Navigant Research Blog

Smart Cities Initiative Provides Added Boost to Growing IoT Market

— September 29, 2015

Coinciding with Smart Cities Week in Washington, D.C., the Obama administration announced an investment of over $160 million for a new Smart Cities Initiative on September 14. The initiative focuses on federal research and will leverage over 25 new technology collaborations to help municipalities address key challenges such as reducing traffic congestion, fighting crime, fostering economic growth, managing the effects of climate change, and improving the delivery of city services.

The initiative shows the U.S. government following other national governments in supporting smart city initiatives, including the United Kingdom, India, and South Korea. This is further evidence of how the smart city concept is being fully embraced in North America.

The Obama administration has broken down the investment allocation as follows:

  • More than $35 million in new grants and over $10 million in proposed investments assigned to build a research infrastructure for smart cities, led by the National Science Foundation and National Institute of Standards and Technology.
  • Nearly $70 million in new spending and over $45 million in proposed investments allotted to unlock new solutions in safety, energy, climate preparedness, transportation, health and more, by the Department of Homeland Security, Department of Transportation, Department of Energy, Department of Commerce, and the Environmental Protection Agency.

IoT Segment Growing Quickly

This announcement comes at a time when interest and activity in smart cities technologies and solutions is higher than ever. There is a growing focus on the intersection of smart cities and the Internet of Things (IoT). In the context of smart cities, IoT refers to a network of physical objects within a smart city that are embedded with electronics, software, sensors, and connectivity to enable these objects to collect and exchange data.

Just over the past few weeks, several high-profile developments in the IoT market have taken place. General Electric announced the creation of a new business unit with the aim of becoming the leader in the IoT; IBM appointed Harriet Green—the former CEO of Thomas Cook Group in the United Kingdom—to lead its new IoT business unit (IBM is expected to invest $3 billion over the next 4 years in this unit); and Salesforce announced a new IoT Cloud platform. According to the Smart Cities Initiative, these developments in the IoT market reinforce the importance of its focus on “creating test beds for ‘Internet of Things’ applications and developing new multi-sector collaborative models.”

Array of Things

Several cities in the United States have been evolving to add more IoT concepts to smart city projects. For example, the University and the city of Chicago are engaged in a joint venture named the Array of Things (AOT) with the Argonne National Laboratory. This project will provide real-time, location-based data through sensor boxes that will be deployed in the Chicago area. The sensors will detect temperature, light, vibration, carbon monoxide, pedestrian and vehicle traffic, and surface temperatures to work with applications that use the sensor data to alert residents to areas with traffic congestion, pedestrian traffic, and icy patches on sidewalks. Data collected by the AoT project will be free and open to the public, a key feature of the program. The National Science Foundation is providing an additional $3.1 million to the AoT project, derived from the White House’s Smart Cities Initiative funding. The impact of IoT on smart cities will be explored in more depth in Navigant Research’s upcoming Smart City Street Management report.


E-Bike Technology Improving Dramatically

— September 17, 2015

As recently as 1 or 2 years ago, most electric bicycle (e-bike) models had a modest electric range of between 15 and 25 miles. Although there are many contemporary e-bikes boasting 40 or more miles of range, Samsung SDI recently blew other products out of the water through the release of its new e-bike battery pack at Eurobike 2015 in Germany. The 500 watt-hour (Wh) battery pack runs 62 miles (100 km) on a single charge and is equipped with Bluetooth compatibility, allowing users to monitor battery life via a smartphone. This new range capability means that a bicycle commuter could ride their e-bike from Boulder, Colorado to neighboring Denver and back without needing to recharge the battery along the way. For those unfamiliar with the route, the Boulder-to-Denver commute takes about 40 minutes (just under 30 miles) without traffic each way by car.

Innovative emerging trends such as improved battery life have helped position the e-bike industry for increased market growth. In addition to increased battery range, combined throttle-control and pedal-assist models, electric cargo bicycles (e-cargo bikes), all-in-one retrofit kits and wheels, 3D-printed bicycles, and the increasing use of e-bikes in police patrol and various security industries have all contributed to a growing market with strong potential. According to Navigant Research, global annual sales of e-bikes are expected to grow from nearly 32 million in 2014 to over 40 million in 2023.

Autonomous E-Bikes

Also started to be tested are autonomous—or self-driving—e-bikes. At the 2015 Eurobike event where Samsung SDI announced its battery pack, startup company CoModule displayed a smartphone-controlled, three-wheel e-bike prototype. The company believes that in the near term, the e-bike could be used to help postal workers with deliveries or park cleaners with garbage collection. The long-term vision is for the vehicle to provide autonomous deliveries in urban city centers.

Although undoubtedly intriguing, autonomous e-bikes appear to be a potentially unnecessary technology that somewhat defies the purpose of a bicycle itself. If no one will be riding it, why even make it a bicycle in the first place? The general philosophy behind e-bikes is that if a rider has long distances to travel, physical limitations, or simply want a faster mobility option, then an electric-powered bicycle is a great way to get some exercise without getting exhausted or pushing physical limitations too far. While the idea of a small autonomous delivery device makes sense, making that device a bicycle with pedals (which presumably no one will use) perhaps requires some rethinking.


