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The Mobility Ecosystem: the changing landscape and the need for fresh, new ideas (Part 7: Maximizing Results with Limited Funding)

20 Saturday Feb 2021

Posted by in Alternative Delivery, Asset & Life Cycle Management, Benefit-Cost or BC, Construction, Design, Funding, Intelligent Transportation Systems or ITS, Internet of Things or IoT, Maintenance, Materials, Multimodal Needs Assessment, Needs Assessments, Operations, Partnerships and Collaboration, Performance Measurement and Management, Planning, Program Management, Program or Project Controls, Project Management, Recycling, Relationships, Return on Investment or ROI, Risks, Safety, Scope, Schedule, Budget, Transportation

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There is never enough funding in any organization to meet the needs, much less the wants. The debates to determine funding and how to allocate it are endless and continue to this day at all levels of government (Ryan, 2021). Typically, the effective use of available funding falls to public sector transportation professionals, unless private-sector owners, in conjunction with private sector partners. Thus, it is important to review some analytic tools, methodologies, and aspects for maximizing results with limited funding. These could loosely be considered part of asset management. A more thorough review of asset management, setting a basis, criteria, and priorities, is on the March 6, 2016, article on this website entitled Transportation Asset Management. This discussion merely augments that discussion and is by no means an exhaustive list. In no particular order, these are some of the more important tools, methodologies, and aspects that can help establish priorities and maximize results with limited funding.

  • Asset Management: Every public and private body is under increasing pressure to justify investment and that it is making the best use of its resources. The essence of asset management is to better prioritize resources to optimize outcomes, basically institutionalizing a business-like approach to managing infrastructure—asset management. The ability to retain, retrieve, and analyze increasing amounts of data in recent decades has enabled evidence-based decision-making on a network scale. Made possible by computers and digital technology, other “big picture” analyses are increasingly emerging to include the discipline of sustainability that facilitates decision-making among economic, social, and environmental realms. Performance metrics also began to evolve at the same time as asset management. The result is a fundamental framework for managing resources or assets:
    • Performance measures: what target is desired and achievable
    • Asset:
      • Inventory
      • Condition
      • Utilization
      • Value in dollars
    • Life-cycle cost prediction: estimate remaining useful life
    • Agency or organization cost
    • User cost
    • Trade-off analysis and investment strategies (by combining the above to produce an optimized budget)—criteria to develop needs priorities
    • Develop an emergency fund for unexpected events
    • Develop program including asset needs priorities with available funding

