Pike Research forecasts continued deployments of Intelligent Transportation Systems despite public sector cutbacks
29 May 2012
|Smart transport investment by sector, world markets: 2011-2017. Source: Pike Research. Click to enlarge.|
The widespread availability of high-speed networks, both fixed and wireless, along with the ability to embed intelligence in physical objects throughout the urban environment and the diffusion of mobile devices that can send and receive real-time vehicle or infrastructure information, is driving the adoption of smart transportation systems in cities across the developed world and in major emerging economies. According to a recent report from Pike Research, these deployments of Intelligent Transportation Systems (ITS) are likely to continue to grow even as public infrastructure spending flattens or even declines in many cases.
Pike forecasts that global investment in four key applications—traffic management systems, smart charging for plug-in electric vehicles, public transportation systems, and vehicle-to-vehicle systems—for smart transportation systems will total $13.1 billion between 2011 and 2017, with annual spending on key ITS increasing from just under $770 million in 2011 to almost $3 billion in 2017.
ITS are typically implemented to achieve some combination of the following smart policy goals, Pike suggests:
- Enhanced mobility
- Reduced emissions
- Reduced fuel consumption
- Improved safety
- Economic competitiveness
Even as governments seek to reduce their debt, ITS will not see significant cutbacks and will, in fact, benefit as transportation agencies seek to optimize their existing infrastructure, rather than fund major new capital projects.—senior analyst Lisa Jerram
The area of heaviest investment in smart transportation will be traffic management systems, which encompass a range of applications, including traveler information, congestion charging, and adaptive signaling. By the end of the forecast period, these systems will be ubiquitous, with virtually every major city offering such a service, according to Pike. What will change over the forecast period is that these systems will become increasingly dynamic, with cities adding alternate route instructions or predictive traffic easement.
As developed country economies slowly begin to emerge from the economic downturn over the next several years, ITS will benefit, Pike suggests—as will all infrastructure investments. A countervailing dynamic will be the increasing pressure on transportation budgets, as governments seek to reduce debt.
However, as this analysis has indicated, ITS will not see significant cutbacks and will, in fact, benefit as transportation agencies seek to optimize their existing infrastructure, rather than fund major new capital projects. The major lingering effect of the recent global recession will be a lower level of investment as the baseline for forecasting for developed countries.
Following traffic management applications, the largest investment will be in smart charging management, due to the projection of plug-in vehicles sales over the next several years reaching 5.19 million annually by 2017. As the penetration of charging equipment increases, it will drive greater investment in smart charging technology that can control and minimize the strain on the grid.
Public transit and V2V investments are a fraction of the total ITS investment, but for very different reasons. The types of public transit ITS that Pike Research tracks for this report are much lower in cost than full-scale traffic management systems. In addition, this market is much more budget-conscious and constrained, and is likely to be focused more on maintaining existing service than rolling out new ITS services. Pike also noted that certain ITS applications have already become standard such as automated vehicle location (AVL) and computer-aided dispatch (CAD). These are not counted in the new ITS investment forecasts for this report.
Rather, the public transit investments will largely be in real-time bus arrival information and other traveler information services, cashless fare collection, and, to a lesser degree, transit signal priority. An additional factor limiting the proliferation of transit ITS is that such systems are typically of value only for medium to large bus systems.
V2V investments, on the other hand, will be smaller due to this application’s fairly long commercialization horizon of at least 5 years. Investments will come from automakers and from a few public agencies, such as the US DOT. In the latter part of the forecast period, the investment level will pick up as the technology becomes commercial and begins to proliferate, according to Pike.
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