Smart electric vehicle (EV) charging, citywide traffic monitoring, real-time traveler information, transit signal priority, and commercial fleet management are all classified as forms of intelligent transportation systems (ITS) or smart transport. What makes them smart is the use of software and wireless communications to connect vehicles to each other and to infrastructure, connecting both to central operational sites, such as city transport agencies or public transportation agencies. The key enabling factor is embedded intelligence, which allows the vehicle or infrastructure to communicate to other transportation assets and to respond to outside management.

Transportation systems can also be considered smart when they are applied to achieve smart policy goals for the urban environment. ITS are typically implemented to achieve some combination of the following smart policy goals:

• Enhanced mobility
• Reduced emissions
• Reduced fuel consumption
• Improved safety
• Economic competitiveness

—“Smart Transportation Systems”

Most of the forecast investment will be in intelligent traffic management systems, as this is the sector with the broadest range of potential applications. It is also the sector that is applicable for all cities and it is expected that interest will grow in developing countries in the latter part of this forecast period.

In the early years of the forecast, Pike Research anticipates that traffic management system investments will go to continued rollout of highly developed applications, such as real-time traveler information systems. By the end of the forecast period, these systems will be ubiquitous, Pike suggests, with virtually every major city offering such a service. The 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, as will all infrastructure investments, Pike finds. Despite the increasing pressure on transportation budgets as governments seek to reduce 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. The major residual effect will be a lower level of investment as the baseline for forecasting for developed countries.

The story for emerging economies, particularly in China, India, and parts of the Middle East and Latin America, is quite different. These countries are engaging in major infrastructure investment as their economies continue to grow. Although any ITS investments will be dwarfed by capital expenditures (CAPEX), it is expected that some demand will occur for ITS to be integrated into new roadways, bridges, toll ways, and other infrastructure components as they are built out.

—Smart Transportation Systems

Pike sees the next largest investment being in smart charging management, due to the forecast of plug-in vehicles sales over the next several years, reaching 5.19 million annually by 2017. Pike Research projects nearly 7.7 million EVSE sales will support those vehicles. 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. Another key driver for this market will be the ability to offer greater services to EV customers, who will be able to charge during non-peak hour rates or specify the use of only renewable energy.

Public transit and V2V investments are the smallest fractions of the total ITS investment Pike forecasts, but for 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 says.

V2V investments 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.

—Smart Transportation Systems

Strong political leadership is required for the creation of comprehensive, multimodal transportation management systems, and more sophisticated forms of ITS—such as vehicle-to-vehicle (V2V) safety technology and smart electric vehicle chargers—according to Pike.