      Asset management is quite literally the best of continuous improvement. That process never ends. More discussion can be found on this website under transportation asset management.
  • Scope, Schedule, Budget: This is closely related to Planning, design, below. Regardless, as a program or project is contemplated, a preliminary and final scope, schedule, and budget must be developed. Tied to the next bullet point, it is common for scope to creep or an ill-defined scope to create problems later on. As such, that can lead to schedule and budget problems later. This is especially prevalent in mega and giga programs and projects. The takeaway: spend the time necessary up front to conduct thorough due diligence, planning, risk assessment, and scoping. It is a lot better and a lot less expensive in time, money, and resources to do it right the first time vice the second or more times. Effective and efficient program or project controls are essential to track changes against the baseline contract of scope, schedule, and budget.
  • Planning, Design: There is no substitute for good, solid planning and design. This in no way discounts good construction, maintenance, operations, materials, and other practices. These can all save or optimize dollars when done right. However, many times problems and opportunities missed can be traced back to the beginning of planning and design. It can be a challenge and take time to get input and reviews from construction, maintenance, operations, stakeholders, and partners. It is worth the effort to do things right or as well as possible at the beginning. Otherwise, time and money will be expended later and opportunities will likely be lost. More broadly, open-source engineering can be more valuable economically and in terms of building on standard design specifications. Thus providing more cost-effective projects, more innovation, improved quality, and scalability. (Shepherd-Smith, 2021).
  • Needs Assessments, Criteria, and Priorities: This may appear obvious, and as stated above it is discussed in more detail in other blogs. Regardless, this process is essential in setting priorities for what to do first, second, third, and so on in spending on the highest priorities. While many governments do this, all do not. The larger, more capable governments tend to do this a lot more than smaller governmental, typically more rural, cities and counties. This typically manifests itself in state departments of transportation doing thorough needs assessments while smaller, less populated cities and counties have neither the staff or funding to do this. This can be a problem. This can be similar in non-highway modes. One solution is to generate one multimodal needs assessment for states, cities, and counties. To gain consensus on such a mechanism would be Herculean but not impossible. As it is, each entity has its own way of identifying needs and setting priorities and the challenge increases as governments establish “formulas” in an attempt to equitably distribute funding to the highest needs. This manifests itself in several ways such as donor and donee states relative to the federal Highway Trust Fund, earmarks depending on the power of elected officials, competitive grants which typically leave out smaller, more rural communities, and others. These are all an attempt to do the best we can but they also fall short. The net result—the inability to fund the highest needs. While it is true that federal and state highways carry the vast majority of traffic, the needs of rural communities are of equal importance. So, the idea of a multimodal and multigovernmental needs assessment should be aspired to if not accomplished. There are some rare examples of similar efforts in other areas that have been successful such as the State of Iowa developing one common state-city-county design manual. Also, the State of Nebraska requires an annual needs assessment (with inventory, standard criteria, inspections, estimated scope and cost, etc) for their state highway system so that the state legislature has a target to determine funding. Uniquely, Nebraska law has a variable fuel tax that adjusts the state fuel tax to meet that funding, regardless of impacts such as decreased fuel consumption due to pandemics or other unforeseen events. A system that effectively prioritizes limited funding to address the needs of one seamless transportation/mobility system would be invaluable to our society vice each governmental entity struggling on its own. While this may never be achieved, it is worth aspiring to.
  • Design Exceptions, Practical Design, and Least-cost Planning: Until perhaps the last two decades, the standards for planning and design were fairly rigidly followed, partly due to liability risks of not doing so. That is understandable because of the importance of standards. However, as funding continues to be tight as needs grow, exceptions have increasingly been made. This evolution began as design exceptions to established standards, to somewhat broader exceptions termed practical design, and that has evolved into more recently termed least-cost planning. The core purpose of all is to maximize results with limited funding where a high proportion of benefits can be gained while accepting little or no additional risk. These are of course highly scrutinized for approval but can save considerable dollars. One mega program in Oregon had 275 design exceptions which saved $683 million.
  • Alternative Delivery Methodologies: Alternative delivery methodologies have been around for decades in the form of contracts of which the U. S. Army Corps of Engineers has been one of the more innovative. In 1993 the Design-Build Institute of America (DBIA) agreed upon the term design-build and its use among transportation agencies began to accelerate. Originally established to save time, not money, design-build projects have evolved to save time and money (Figure 8). Other integrated delivery methodologies have also begun to emerge such as design-build-operate, design-build-operate-maintain, construction management-general contractor, public-private-partnerships, and others, each designed for a specific purpose in saving the owner time, money, level of oversight, or all three. The key is that integrated delivery teams can work together, resulting in time and money savings for the owner. Embedded is risk and who has it, but that’s another subject that warrants a paper on its own.
FIGURE 8. Design-build compared to other project delivery methods. Source: DBIA, n.d.
  • Materials: This may seem out of place but it is not. High-strength steel is a good example of allowing wider gaps to be spanned with fewer vertical supports and girders. Superpave asphalt mixes compete effectively with concrete depending on the costs of oil, cement, and other commodities. Likewise, steel can compete against concrete and accrue savings. Fiberglass reinforced-polymer girders and other corrosion-resistant features have also been employed to extend the design life of bridges to at least 100 years (Knapschaefer, 2021). 3D printed bridges and other structures can save on time and labor (U.S. Bridge, 2021).
  • Recycling: Recycling is about saving resources and money. Asphalt, concrete, and steel are regularly recycled by owners and construction contractors, through both on-site and off-site processes. Depending on the strength, bridge girders are utilized on other bridges as appropriate. Old rail cars have been recycled as low cost-culverts where appropriate. One of the more innovative recycling methods being studied is to use old wind turbine blades in bridges as well as buildings, etc., rather than placing them in landfills (Stone, 2021).
  • Engineering Economics: This tool has been around for over 100 years but continues to be relevant although other tools now supplement it and can lead to other conclusions.