Increased Safety at Ports through Smart Technologies

— September 1, 2015

Massive explosions killed at least 114 people and injured over 700 in early August at the Port of Tianjin in China. Tianjin is located close to Beijing and is one of China’s most important oil and gas terminals. It also serves as a key entry point for iron ore, vital to the enormous steel making industry in China. While the cause of the explosions are not yet clear, it is interesting to question whether this accident could have been prevented through the use of smart technologies. Technologies such as petrochemical air pollution sensors and wireless mesh networks could have potentially been helpful in detecting potential hazards such as early fires (which may have led to the explosions) or a gas leak.

Smart Technology Port Applications

Ports in China would be far from the first to adopt smart technologies for safety purposes. Wireless mesh networks are currently being used in marine and safety applications in North America at the NY Waterway. This network provides a security solution with a coverage area spanning nearly all the waterways that surround Manhattan. The NY Waterway uses the high-speed wireless network to improve communications, emergency response, and preparedness throughout all ports and ferries in the organization’s fleet. Hundreds of Interlogix IP and analog cameras are being used and are connected through Fluidmesh’s Multiprotocol Label Switching (MPLS)-based wireless mesh network.

Increased Safety through Energy Efficiency

Smart technologies can also make port operations safer by making them more energy efficient. The Port of Hamburg, which takes in roughly 10,000 ships per year, recently computerized its loading systems to synchronize offloading and reduce traffic jams that were causing very high concentrations of diesel emissions. Integrated Truck Guidance systems from companies such as Siemens can track and guide trucks that are close to the port (within 10-15 miles) to assigned spaces or allocate each truck to alternative spaces if the originally assigned space is not open. This system can reduce traffic congestion and unnecessary idling at ports by making parking and cargo pickup routes more efficient—thus reducing harmful air pollution.

While it’s impossible to know for sure whether a connected sensor network could have prevented the explosions at the Tianjin port, perhaps operators could have taken some preventative action if they were given a chance to respond to the events before it became an uncontrollable situation. The inherent security and operational issues regarding ports and ships make this industry a prime candidate for smart technologies.

For more information on the use of smart technologies in port operations, see Navigant Research’s report Energy-Efficient Port Operations, which analyzes the market for shore power technology and natural gas drayage trucks.


Autonomous Vehicle Pros and Cons for Government Budgets

— August 10, 2015

Autonomous vehicles continue to gather media headlines as the industry promises a highly desirable future consisting of drastically reduced vehicle accident rates, congestion, and road emissions. While these impacts and the potential effects on the insurance industry are often discussed at length, less attention has been given to how autonomous vehicles may affect government budgets—particularly law enforcement.

Speeding Tickets

As a prime example, autonomous vehicles simply do not drive faster than posted speed limits. Google’s driverless vehicles have logged more 1 million miles autonomously without receiving a single citation. According to the National Highway Traffic Safety Administration (NHTSA), the average cost of a speeding ticket in the United States is $152, and about 41 million people receive a citation each year. This amounts to a staggering $6.23 billion in potentially lost state and local government revenue each year due to autonomous vehicles. Additionally, autonomous vehicles do not run red lights or drive under the influence of any substances, eliminating two other significant sources of revenue for government services.

What About Parking?

And then there’s parking; New York City alone generated $534 million in parking ticket revenue in 2013. How autonomous vehicles may affect the business of parking revenue is much less clear than other sources of traffic violation revenue. Navigant Research expects parking to be an area remaining far more in consumers’ hands compared to highway and even city driving, at least in the near term.  Nevertheless, the on-demand nature of autonomous vehicle fleets is expected to reduce personal vehicle ownership over time, and thus the need for parking is expected to decrease, as well. If large numbers of people are using smartphone apps such as Uber to summon autonomous vehicles, parking demand and usage should decrease, which in turn is expected to lead to a significant loss in parking ticket revenue. The extent to which this may happen is unclear thus far.

Revenue Reduction Offset by Reduced Costs?

Conversely, autonomous vehicles may also reduce costs for government, somewhat negating the loss in revenue streams. The NHTSA has stated that 7% of vehicle crashes are paid for with public revenue. This annual taxpayer bill of roughly $10 billion is used for emergency services, property damage, court costs, and other expenses. Autonomous vehicles could drastically reduce or nearly eliminate the 5.6 million accidents occurring annually in the United States, saving local and state governments enormously on expenditures. Reduced demand for parking in densely populated urban areas may also free up land that could be utilized for either residential or commercial development, which could provide a new source of jobs, housing, and tax revenue.

Whether autonomous vehicles will ultimately end up saving governments money or reducing their budgets is unclear. What is clear, however, is that a future where citizens spend little or no money on traffic violations and everyone saves enormously on vehicle crashes and fatalities is a future worth pursuing.


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