Transportation is more connected than ever—and with more connectivity comes more data. Across cities, roadways, and freight transport, vehicles can interact with physical and technological infrastructure by sharing, collecting, and analyzing that data. With these points in mind, the sector is well on track to develop intelligent transport systems (ITS) that help meet the demand for transit connectivity services, including traffic and fleet management and electric-vehicle (EV) charging.
Founded by the European Commission in 1991, ERTICO - ITS is a public–private partnership encompassing actors ranging from governments and universities to infrastructure owners, operators, and users. The partnership works to develop, promote, and connect ITS by supporting European-funding projects, innovation platforms, and advocacy. ITS also congresses on smart and sustainable transport and mobility.
To better understand the advances of ITS, McKinsey spoke with Joost Vantomme, CEO of ERTICO - ITS Europe, about how to scale smart mobility.
McKinsey: The ERTICO - ITS Europe annual review identifies four themes that can enable the region’s 2035 vision: CCAM [connected, cooperative, and automated mobility], urban mobility, clean and eco-mobility, and transport and logistics.1 What are the main drivers behind these themes? How are global forces affecting the demands on today’s mobility systems?
Joost Vantomme: These four themes are very much linked to societal challenges as well as technological progress. In addition to the European Union’s policies and projects, ERTICO - ITS Europe set up a program for connected vehicles on the Internet of Things. There is the EU Green Deal and sustainability agenda, which show how being connected and achieving automation help contribute to decarbonization. Logically, increased connectivity and data sharing will lead to faster information flow, information that reflects qualitative judgments, and more accurate information, especially from trusted sources. Examples include alerting people about traffic jams or being informed well in advance of access regulations for vehicles in urban areas.
The glue across all four themes is the data economy, which includes data sharing, mobility, and other data spaces. It also includes AI, because things are getting smarter through machine learning and through deep learning and vehicles talking to other systems across physical and digital infrastructures.
On this point, I would say there are two components: communications infrastructure and the physical infrastructure. The latter includes traffic signs, lane markings in roads, and all kinds of things that will have digital twins—a copy of the physical environment in the cloud that can be captured by a vehicle and other transport devices. Digital twins and data from sensors, cameras, and light detection and ranging [LiDAR] provide additional intelligence about the physical environment, which can help the automated vehicles of the future, such as robo-taxis.
McKinsey: What types of infrastructure or physical assets are most needed for smarter, more-sustainable mobility?
Joost Vantomme: We are seeing increased demand for better readability of road signs and lane markings and better scannability of other road attributes for electronic devices. It’s not just your eye that has to capture something— the eye of the automated vehicle or other device must do so as well. That means we need consistent interpretation of the signals, and that’s quite a challenge. Every vehicle system needs to interpret the signals in the same way. It would be problematic if one vehicle reads a speed-limit sign as 70 kilometers per hour while another reads it as 75 and another as 60. The same applies to lane markings, which would ideally be more synchronized across countries and regions.
One school of thought says we’ll need to maintain physical road-infrastructure signs and markings for automated vehicles equipped with sensors, cameras, radar, and AI systems. Another school of thought says the automated vehicles need digital twins in every case. The truth depends on the use case and concrete operational domain-driven design. We also study and test mixed-traffic scenarios with fully connected and automated vehicles and other mobility instruments versus nonconnected, or less connected, and automated vehicles. It’s a bit like the digital divide we see in IT. It’s not about one being better or worse but rather how to create inclusivity in the system.
McKinsey: What are some advances in ITS that you find most exciting? Can you share one or two examples of projects for which innovation is working and could be scaled?
Joost Vantomme: The “smartification” of traffic throughput is a key challenge and enabler for efficient and sustainable mobility. On this point, there’s something called mobility network management [MNM], which involves a number of mobility stakeholders working together. Basically, users of mobility services in the network are guided from point A to point B while mobility options are orchestrated in tandem, whether users opt for a car, an electric scooter, or a truck, train, or bus.
Recently, we’ve trialed truck platooning on a large scale with the ENSEMBLE project, in which multiple trucks travel together on the highway and are guided jointly with only short distances between them. Today, for safety purposes, all the trucks have drivers, but it’s technically possible that someday the second, third, and fourth trucks won’t. Because the first truck dictates the whole chain that follows, you save not only on energy and fuel efficiency but also on distance and space.
We also recently finalized our FENIX project, which helps link ports in Italy and Morocco.2 Today, when you travel from one country to another, or from one region to another, you often need several documents for customs, including those for dangerous goods and roadworthiness, as well as approval for the type of driver’s license. All of these documents need to be recognized and assessed, which can take a lot of time. So part of the FENIX project was to digitize these document flows through a single federation of platforms that connect to the ports and to the container traffic ties. Basically, FENIX offers interoperability between any individual existing and future platforms, resulting in more efficient delivery.
Finally, I’d like to mention automated valet parking, for which we’ve recently seen a lot of traction from the automotive and parking sector. Europe is one of the first regions to establish an approval system for automated valet parking systems.
McKinsey: Smart mobility can be a highly fragmented space, spanning multiple sectors, stakeholders, and issues. What is the key to productive collaboration? What is the role of the public and private sectors in this process?
Joost Vantomme: Productive collaboration depends on the willingness of everybody who wants to cooperate within this ecosystem to have an open mindset. This ecosystem doesn’t work if you believe only in your own truth and your own business.
Smart mobility is an environment in which you can start with a small idea and then take that and scale it through a project, test area, test facility, or even regulations. That’s the beauty of our system. We have all these public and private partners that actually support and rely on one another.
On this point, the public sector will likely play a number of roles. One will likely be as policy enabler and regulator. In Europe, for example, there is the updated Vehicle General Safety Regulation, which is the European Commission’s overarching framework for even better vehicle safety and for the approval of automated vehicles.3 Another role is providing leadership and direction by setting strategic objectives for the deployment of intelligent transport systems. And finally, the public sector can serve as a source of funding for research, pilots, and deployment.
The private sector can offer expertise and new technologies—the business and technological side of things. They can also incubate these test projects in certain areas and provide some quick wins through access to capital. They also support the customer side, not only the marketing but also market insights, particularly around who will actually use smart mobility in their daily job.
McKinsey: What will be the biggest observable differences in mobility from now to 2035? What do you see as the greatest threat to progress?
Joost Vantomme: By 2035, the world will be more decarbonized—that much is clear—and probably much more connected and automated than we think. There will be a good combination of connected and automated vehicles with nonconnected and automated vehicles. Sustainability will be carefully measured. Home delivery for e-commerce will be a bit more regulated in terms of when customers want things delivered and even how much it will cost. The digital twins of physical infrastructure will be deployed. And there will be much more space for active mobility and micromobility transportation modes.
Batteries are now increasingly being produced in Europe, but the region still imports most of its raw materials. The same holds true to some extent for semiconductors and data platforms. Continued access to capital will remain a big issue. Companies and policy makers on all continents understand the challenges of the integrated, global value chain, and some of them are refocusing their industrial strategies to be less dependent on areas that are geopolitically unstable.
McKinsey: What factors can enable the necessary ecosystems to achieve scale and economic viability?
Joost Vantomme: Certainly, one thing is the talent—the skills—we have here in Europe. We need to leverage and scale up the talent management processes and skill sets that we have. It’s not just physical production anymore; it’s also the systems that make these things smart: the data, algorithms, and AI. We have the talent in Europe, so we need to invest much more in our people and reskill as necessary.
This article is part of Global Infrastructure Initiative’s Voices on Infrastructure.