  • Life Cycle Costs: This tool has been around for over 100 years although it has been refined during that time. As our perspectives have increasingly become long-term versus short-term or a human lifetime, the life cycle of infrastructure, vehicles, and other assets have taken on additional meaning relative to least-cost decision-making. Therefore, the life cycle cost of any asset is critical to know.
  • Return on Investment (ROI): Commonly known as ROI, this is another analytical tool that can have myriad perspectives. That is the ROI in economic terms, jobs created or sustained, environmental values, social values, and so forth. Regardless, knowing the return on dollars expended is a critical part of decision-making.
  • Benefit-Cost (BC): Benefit-Cost is commonly assessed as a ratio, normally calculated in dollars. Frequently shown as an equation such as a BC ratio of 3:1 or B/C and if the numerator or B is greater than the denominator, then it is concluded to be a benefit. If the numerator or B is less than 1 it is considered a net cost and not a benefit. Nonetheless, this is another important tool in determining investments.
  • Economies of Scale: This is a methodology that can provide a return on scale. For example, “bundling” projects within a region can reduce mobilization and material delivery costs. Conversely, breaking projects up has the potential to increase competition and reduce costs. While this is not a new concept, it is valuable. The term “bundle” is a relatively new term and is now commonly used. Previously, other terms such as “tied projects” were used to describe the same methodology. Buying materials, equipment, and other assets at scale can also provide economies of scale and reduce costs.
  • Multimodal Needs Assessments: Typically, needs assessments have been done by asset or mode with critically important and useful outcomes. As mobility has become increasingly multimodal, the question has become how to conduct needs assessments across all modes. Multimodal planning is common but multimodal needs assessments are largely qualitative, not standardized, and not widely accepted. One of the outcomes in the absence of good, repeatable, and reliable multimodal needs assessments is that funding (federal and state) is distributed based on modal assessments, dominated by highways and bridges, and then a somewhat subjective assessment of how to distribute dollars to each mode. Until we achieve a truly standardized multimodal needs assessment with specific criteria, allocating funds to other modes (such as transit and pedestrians) will be a challenge. Generally, transportation is not a particularly partisan topic at governmental levels, partly because it provides objective information to help determine what funds can or will be appropriated and what the long-term implications may be. This is critical for the built environment in which we live.
  • Operations and Intelligent Transportation Systems (ITS): ITS was one outcome of advancing digital technology. What this allowed was the transportation system to be instrumented with sensors that provide data and information, especially on volume and speed, to a central office that can more quickly and effectively assess and respond to congestion and issues stemming from traffic congestion, crashes, and other incidences. Advanced Traffic Management System (ATMS) is used for traffic management and control and accounts for the most revenue in the overall ITS market. Although the benefit-costs of ITS vary widely from 2-9:1, others exceed 100:1. One ratio used for comparing ITS to more infrastructure is 8:1, a methodology to get more capacity from the existing roadway. The prudent use of ITS technologies can achieve greater benefit at less cost than more concrete, asphalt, and steel. Related, vehicle pricing systems such as electronic toll collection, congestion pricing, vehicle miles traveled, and other road user charging systems can be cost-effective. In addition, transport and supply chain service providers are seeking cost-effective solutions that ITS can provide to boost their productivity, performance, and profits. On e example developed early in Nebraska was a statewide oversize-overweight permitting system that allowed truckers to efficiently route their trucks and cargo and became an effective decision-making tool.
  • Internet of Things or IoT: There are benefits to be gained throughout society by leveraging IoT, including in government, and new opportunities are continually being uncovered to improve services and efficiencies (Center for Digital Government, 2019; AT&T, n.d.; ServiceNow, n.d.; Descant, 2019).
  • Partnerships and Collaboration: It is virtually impossible for any organization to have all the talent, tools, and resources to optimize returns for society, the economy, and our environment. As such, partnerships and collaboration are keys to leveraging the unique strengths of an organization. This is not a new concept, but like the exponential growth of our 4th Industrial or Digital Age, the need is greater than ever before. These strategies continue to grow (Salesforce, n.d.).
  • Program and Project Management: Good program and project management begins and ends with good leadership. The team is all-important since they are the ones that get work done. As such, good leadership can make a team better while bad leadership can destroy a team. This easily translates to improved or decreased performance, costs, and profits. This topic is also discussed in other blogs on leadership, program, and project management on this website. There are many articles and books on program and project management, one of the most prolific and best is Robert Prieto who publishes regularly in PM World. He also authored one of the most comprehensive books on the subject, “Theory of management of large complex projects” (Prieto, 2015). Also, review PMWorld Journal, https://pmworldjournal.com/welcome, and the Project Management Institute (https://www.pmi.org).
  • Risk Management: This is the identification, evaluation, and prioritization of risks followed by methodologies to minimize, monitor, and control the probability or impact of unfortunate events or to maximize the realization of opportunities. The U. S. transportation industry has enormous risk exposure and among the most risk-prone industries in the world. As such, the federal transportation law—Moving Ahead for Progress in the 21st Century Act, or MAP-21, and signed into law in 2012 (FMCSA, n.d.)—established the requirement for states to develop a risk-based asset management plan. Risk management is a dynamic process and used routinely within the public and private sectors. Without such plans, organizations can be surprised by events with negative financial impact or miss positive opportunities with improved outcomes. The literature on risk management is rich and continues to evolve.
  • Strong Relationships: This is another topic that might seem odd within a discussion of maximizing results with limited funding. However, the adage “a good relationship can make a bad contract better while a bad relationship can make a good contract worse” reflects the importance of strong relationships. It is common to have disputes but resolving them in a fair and amicable way while preserving the all-important relationships is critical. No one really wins when disputes move to litigation. This topic is further discussed in other blogs on this website, including the importance of trust.
  • Safety: This may seem an odd topic within the topic of maximizing results with limited funding but the cost in lives, injuries, and property damage is staggering. As has been stated, virtually every transportation organization has the safety of their employees and traveling public as their highest priority. One of these efforts to improve safety, although for NASCAR racing, has important implications for the traveling public (Midwest Roadside Safety Facility, n.d.; Wikipedia, 2021). The work towards a safer built environment will likely never end.

