Sivan Marron Kairi, Product Marketing Manager

Technology in Transportation: Economic and Social Impacts

The future of the global smart transportation market is getting closer. Delivery drones, flying taxis, hyperloops and other futuristic technologies are in development stages and will soon be integrated into smart city transportation systems.

 

In this article we cover:

  • The future of the global smart transport market
  • How transport technology impacts economic growth
  • The societal impact of new transport technologies, such as connected vehicles and the hyperloop
  • Emerging economic paradigms in the smart city

 

Future of the Global Smart Transportation Market

The smart transportation market is rapidly growing and is expected to reach upwards of $100 billion by 2023, and to have an annual growth rate of 9% (according to research by Netscribes).

Technological advances make it possible to gather and analyze data in order to improve existing transport methods. This can be achieved via the Internet of Things (IoT), leveraging the integration of real-time data from Internet-connected devices. Municipalities use this data to make improvements to transportation, for example, to alert drivers to real-time traffic conditions. IoT and big data technologies are being used by municipalities to create smart cities. This is an explosive trend, with over 1 billion connected things being used in smart city projects.

Even more excitingly, new technology is leading to the emergence of completely new forms of transport, such as the hyperloop and new variations on existing modes of transport, such as city-wide bike sharing systems.

 

How Does Transport Technology Impact Economic Growth?

The transport industry was always an essential part of the economy, and a tool used by governments and social planners for economic development. This is even truer in a global economy, where economic possibilities are connected to the mobility of goods, information, and people.
There is a direct correlation between the quality and quantity of transport infrastructure and the level of economic development. Highly connected networks and high-density transport infrastructure can be linked to a high level of economic development. When transport systems are in good working condition, they provide social and economic opportunities, such as increased access to employment, markets, and investments.


Transportation can have three key impacts on economic development: 

 

  • Enablement: the physical capacity to transport goods and passengers is a basic enabler for economic activity. The more routes are available, and the lower their cost and efficiency, the more interactions become possible between economic bodies.

 

  • Operational: improvements in the time required for transport, reliability, and the likelihood of damages or losses have a direct impact on economic activity. Efficient utilization of existing transportation assets and smooth travel of passengers and freight from point to point eliminates economic friction and permit faster development.

 

  • Geographical: the development of transport options gives companies access to a wider market base, connecting them to a global economy of consumption, production, and distribution. Access to a varied base of inputs (parts, raw materials, energy and labor) and wider markets for more varied outputs (intermediate and finished goods) leads to increased productivity.

 

Emerging Transportation Technologies and Their Societal Impact

Numerous projects aim to develop new forms of transportation, some of which seem truly futuristic. These ambitious projects are being developed both by large enterprises, like Amazon, Google, SpaceX, and by small startups, and are receiving growing public interest and support. Below are several noteworthy technologies which are expected to change transportation.

 

Technology

How it Works

Societal Impact

Connected and autonomous vehicles (CAVs)

As autonomous vehicle technology advances, and as on-road trials progress, people are becoming comfortable with the concept of a self-driving vehicle. In 2018 48 major corporations invested in autonomous vehicles.

Autonomous vehicles are expected to be safer than human-driven cars because they can overcome human error and leverage real-time data from integrated city infrastructure and IoT.

Reducing the societal cost of accidents, reducing congestion on roads, reducing fuel costs, travel times and the cost of parking.

High-speed rail networks

Pioneered by the Japanese Shinkansen bullet train, companies now employ technologies to create efficient, high-speed railways. Their high speed makes them a cheaper alternative to planes.

Reducing in oil consumption and use of renewable energy sources, improving economic productivity.

Bicycle sharing systems

Passengers tend to have difficulty getting to or from main transport hubs. In a bicycle sharing system, citizens can rent bikes at the start of their trip and drop them off at the end of their trip. Furthermore, businesses can use electric bicycles to make deliveries and handle other business services efficiently and cost-effectively. Bicycle sharing systems are deployed in numerous cities worldwide.

Research has shown bicycle sharing has a significant positive impact on congestion in large cities, and thus also reduces pollution.

Delivery drones

A few large companies (DHL, Amazon, and UPS) are developing ways to use drones for fast last mile deliveries. Creating fleets of drones is a technological and strategic challenge. Official bodies like the Federal Aviation Authority (FAA) are working with the private sector to establish regulations that can make delivery drones a reality.

Improving delivery services and supporting the growth of E-commerce, reducing congestion and pollution in city centers.

Flying taxis

Both startups and large corporations are developing flying taxis. Uber has declared they will achieve this goal by 2023, with assistance from NASA and other companies. The hope is to build a vehicle that carries passengers, is electrically powered, takes off vertically and flies to its destination.

An example of this technology is the Volocopter, an autonomous electric-powered aircraft, which has been field tested in Dubai. Volocopters are expected to be relatively cheap to operate.

Major potential to improve economic productivity and reduce traffic congestion.

Hyperloop

This is a tube that transports passengers using the physical properties of partial vacuum. Passengers sit in a special pod and glide through the tube. The hyperloop will travel at a speed of up to 700 mph. There are currently hyperloop projects in development worldwide.

Intended to provide a new, cost-effective alternative to passenger flights, reducing the cost and complexity of inter-city transport.

 

New Economic Paradigms Related to Smart City Technology

Smart city technology and infrastructure is giving rise to new economic paradigms, which are simplifying asset sharing, money and service exchange across a city. These paradigms are especially important in dense cities with large populations, where they are having a dramatic effect on the cost and availability of local services, boosting the local economy.

 

Smart Transportation is the New Internet

Over the past 20 years, the Internet has revolutionized society, introducing new forms of communication, commerce and entertainment, creating enormous potential for economic growth. Similarly, smart transportation could be the economic driver of the next 20 years. As the digital and physical converge, and mobility becomes more efficient by an order of magnitude, new economies of geography and scale will emerge. The “global village” of the early days of the Internet will become a physical reality, as individuals and commercial goods move seamlessly between locations, almost as easily as we send emails or navigate the web today.

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Sivan Marron Kairi, Product Marketing Manager

Sivan Kairi is the Mobility Marketplace PMM at HERE Mobility.

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