and private sectors, to
achieve the desired outcome.
5. Align stakeholders: ensure affected
stakeholders are aligned with the pilot
program. Where an effort has been
made to involve stakeholders, the less
critical they are likely to be, as they
have a better understanding of the
processes, issues and what you are
trying to achieve.
6. Demonstrate results: the best case
for change is one that has been
argued using scientific research and
valid data.
7. Identify next steps: having run
a successful pilot program the
critical success factor is speed of
implementation. To achieve this
requires identifying the lessons from
the pilot program then setting out
how the program can be scaled to
achieve maximum benefits, including
opportunities for additional revenue
sources, changes needs in regulations
and procedures, and change
management strategy for public and
private sector players.
Disruptive innovation should be part
of the solutions to transport budget
constraints. As transport professionals
it is our responsibility to challenge the
status quo and seek out innovative ways
of delivering more effective outcomes for
reduced taxpayer investment.
NOTE
Further reading:
Sahni, N.,
Wessel, M. and
Christensen, C.
2013. Unleashing
Breakthrough
Innovation in
Government,
Stanford Social
Innovation Review.
62 thinkinghighways.com Vol 9 No 2 Europe/Rest of the World