This is by no means meant to be an exhaustive list and is only intended as a sample. The search to reduce costs is part of continuous improvement and that never ends. There are some very simple changes that cumulatively can have huge impacts including the use of LED bulbs in traffic signals and buildings, the use of highly reflective tape rather than electric lit signs, shutting off computers during overnight hours, and so on. This, again, is in no way a substitute for sound and skilled planning, project development, design, construction, maintenance, and operations, all of which continue to evolve and improve within their own discipline.

The Biden Administration recently announced through their Infrastructure for Rebuilding America grants or INFRA some of the above tools and methods as part of their criteria in addition to other related criteria such as climate change, environmental justice, and racial equity (Ichniowski, 2021). Still, other technologies are being advanced with their own inherent efficiencies (New Hampshire Union Leader, 2021; VIA, n.d.; LeBeau, 2021; Danko, 2021; Ewoldsen, 2021). Other technologies that may seem a bit far-fetched continue to advance and may be part of a transportation future and at less cost (Levy, 2021; Subin, 2021; Halvorson, 2021). Still, other areas are advancing, including space, and may well have cost-effective impacts on our futures on earth (Adams, 2021; Hughes, 2020).

Citations

Adams, R. D. (2021, January 21). AI spacefarers and cosmic testbeds: robust robotic systems forge path for human space exploration. TechRepublic. Retrieved February 20, 2021, from https://www.techrepublic.com/article/ai-spacefarers-and-cosmic-testbeds-robust-robotic-systems-forge-path-for-human-space-exploration

AT&T (n.d.) Creating Better Communities. Government Technology. Retrieved February 20, 2021, from https://media.erepublic.com/document/GT18_HANDBOOK_ATT_Slides_V.pdf

Center for Digital Government. (2019). IoT innovation: how government is uncovering new opportunities. Center for Digital Government sponsored by Cisco. Retrieved February 20, 2021, from https://media.erepublic.com/document/CDG18_WHITE_PAPER_Cisco-IoT-NewOps_V.pdf

Danko, P. (2021, February 3). Arcimoto’s latest stock surge gives it $1B market cap. Portland Business Journal. Retrieved February 20, 2021, from https://www-bizjournals-com.cdn.ampproject.org/c/s/www.bizjournals.com/portland/news/2021/02/03/arcimotos-market-cap-1b.amp.html

DBIA. (n.d.). Why choose design-build? Design-Build Institute of America. Retrieved February 20, 2021, from https://dbia.org/what-is-design-build/

Descant, S. (2019, October 29). Chicago collaboration looks to redefine modern transportation. Government Technology. Retrieved February 20, 2021, from https://www.govtech.com/transportation/Chicago-Collaboration-Looks-to-Redefine-Modern-Transportation.html

Ewoldsen, B. (2021, January 21). New mobility services combined with transit show potential to further accessibility, efficiency, equity, safety, and sustainability. Transportation Research Board. Retrieved February 20, 2021, from http://www.trb.org/main/blurbs/181729.aspx

FMCSA. (n.d.). MAP-21 – moving ahead for progress in the 21st century act. Federal Motor Carrier Safety Administration. Retrieved February 20, 2021, from https://www.fmcsa.dot.gov/mission/policy/map-21-moving-ahead-progress-21st-century-act

Halvorson, B. (2021, February 15). Toyota claims the 2021 Mirai fuel-cell car cleans the air, calls it “minus emissions.” Green Car Reports. Retrieved February 20, 2021, from https://www.greencarreports.com/news/1131268_toyota-claims-the-2021-mirai-fuel-cell-car-cleans-the-air-calls-it-minus-emissions

Hughes, O. (2020, November 25). To the moon and beyond: the robots that are blazing a trail for human space exploration. TechRepublic. Retrieved February 20, 2021, from https://www.techrepublic.com/article/to-the-moon-and-beyond-the-robots-that-are-blazing-a-trail-for-human-space-exploration

Ichniowski, T. (2021, February 17). Biden administration adds new climate objective for INFRA grants. Engineering News-Record. Retrieved February 20, 2021, from https://www.enr.com/articles/51239-biden-administration-adds-new-climate-objective-for-infra-grants

Knapschaefer, J. (2021, January 25). Novel fiberglass birders extend life of Maine bridge. Engineering News-Record. Retrieved February 20, 2021, from https://www.enr.com/articles/51086-novel-fiberglass-girders-extend-life-of-maine-bridge

LeBeau, P. (2021, February 10). United Airlines orders electric vertical aircraft, invests in urban air mobility SPAC. CNBC Evolve. Retrieved February 20, 2021, from https://www.cnbc.com/2021/02/10/united-airlines-orders-electric-vertical-aircraft-invests-in-urban-air-mobility-spac.html

Levy, M.G. (2021, February 12). Researchers levitated a small tray using nothing but light. Wired. Retrieved February 20, 2021, from https://www.wired.com/story/researchers-levitated-a-small-tray-using-nothing-but-light/

Midwest Roadside Safety Facility. (n.d.). The safer barrier. University of Nebraska-Lincoln. Retrieved February 20, 2021, from https://mwrsf.unl.edu/saferBarrier.php

New Hampshire Union Leader. (2021, February 15). State-of-the-art traffic signals installed at 17 Dover intersections. New Hampshire Union Leader. Retrieved February 20, 2021, from https://www.unionleader.com/news/safety/state-of-the-art-traffic-signals-installed-at-17-dover-intersections/article_672c26f7-cfcb-5ea2-bd9f-befb1a46d840.html

Prieto, R. (2015). Theory of management of large complex projects. Construction Management Association of America. Retrieved February 20, 2021, from https://www.researchgate.net/publication/299980338_Theory_of_Management_of_Large_Complex_Projects

Salesforce. (n.d.). Accelerating government innovation through collaboration. Salesforce. Retrieved February 20, 2021, from https://media.erepublic.com/document/GOV19_BRIEF_Salesforce_01_V.pdf

ServiceNow. (n.d.). Redefining service delivery for citizens: best practices and a checklist for success. ServiceNow. Retrieved February 20, 2021, from https://media.erepublic.com/document/ebook-government-modernizing-csm.pdf

