Smart roads could enhance safety, reduce congestion, boost sustainability, and increase operational efficiency, prompting major investments from authorities, operators, technology partners and automotive OEMs. Yet stakeholder benefits are often unclear and difficult to measure, creating challenges in realizing Infratech’s full potential.
On December 1, 2022, McKinsey’s Global Infrastructure Initiative hosted a roundtable with senior leaders across European road operators, authorities and decision-makers. The group explored key examples of where innovation is working and discussed barriers that must be unlocked in order to scale success. The following key themes emerged:
- Road infrastructure assets are entering a new paradigm. Technologies such as automation, robotics, advanced analytics, and cloud-based data are fundamentally shifting the boundaries of what’s possible in operating systems and assets. McKinsey research finds that global smart highway systems could grow by 18 percent between 2020 and 2025, and 15 percent of all new vehicles in 2030 could be autonomous. At the same time, the region’s current crisis notwithstanding, energy will continue to transition long-term to more sustainable and decentralized systems, with energy storage becoming a prominent requirement.
- Infratech and connectivity can help derive significantly more value out of existing infrastructure assets. Smart road technologies can increase revenue by increasing availability and making payments more accessible. Some European countries have put legislation in place to directly enforce overloaded vehicles by using Weight in Motion solutions. And a recent EU directive requires toll chargers to internalize the cost of transport by electronically assessing vehicle emission classes in tolling schemes. Technology can also lower opex through predictive maintenance (yielding up to 10 percent cost reductions) and more effective operation. Finally, digital levers can improve safety and sustainability through improved traffic management and better prevention of accidents. One European authority leveraged Stopped Vehicle Detection capabilities to realize a 40 percent reduction in related traffic injury rates.
- New regulatory standards on data governance and cybersecurity will help enable progress. With momentum growing behind connected vehicles, participants identified a need for standardization in the way information is sanitized and used. Verification and certification at a Europe level, then state level, would better enable connected cars to interoperate in the full ecosystem of digital traffic management, with the assumption that vehicle connectivity will become mainstream within the next 5 years. Additionally, the expansion of infratech will inevitably see increased cyber attacks on asset operations, vehicles utilized, and users, calling for robust protection and defense systems. Managing this digital layer of infrastructure could be a logical evolution of the role of an infrastructure operator; however, it remains unclear precisely how this role will evolve.
- Don’t wait to overcome the “chicken-and-egg” conundrum. Participants discussed the classic “chicken-and-egg” dilemma generating demand for connected vehicles, and developing the underlying infrastructure required to support them. “All vehicles today have some kind of connectivity,” said one participant. Several operators also shared examples of new investments in connected infrastructure such as C-ITS roadside stations and automated driving pilots, suggesting that the momentum of Infratech will continue to surge.