Forecasts from research company Frost & Sullivan (F&S) project a vision of an increasingly urbanised world and one where mobility concepts are changing. As well as the growth of car sharing, F&S maintains that technology advances will lead to big changes in the provision of mobility services and the growth of multi-modal transportation. And that will create a big opportunity for ‘mobility integrators’. Dave Leggett spoke to F&S partner Sarwant Singh to learn more.
It’s the next Big Thing, in case you haven’t heard. Actually, that’s not quite accurate, it’s already happening, but it’s going to get bigger and more influential. I’m talking about the growth across the world of new so-called ‘Mega Cities’. There’s a rapidly developing new order in the world’s city rankings as the movement of people from developing economy rural areas to the economically more dynamic urban centres gathers pace.
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In 2011, the global population grew to more than 7bn. With a combination of increasing birth rates and people living longer, statistics show that we are adding a billion lives to the world’s population every twelve years (and that period will be diminishing). F&S notes that statistics from the World Bank show that in 2008, for the first time, more than 50% of the global population was living in urban areas. This trend towards urbanisation, F&S says, is forecast to continue, to the tune of 60% by 2030 and 70 percent by 2050, leading to the emergence and ‘dominance’ of Mega Cities (examples: London, Istanbul), Mega Regions (example: ‘Jo’toria’ – Gautang, Jo’burg, Pretoria), and Mega Corridors (Delhi-Mumbai Corridor with a population of 203.57m in 2025.
F&S defines a Mega City as a city with a minimum population of 8m and a GDP of US$250bn in 2025 (it estimates there are 13 Mega Cities in 2011 and a projects 25 Mega Cities in 2025). Mega Regions are cities combining with suburbs or other neighbouring cities to form regions (with a combined population over 15m). And Mega Corridors are the corridors connecting two major cities or Mega Regions (60 km or more apart, and with a combined population of 25m or more).
However, F&S maintains that these expanding and economically fertile urban areas will experience the externalities of pollution and congestion as they grow. As they grow, so does demand for mobility – people and freight. F&S notes that in Europe alone, demand for passenger transport is set to increase by 35% between 2000-2020 and freight movements by 50% over the same period.
Technology though, is something of a game-changer in the field of future urban mobility, helped by the proliferation of increasingly capable portable devices and connectivity platforms. Time-sharing has become much more viable. Real-time information on hold-ups is available now. And us time-poor worker bees all want to avoid traffic congestion. We crave short commuter journey times at a cost-effective price and if we can help the environment too, great. “Attitudes to urban mobility are changing rapidly,” says F&S partner Sarwant Singh. “In the developed world, for example, we can see consumers beginning to be much more receptive to the concept of shared mobility, including vehicles.”
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By GlobalDataThis has seen the rise of numerous car sharing (car club) schemes, a trend that Frost & Sullivan forecasts to grow tenfold in terms of members between 2010 and 2016.
In addition, with increasing environmental awareness, and costs of motoring relative to other modes, public transport, vehicle downsizing, ride-sharing, and even taxi sharing are playing a more important role in the mobility mix.
“One of the key factors facilitating mode shift within these trends is technology,” Singh says. “Key advances in connectivity, communications, payment services, and location-based services are facilitating integrated and interoperable systems within the mobility offering.”
In Singh’s vision, future ‘smart cities’ will offer integrated mobility. It will be multi-modal, with the user able to access Internet-based platforms from apps on a smartphone to work out the best way to get from point A to point B. It might be a mixture of train, bus, car or bicycle – with the user able to choose a preferred solution. Electric cars could be ideally suited to this model.
“Sustainability and low-CO2 are drivers that would certainly favour electric cars,” Singh says. “And we’re already starting to see this with schemes like Autolib in Paris.”
He also cites the growth of ‘Smart cities’. These are cities that place high importance on smart transportation solutions, environmental responsibility, reducing CO2 and are prepared to help with infrastructure like smart grids and good wireless broadband connectivity to support mobile devices. Copenhagen and Amsterdam are cited as being relatively advanced in this respect, but more are expected to follow. “As more examples are created, more cities will want to adopt the best practices,” says Singh.
And there is a sizeable opportunity ahead. Singh sees this ‘urban mobility space’ as a dynamic business area, offering potentially big opportunities to service providers – who may be drawn from multiple sectors. “This is not just a role for traditional transport operators; increasingly, we are seeing a combination of industry sectors such as payment, telecoms, technology services and travel agents combining to offer bespoke mobility offerings with transport operators. This also includes the automotive sector, with OEMs realising they’re no longer in the business of manufacturing and selling cars, but providing mobility services.”
The companies at the heart of the value chain that enable integrated mobility are yet to emerge, but Singh already has a name for them: mobility integrators. These mobility integrators will be able to bring together the various constituent elements including transport operators, telecoms operators, online mobility booking agencies, technology solution providers and payment engines.
Singh is also intrigued by the brand proposition that automotive OEMs can bring. “Some of the big transport operators who are interested in this don’t have brands that the wider population see as strong. But car companies do,” he says. “Automakers around the world are working towards developing a new form of micro mobility to provide solutions to daily short distance commuting. This is an opportunity for them, working in partnership with others.”
The precise business structures have yet to emerge, but car companies are sure to be heavily involved in the future.
“They are already involved in terms of product innovations and looking at new concepts for micro commuting and car sharing,” he says. “They know that as the world’s cities grow, the pressures generated by economic growth, bigger populations and their expanding mobility needs will need to be addressed and the position of the car is central to that. The solutions are rapidly coming into view, facilitated by important advances in technology and connectivity. We’re going to see some major changes over the next ten years, but it’s starting to happen now. By the middle of this decade we’ll see many more examples of integrated mobility solutions in action in cities around the world.”
Frost & Sullivan is hosting a two-day event in London on June 13-14: Urban Mobility 3.0: OEMs New Mobility Offerings and New Business Models Linking Web 2.0
Please also see Frost & Sullivan’s website: http://www.gil-global.com/urbanmobility/
If you are interested in more information on Frost & Sullivan’s event ‘Urban Mobility 3.0: OEMs New Mobility Offerings and New Business Models Linking Web 2.0’, please e-mail Katja Feick, Corporate Communications, at katja.feick@frost.com.