Shepherd-Smith, P. (2021, February 10). Open source engineering has a role to play in digital transformation. New Civil Engineer. Retrieved February 20, 2021, from https://www.newcivilengineer.com/opinion/open-source-engineering-has-a-role-to-play-in-digital-transformation-10-02-2021/

Stone, M. (2021, January 8). Today’s wind turbine blades could become tomorrow’s bridges. Grist. Retrieved February 20, 2021, from https://grist.org/energy/todays-wind-turbine-blades-could-become-tomorrows-bridges/

Subin, S. (2021, February 14). Why one big Wall Street banker is betting flying taxis will replace helicopters. CNBC Evolve. Retrieved February 20, 2021, from https://www.cnbc.com/2021/02/14/why-wall-street-banker-thinks-flying-taxis-will-replace-helicopters.html

Thomas, R. (2021, January 29). Lawmakers offer competing priorities for infrastructure plans. The Hill. Retrieved February 20, 2021, from https://thehill.com/policy/transportation/infrastructure/536595-lawmakers-offer-competing-priorities-for-infrastructure

U.S. Bridge. (2020, March 24). The future of 3D printed bridges and construction. U.S. Bridge. Retrieved February 20, 2021, from https://usbridge.com/the-future-of-3d-printed-bridges-and-construction/

VIA. (n.d.). Reimagining how the world moves. VIA. Retrieved February 20, 2021, from https://ridewithvia.com/?utm_source=pardot&utm_medium=email&utm_campaign=newsletter_february_2021

Wikipedia. (2021, January 24). Safer barrier. Wikipedia. Retrieved February 20, 2021, from https://en.wikipedia.org/wiki/SAFER_barrier

The Mobility Ecosystem: the changing landscape and the need for fresh, new ideas. (Part 4: Economics of Autonomous Vehicles)

06 Saturday Feb 2021

Posted by in Autonomous Vehicles, Business Transformation, Clean Energy, Collaboration, Connected and Autonomous Vehicles (CAV), Dynamic Transportation Management, Economics, Electric Vehicles, Future, Government & Policy, Internet of Things or IoT, Mobility, Mobility as a Service, Mobility Ecosystem, Relationships, Ride Sharing, Safety, Smart Cities, Society, Strategic Planning, Technology, Transportation

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Motorized vehicles began with the advent of electric vehicles as evidenced by the first recorded powered vehicle fatality in the United States in 1899, from an electric taxi (see Part 2 of this series). Technology advances in the intervening 100 plus years have given rise to fully autonomous vehicles which are on the horizon.

The summary (abstract) provided by Clements and Kockelman (2017) is superb and provided in full.

“Connected and fully automated or autonomous vehicles (CAVs) may soon dominate the automotive industry. Once CAVs are sufficiently reliable and affordable, they will penetrate markets and thereby generate economic ripple effects throughout industries. This paper synthesizes and expands on existing analyses of the economic effects of CAVs in the United States across 13 industries and the overall economy. CAVs will soon be central to the automotive industry, with software composing a greater share of vehicle value than previously. The number of vehicles purchased each year may fall because of vehicle sharing, but rising travel distances may increase vehicle sales. The opportunity for heavy-truck drivers to do other work or rest during long drives may lower freight costs and increase capacity. Personal transport may shift toward shared autonomous vehicle fleet use, reducing that of taxis, buses, and other forms of group travel. Fewer collisions and more law-abiding vehicles will lower demand for auto repair, traffic police, medical, insurance, and legal services. CAVs will also lead to new methods for managing travel demand and the repurposing of curbside and off-street parking and will generate major savings from productivity gains during hands-free travel and reduction of pain and suffering costs from crashes. If CAVs eventually capture a large share of the automotive market, they are estimated to have economic impacts of $1.2 trillion or $3,800 per American per year. This paper presents important considerations for CAVs’ overall effects and quantifies those impacts.”

See Table 1 for a summary of the economic impacts of autonomous vehicles.

TABLE 1. Table 1. Summary of economic effects (industry- and economy-wide) (source: Clements, L. M. and Kockelman, K. M., “Economic effects of automated vehicles”, Transportation Research Record: Journal of the Transportation Research Board Volume 2606, Issue 1, January 2017, pages 106-114)

In the columns headed “Dollar Change in Industry” and “Percent Change in Industry,” signs “+” and “-”, respectively, denote a gain and a loss for the industry, whereas the industry-specific total for the dollar change in industry is the sum of their absolute values. Figures in the “$/Capita” columns and provided as overall total represent the sum of net economic benefits enjoyed by consumers.

According to an estimate by Intel Corporation and Strategy Analytics, announced in June 2017, the economic effects of autonomous vehicles will total $7 trillion in 2050 (Figure 6). The dollar amount represents a newly created value or a new ‘passenger economy’, calculated based on the assumption that fully automated Level 5 vehicles will be on the roads by 2050.

Figure 6. Global service revenue generated by autonomous driving in 2050 (US$ millions) (source: Lanctot, R. Strategy Analytics, Accelerating the Future: The Economic Impact of the Emerging Passenger Economy, June 2017)

They also assumed that consumers and businesses will use Mobility-as-a-Service (MaaS) offerings instead of owning cars, and those who had been commuting to work by car will become passengers and spend the commuting time doing something else. Furthermore, transportation companies suffering from a serious labour shortage – such as long-haul truck operators and home delivery service providers – will introduce autonomous driving services, thereby enabling them to change their business models drastically. As such, the estimate reflects a very broad range of potential effects, which also include a wide variety of new commercial services such as onboard dining and retailing (Tomita, 2017).

