Embracing disruption to create the cities of tomorrow

Home to 60 per cent of the world’s population, Asia is growing faster than its current infrastructure can support, resulting in severe traffic jams and congestion problems. Along with other stakeholders, Ford recognises that massive changes are coming to the way people and goods move around cities and is working with local governments, companies and citizens on finding solutions to solve these challenges.

Today, 55 per cent of the world’s population is concentrated in urban areas, producing 70 per cent of global GDP. According to the United Nations, by 2020, nearly 70 per cent of the world’s population will live in cities. Nowhere in the world will this phenomenon be felt more acutely than in Asia Pacific, which is currently home to 17 megacities of more than 10 million people and is expected to grow to 22 by 2030.

However, in many parts of Asia, the problems are already starting to reach a tipping point. In the Philippines, it is estimated that traffic congestion in Metro Manila costs the country nearly $57 million per day in lost potential income. Similarly in Hanoi, the capital of Vietnam, if the number of vehicles on the road continues to increase at its current pace, it is predicted that traffic will effectively paralyse much of the city.

Fortunately, with the coming convergence of big data, renewable energy, the rise of a sharing economy and unprecedented levels of connectivity, these problems may soon be more manageable. Governments, companies and individuals are embracing new roles as change agents and working together to address these problems and start to build Asia’s next generation of “smart cities.”

There is more disruption happening now than at any time since horses were replaced by cars as the main form of transportation in the early part of the twentieth century. According to KPMG, 80 per cent of auto executives expect the connectivity trend will be disruptive for their business and 83 per cent anticipate major disruptions to their business models within the next five years.

At the same time, cities are faced with the challenge of transporting people and goods more efficiently and affordably with a minimal carbon footprint. This has created opportunities for companies like Ford to explore new ideas in smart mobility while expanding their business models to embrace these disruptive technologies.

Asia is unique, both because of how fast infrastructure is developing, and the fact that many economies wanting to be at the forefront of technologies. There are many smart city initiatives and a lot of infrastructure that has already been built to make cities operate more efficiently.

The cities finding the most success in their smart city initiatives are those that have shown an openness to collaborate with private enterprises and involve their citizens in the policy development process.

Leading in this area is Singapore, which recently launched a City of Tomorrow research and development programme to find innovative solutions to urban problems and ultimately build a smarter, more sustainable city. The hope is to use the city as a proving ground for new smart transportation solutions, which can then be adopted by other cities in Asia and around the world. Another city at the forefront of the smart city movement is Seoul, which has a 2030 development plan that will involve its citizens in every step of the strategic planning process as it aims to become one of the smartest, most sustainable cities in South Korea.

Ford has established its City Solutions team to work directly with governments around the world, to determine their mobility needs and help develop customised/local solutions to address transportation issues. In Asia Pacific, the Ford City Solutions team sees great opportunities due to the massive and diverse region’s varying needs.

When we approach local governments, they usually begin by thinking that we just want to sell more vehicles, so we have had to change that mindset. We tell them that we are there to help their citizens meet their mobility needs and that we want to help them look at a broad range of possible mobility solutions that may work for them.

Over the past year Ford has begun launching smart mobility experiments in China. With its unique challenges and opportunities, China was chosen for one of the shuttle experiments. Looking at the local transportation patterns across Shanghai, for example, our Smart Mobility team found that a number of residential areas are located long distances away from the nearest subway station. Many residents in these areas would get off the subway and then take a taxi or some other form of transportation home because it wasn’t convenient to walk those last few kilometers.

To help address that final leg of the commute, we created and tested an on-demand shuttle solution that gets passengers to the subway station in the morning and then from the subway station back to their homes at night. The experiment provided first hand feedback and learnings about customer behavior and preferences and we are analysing how learnings from the experiment can be incorporated into new transportation solutions within Asian markets.

More recently, Ford announced a partnership with the local authorities in the Jiangning Economic and Technological Development Zone near Nanjing to offer an employee shuttle programme for participating companies operating in the Zone. This partnership positions Ford not as a vehicle supplier, but a technology provider, and is an example of how it has embraced a disruptive technology and incorporated it into its business model.

Ford looks for opportunities in which it can leverage the significant research investment that it has made in development labs around the world. It is using that insight to partner with governments and companies to offer cost-effective and efficient localised mobility solutions.

A startup might see a specific opportunity, but Ford has the reach to be able to scale some of these solutions. As we develop our toolsets and our network of different providers, we help bring forth mobility solutions to help address consumers’ needs. Ford Smart Mobility has a role to play in helping connect each city with the right solutions, whether it’s from inside Ford Smart Mobility or from outside providers as well.

The writer is Vice President of Ford Smart Mobility Global Operations