HSBC’s “Connected and Collaborative Cities” working session, held at the Movin’ On summit in Montreal, explored new business models and sector convergence trends in the evolving mobility and smart cities ecosystem. Danielle Walsh, Head of Digital Client Coverage, led business leaders and other stakeholders in a discussion of how entities from multiple sectors could play a role in shaping the shift to smart mobility.
Urban mobility can be called “smart” when information technology—along with the data and connectivity it provides—is used to create greater value. Examples include self-driving cars, optimized traffic control, ride-sharing apps, demand-responsive public transit, bicycle-sharing systems and seamless multimodal travel services.
For citizens, smart mobility offers smoother traffic flow, cleaner air, fewer accidents and more efficient and flexible ways of getting around. Simultaneously, it produces valuable user, social and environmental data. “It’s been predicted that digital transformations in cities could generate over US$2 trillion globally in the next six years,” Walsh said, adding that unlocking all of smart mobility’s potential will require heavy investment in infrastructure.
New technologies are increasing, and many that already exist are set to be leveraged for enormous smart-mobility gains. Meanwhile, favourable regulations are in the works; for example, a number of countries, including the UK, France and China, have stated their intention to ban sales of fossil-fuel cars over the next two decades as greener alternatives become more available. Laws governing the security of user data will also be essential. “Regulation—constructive and timely regulation—will protect the citizen but will also allow for innovation,” Walsh said.
"New mobility solutions will put an estimated 60 per cent of the auto sector’s revenue up for grabs," Walsh said, "but the disruption impacts all industries at a scale that cannot be ignored, driving both risks and opportunities." Mobility-as-a-service business models are currently being explored by both established and new players. Auto manufacturers are creating digital applications, companies from other sectors are moving into the vehicle space (for instance, Intel recently purchased the automotive-vision company Mobileye) and start-ups such as Mobike and Moovit are growing rapidly.
A financing gap currently stands in the way of widely adopted, highly integrated smart mobility. Developing funding models is among the remaining challenges, as is managing business risk. “We need to ask ourselves how we can keep to our core business models while shifting to the digital age and generating more value, without being stripped out of the market,” said Walsh. “What’s certain is that if we each stay in our siloes and build our own business opportunities alone, then we will all fail to get there.”
No one sector has all the resources and expertise needed to fulfill smart mobility’s promise. Walsh suggested that a “Federation of Competitors” would be best positioned to do so. “We’re competing not only within our existing sectors, but also in other sectors as we try to shift our capabilities to suit this new environment,” she said. “If we look at our core capabilities, enhance them and then work together across sectors, this is how we can create more value—for the partners involved and most importantly, for the citizens we serve.”
There are several different forms collaborations could take. For instance, players in a given city or region could form a consortium or create a new spinoff entity. Alternatively, they could work together informally via an open network or a knowledge centre.
Several of the session’s working groups posited that concrete success stories are crucial for convincing entities to work collaboratively. “Even if we don’t have all the partners we would need for a large-scale project, we can build something to showcase. If it works, other companies will jump in,” said François Peltier, General Manager of Open Innovation for RCI Bank and Services within the Renault-Nissan-Mitsubishi Alliance.
Many projects are already underway around the globe. For instance, HSBC is supporting the ASEAN Smart Cities Network in south-east Asia, which aims to bring improvements such as smart parking, smart traffic management and electric vehicles to 26 pilot cities across the region. Demonstrating that users benefit while partners profit will accelerate the growth of smart-mobility ecosystems, agreed the participants.