Advancements continue almost daily. CNN Business (Farland, 2020) reports a self-driving and electric robotaxi from Amazon’s Zoox can travel up to 75 mph and never has to turn around, reversing directions as needed to navigate crowded city streets. In an effort to become a leader in this sector, China is advancing autonomous vehicles quickly, including fully autonomous highways (Metha, 2019; KPMG International, 2019).

There are a myriad of challenges to realize fully automated vehicles and that will require an accumulation of massive quantities of data and learning processes to enable the development of AI capable of coping with navigating the rules, laws, traffic control devices, unique infrastructure, and nuances in each city, county, and state, not to mention internationally. Moreover, developing soft infrastructure, including laws and regulations, and setting rules for liability arising from accidents involving autonomous vehicles will be challenging. Similar to the open ITS architecture established by USDOT, there is a need to establish AV architecture within the U. S., if not internationally.

The advent of fully automated driverless vehicles will have a tremendous impact on our society, bringing fundamental changes to the entire economic and social systems. When fully automated vehicles come into operation, they will become a major means of mobility for the elderly and infirmed in rural areas, in addition to agriculture uses. Urban areas will likely experience the greatest changes, the number of cars owned for personal use will drop, eliminating congestion and the need for parking spaces, and car-sharing services will continue to grow.

Companies are investing enormous money in both electric and autonomous vehicles. For example, Microsoft is investing $2 billion in Cruise, that is majority owned by GM, for a valuation of over $30 billion (Colias, 2021). Apple and Hyundai-Kia are planning to start production of a fully autonomous electric car in 2024 (Lebeau, 2021). It is interesting to note that the smart phone market is about $500 billion annually of which Apple has roughly one-third of that market. By contrast, the mobility market is about $10 trillion annually so Apple would only need two percent of that market to match their iPhone business. It is little wonder the interest in the autonomous and electric vehicle space.

Although some estimates are that it will be at least 2040 before fully autonomous vehicles will be dominant, how should we cope with these forthcoming changes? How should we redesign and change the urban and rural infrastructure and landscapes, land use, and the economic and social systems?

There are test beds spreading around the nation in an effort to bring these and other technologies to market—Contra Costa County California formed a Transportation Authority (CCTA) and developed the leading facility in the nation—GoMentum (https://gomentumstation.net), the University of Michigan established Mcity some years ago (https://mcity.umich.edu), Waymo is planning a test facility in Ohio (Moderation Team, n.d.), and Missouri just formed a Missouri Center for Transportation Innovation (https://mcti.missouri.edu). These test beds, and other efforts, reflect the drive toward an autonomous and safe mobility ecosystem future. What do they have in common? They are built on partnerships and collaboration. Of course, the National Academies Transportation Research Board (https://www.nationalacademies.org/trb/transportation-research-board), U. S. Department of Transportation, state departments of transportation, universities, and the private sector represent the best minds around and continually add to our body of knowledge on all aspects of mobility and transportation.

Autonomous marine, freshwater, river, air, truck, and train vessels

This discussion does not even mention other modes and types of autonomous vehicles such as marine, riverine, freshwater, trucks, trains, planes, drones or unmanned aerial vehicles, aircraft, or space craft. Although they share many of the same challenges as cars and similar vehicles, many of these are likely years away before widespread use. Nonetheless, they are on the horizon. Of course, the elimination/reduction of operators will require careful planning to help people find other jobs in addition to negotiations with unions, changes in business models, and changes in society. The following links provide more information on these topics.

“What Will the Autonomous Ship of the Future Looks Like?” Smithsonian Magazine: https://www.smithsonianmag.com/innovation/what-will-autonomous-ship-future-look-180962236/

“The Marine Corps is eyeing a long-range robot boat that can nail targets with kamikaze drones” Task & Purpose: https://taskandpurpose.com/news/marine-corps-long-range-unmanned-surface-vessel-contract/

“A New Generation of Autonomous Vessels Is Looking to Catch Illegal Fishers” Smithsonian Magazine: https://www.smithsonianmag.com/innovation/new-generation-autonomous-vessels-looking-catch-illegal-fishers-180976336/

“Autonomous Shipping: Trends and Innovators in a Growing Industry” Nasdaq Technology: https://www.nasdaq.com/articles/autonomous-shipping%3A-trends-and-innovators-in-a-growing-industry-2020-02-18

“The Future of Autonomous Aircraft” TechXplore: https://techxplore.com/news/2020-12-future-autonomous-aircraft.html

“Xwing Unveils Autonomous Flight System for Regional Planes” VentureBeat: https://venturebeat.com/2020/08/20/xwing-unveils-autonomous-flight-system-for-regional-planes/

“Rail in on the way to autonomous trains” International Railway Journal: https://www.railjournal.com/opinion/rail-autonomous-trains

“Autonomous vessels on inland waterways” De Vlaamse Waterweg: https://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupMeetingDoc&docid=38717

“Automated Trucking, A Technical Milestone That Could Disrupt Hundreds of Thousands of Jobs, Hits the Road” CBS News 60 Minutes: https://www.cbsnews.com/news/driverless-trucks-could-disrupt-the-trucking-industry-as-soon-as-2021-60-minutes-2020-08-23/

“Robots exploring on their own and self-piloting spacecraft are a long way off, says NASA computer scientist” Arizona State University News: https://news.asu.edu/20200220-discoveries-autonomous-spacecraft-baby-steps

Citations

Clements, L.M. and K.M. Kockelman. (2017, January 1). Economic effects of automated vehicles. Research Record: Journal of the Transportation Research Board. Retrieved February 6, 2021, from https://journals.sagepub.com/doi/abs/10.3141/2606-14

Colias, M. (2021, January 19). Microsoft bets bigger on driverless-car space with investment in GM’s Cruise. The Wall Street Journal. Retrieved February 6, 2021, from https://www.wsj.com/articles/microsoft-bets-bigger-on-driverless-car-space-with-investment-ingms-cruise-11611064940#

KPMG International. (2019). 2019 autonomous vehicles readiness index: assessing countries’ preparedness for autonomous vehicles. KPMG International. Retrieved February 6, 2021, from https://assets.kpmg/content/dam/kpmg/xx/pdf/2019/02/2019-autonomous-vehicles-readiness-index.pdf

Korosec, K. (2017, June 1). Intel predicts a $7 trillion self-driving future. The Verge. Retrieved February 6, 2021, from https://www.theverge.com/2017/6/1/15725516/intel-7-trillion-dollar-self-driving-autonomous-cars

Lanctot, R. (2017, June). Accelerating the future: the economic impact of the emerging passenger economy. Strategy Analytics. Retrieved February 6, 2021, from https://newsroom.intel.com/newsroom/wp-content/uploads/sites/11/2017/05/passenger-economy.pdf

LeBeau, P. and Reeder, M. (2021, February 3). Apple and Hyundai-Kia pushing toward deal on Apple Car. CNBC. Retrieved February 6, 2021 from https://www.cnbc.com/2021/02/03/apple-and-hyundai-kia-driving-towards-deal-on-apple-car.html

McFarland, M. (2020, December 14). This robotaxi from Amazon’s Zoox has no reverse function. CNN Business. Retrieved February 6, 2021 from https://www.cnn.com/videos/business/2020/12/14/zoox-robotaxi-amazon-orig.cnn-business

Mehta, Ivan. (2019, April 15). How China’s new highway for self-driving cars will boost its AV ambitions. The Next Web. Retrieved February 6, 2021, from https://thenextweb.com/cars/2019/04/15/how-chinas-new-highway-for-self-driving-cars-will-boost-its-av-ambitions/

Moderation Team. (n.d.). Waymo to open new autonomous testing facility in Ohio. Self Driving Cars 360. Retrieved February 6, 2021, from https://www.selfdrivingcars360.com/waymo-to-open-new-autonomous-testing-facility-in-ohio/

Tomita, H. (2017, December 17). Awaiting the realization of fully automated vehicles: potential economic effects and the need for a new economic and social design. VOXEU CEPR. Retrieved February 6, 2021, from https://voxeu.org/article/potential-economic-and-social-effects-driverless-cars

A Few Common Foundational Elements of Leadership and Management

08 Monday Feb 2016

Posted by in Leadership, Management, Relationships, Team-Building

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Below are some common foundational elements of leadership and management. This is primarily “a top of mind” list based on my experience. This list is neither comprehensive nor unique to me.

Leadership matters—people-based, results-driven; provide direction, remove obstacles; be accountable and responsible for everything that does or does not happen; take blame; give credit; be action-oriented; lead change; systematize; develop leaders; be authentic—to thine own self be true

Know the business

Know the industry

Attract and retain talent and build the team—they are the ones that get the results

Relationships matter—trust, transparency and alignment

Communicate a lot, especially listen

Collaborate constantly

Delegate authority and responsibility (accountability cannot be delegated)

Don’t tolerate micromanagement or bureaucratic nonsense

Focus on a clear and simple mission

Focus on results (outcomes), not process—oriented on a few, simple, elegant performance measures that drive the mission

Focus on continuous improvement

Focus on evidence-based decision-making

Be frugal—spend money as though it is your own

Leverage technology, and allow for changes in technology

Develop economies of scale

Develop feedback loops

Develop simple, elegant, consistent messaging

Develop simple, actionable focused reports

Balance everything against risks

Balance change, directives and control with empowerment, delegation, trust and relationships

Recognize individual and team success—this raises them as an example to others and themselves

Always use simple courtesy and appreciation—say thank you

Celebrate success and have fun

Feel free to add other items to this list or develop your own list of leadership and management foundational elements. What’s important is to be mindful of the foundational elements that work for you so that you can reflect and improve them. Leadership and management are aspirational goals that are never achieved or finished.

“Leadership is an opportunity to serve. It is not a trumpet call to self-importance.”

-J. Donald Waters

“Leadership cannot really be taught. It can only be learned.”

-Harold S. Geneen

“The leader is one who mobilizes others toward a goal shared by leaders and followers… Leaders, followers and goals make up the three equally necessary supports for leadership.”

-Gary Willis

Leadership: People Skills and Getting Results

08 Monday Feb 2016

Posted by in Leadership, Management, Relationships

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As part of my leadership philosophy, I separate the leadership of people from the management of things for getting results. Inherently people cannot be managed and in fact resist it. However, they can be led with clear goals, direction and working on something they are highly motivated toward and that is greater than themselves. That said, the management is essential.

First and foremost, a mission statement must be clearly established. That is the ultimate aim. For a department of transportation (dot), and depending on their responsibilities, it is generally accurate to say they “provide a safe, reliable and sustainable transportation system for the movement of people and goods while improving the economy, mobility and environment”.

Based on my experience, I believe a dot must establish a relatively small group (10-15) of specific and measurable goals (performance measures) that should be divided into two groups:

  1. Strategic goals or outcomes (6-8) and
  2. Enablers (7-9) that support the achieving those goals.

It is fairly common to measure too many goals in a dot because nearly everyone has a different opinion of what is important, especially if it is the work they are doing. However, these goals must be vetted and the organization aligned with their achievement. There are essentially seven strategic goals/outcomes for dots:

  • Safety
  • Jobs and Commerce
  • Mobility
  • Access
  • Environmental Stewardship
  • Infrastructure Preservation
  • Customer Service/Satisfaction

While I have not defined these, there could be subsets to at least one. Customers can be defined as the public but also legislatures/congress and various partners such as construction contractors, consultants, truckers, shippers, etc. I mention this because in the end, it is the satisfaction of the customers, supported by the partners, that makes funding, political support, collaboration and a lot of other things work.

Enablers may include:

  • Project Delivery
  • Asset Management
  • Fiscal Responsibility/ROI
  • Collaboration/Partnership
  • Workforce Development
  • Leverage Technology (think digital technology, a subject transforming transportation)
  • Risk Management

It is important to note that everything that is important cannot be measured. Also, focus can be lost if too many things are measured.

That said, everything is in a constant process of improvement and so it must be for dots and the industry to remain competitive.

One of the more intriguing data I have come across on the subject of people versus management of goals/results is from the Harvard Business Review, December 27, 2013 entitled “Should leaders focus on results, or on people?” by Matthew Lieberman. His article reports that if a leader has great social skills only 12% of people consider him a great leader. If a leader has great results skills he is considered great by 14% of people. If a leader has both skill sets the percentage of people rating him a great leader sky rockets to 78%. However, less than 1% of leaders are rated high in both goal focus and social skills.

Another study entitled “High-Resolution Leadership: A Synthesis of 15,000 Assessments into How Leaders Shape the Business Landscape” by Development Dimensions International or DDI, 2016, www.ddiworld.com/hirezleadership, covered 300 companies from 18 countries. This study reflected that of the eight highest interaction skills, empathy overwhelmingly tops the list as the most critical driver of overall performance, followed closely by involving others (i.e. engagement). Both relate to higher leader performance in decision making and planning. Overall, the study suggests that leaders need high emotional intelligence (empathy) in their daily dealings with people as well as high cognitive abilities in more intellectual pursuits such as strategy and financial management.

“Effective leadership is not about making speeches or being liked; leadership is defined by results not attributes.”

-Peter F. Drucker

It is all about people – Relationships

02 Wednesday Sep 2015

Posted by in Relationships

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It is hard for me to imagine anything more important than high quality relationships. This is equally true in our personal and professional lives. As such, I thought it appropriate to do the first blog on the importance of relationships.

Relationships exist between individual people, not between companies, organizations, agencies, cites, counties, states, countries or other groups of people. I believe it is common to develop a preconceived notion of individuals based on the reputation of a group of people. Still, relationships are between individual people and we can never forget that.

SapiensI am currently reading Sapiens- a brief history of human kind by Yuval Noah Harari. Harari begins by stating that we are an animal of no significance. Then about 70,000 years ago the Cognitive Revolution began as people began to form cultures. Then the Agricultural Revolution hit about 12,000 years ago, followed by the Scientific Revolution only 500 years ago. Throughout these revolutions, tribes, towns, cities, states, empires and finally nations have formed. Our imaginations have created social, political, legal and economic arrangements with associated norms, religions, beliefs, values, traditions, monetary currencies and desires. These “imagined orders” have changed many times over the millennia and will continue to evolve in the future. Nonetheless, we are left with the reality that we are social beings bound together by the relationships we create in our personal and professional lives. In many ways those relationships are what sustain us. We have changed very little in this regard.

There are many elements to building and maintaining relationships – trust, mutual respect, tolerance, authenticity, transparency, being vulnerable, avoiding being judgmental, forgiveness, feeling safe, making and honoring commitments and apologizing when mistakes are made. As part of my leadership theme, I will address some of these people-based elements in addition to results-driven elements in future posts.

It is also powerful when people believe in you, and you in them. I draw inspiration from those that believe in me.

Personal relationships are the fertile soil from which all advancement, all success, all achievement in real life grows.

– Ben Stein

Harari, Yuval N. Sapiens: A Brief History of Humankind. Harper, 2015. Print.