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THE VIEW Australasian Perspective 
Prof Phil Charles 
Disruptive innovation in transport – does it 
lead to doing more with less? 
Phil Charles is Professor of Transport at the University 
of Queensland, Brisbane. p.charles@uq.edu.au 
http://transport-futures.com 
The biggest issue facing transport 
professionals today is how to 
improve productivity – deliver 
more in a constrained resource 
environment. As consumers, we are 
accustomed to the constant productivity 
improvements in technology and 
related services that lead to dramatic 
price reductions and performance 
improvements – otherwise known as 
disruptive innovation. Examples include 
the car compared to a horse and carriage, 
email compared to postal mail, or the PC 
compared to mainframe computers. 
Can disruptive innovation be part 
of the solution to transport budget 
constraints? The challenge is that 
transport infrastructure and services 
are primarily provided and managed by 
the public sector, where there are few 
examples of disruptive innovation. 
Elected officials and top management 
are demanding transport professionals 
to do more for less. Unfortunately budget 
cuts only encourage doing the same with 
less, and more than likely results in doing 
less with less! And relying on an annual 
budget cycle only results in short-term 
thinking. 
Disruptive innovation means 
deploying entirely new technologies and 
services to create value and radically 
reducing costs while maintaining or 
improving services. 
In the private sector market forces 
drive innovation, as profit is increased 
through creating new products and 
services that outperform current ones. 
These competitive forces and incentives 
don’t usually exist in the public sector and 
innovation is frustrated by politics and 
red tape. 
There are many opportunities to 
reduce taxpayer funding and deliver 
improved levels of service. An example 
of a potentially disruptive innovation is 
the parking management system being 
introduced in Washington, DC. Based 
on a smartphone app replacing parking 
meters mobile payment systems provide 
the ability to vary parking prices based 
on supply and demand and increase 
revenue, and provide accurate real-time 
information to customers. 
KEYS TO INNOVATION 
So what are the keys to disruptive 
innovation in transport? 
1. Results focus: carefully and clearly 
articulating the priority transport 
outcomes, being as specific as possible, 
and not constrained by what has been 
done in the past. Define the trade-offs, 
and consider how they could be 
reconfigured. For example, the trade-off 
between fares or prices and quality 
of service. 
2. Pilot program: test new concepts as 
carefully designed experiments, using 
professional project management to 
ensure efficient delivery, and measure 
and report performance. 
3. Separate Unit: to be successful requires 
a separate, lean autonomous unit with 
a clear charter, a realistic business 
plan, limits to political interference, 
access to minimal resources 
(capability, systems, funding) and in 
the short-term, minimum reporting 
requirements. Provide ‘white space for 
innovation’ – a buffer from the threats 
of special interest groups, rules and 
bureaucracy and provide encouraging 
top-level support for innovation. 
❝ 
The challenge 
is that 
transport 
infrastructure 
and services 
are primarily 
provided and 
managed by 
the public 
sector, where 
there are few 
examples of 
disruptive 
innovation 
❞ 
4. Market focus: choose a specific 
market segment to start an innovation 
project. Governments are often a 
dominant buyer and can shape the 
markets they operate in. Choose 
where there is greatest potential for 
improvement, focus on a key segment 
that has the potential for the greatest 
impact. It is important to develop and 
align appropriate incentives, both 
for the public and private sectors, to 
achieve the desired outcome. 
5. Align stakeholders: ensure affected 
stakeholders are aligned with the pilot 
program. Where an effort has been 
made to involve stakeholders, the less 
critical they are likely to be, as they 
have a better understanding of the 
processes, issues and what you are 
trying to achieve. 
6. Demonstrate results: the best case 
for change is one that has been 
argued using scientific research and 
valid data. 
7. Identify next steps: having run 
a successful pilot program the 
critical success factor is speed of 
implementation. To achieve this 
requires identifying the lessons from 
the pilot program then setting out 
how the program can be scaled to 
achieve maximum benefits, including 
opportunities for additional revenue 
sources, changes needs in regulations 
and procedures, and change 
management strategy for public and 
private sector players. 
Disruptive innovation should be part 
of the solutions to transport budget 
constraints. As transport professionals 
it is our responsibility to challenge the 
status quo and seek out innovative ways 
of delivering more effective outcomes for 
reduced taxpayer investment. 
NOTE 
Further reading: 
Sahni, N., 
Wessel, M. and 
Christensen, C. 
2013. Unleashing 
Breakthrough 
Innovation in 
Government, 
Stanford Social 
Innovation Review. 
62 thinkinghighways.com Vol 9 No 2 Europe/Rest of the World

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Disruptive Innovation

  • 1. THE VIEW Australasian Perspective Prof Phil Charles Disruptive innovation in transport – does it lead to doing more with less? Phil Charles is Professor of Transport at the University of Queensland, Brisbane. p.charles@uq.edu.au http://transport-futures.com The biggest issue facing transport professionals today is how to improve productivity – deliver more in a constrained resource environment. As consumers, we are accustomed to the constant productivity improvements in technology and related services that lead to dramatic price reductions and performance improvements – otherwise known as disruptive innovation. Examples include the car compared to a horse and carriage, email compared to postal mail, or the PC compared to mainframe computers. Can disruptive innovation be part of the solution to transport budget constraints? The challenge is that transport infrastructure and services are primarily provided and managed by the public sector, where there are few examples of disruptive innovation. Elected officials and top management are demanding transport professionals to do more for less. Unfortunately budget cuts only encourage doing the same with less, and more than likely results in doing less with less! And relying on an annual budget cycle only results in short-term thinking. Disruptive innovation means deploying entirely new technologies and services to create value and radically reducing costs while maintaining or improving services. In the private sector market forces drive innovation, as profit is increased through creating new products and services that outperform current ones. These competitive forces and incentives don’t usually exist in the public sector and innovation is frustrated by politics and red tape. There are many opportunities to reduce taxpayer funding and deliver improved levels of service. An example of a potentially disruptive innovation is the parking management system being introduced in Washington, DC. Based on a smartphone app replacing parking meters mobile payment systems provide the ability to vary parking prices based on supply and demand and increase revenue, and provide accurate real-time information to customers. KEYS TO INNOVATION So what are the keys to disruptive innovation in transport? 1. Results focus: carefully and clearly articulating the priority transport outcomes, being as specific as possible, and not constrained by what has been done in the past. Define the trade-offs, and consider how they could be reconfigured. For example, the trade-off between fares or prices and quality of service. 2. Pilot program: test new concepts as carefully designed experiments, using professional project management to ensure efficient delivery, and measure and report performance. 3. Separate Unit: to be successful requires a separate, lean autonomous unit with a clear charter, a realistic business plan, limits to political interference, access to minimal resources (capability, systems, funding) and in the short-term, minimum reporting requirements. Provide ‘white space for innovation’ – a buffer from the threats of special interest groups, rules and bureaucracy and provide encouraging top-level support for innovation. ❝ The challenge is that transport infrastructure and services are primarily provided and managed by the public sector, where there are few examples of disruptive innovation ❞ 4. Market focus: choose a specific market segment to start an innovation project. Governments are often a dominant buyer and can shape the markets they operate in. Choose where there is greatest potential for improvement, focus on a key segment that has the potential for the greatest impact. It is important to develop and align appropriate incentives, both for the public and private sectors, to achieve the desired outcome. 5. Align stakeholders: ensure affected stakeholders are aligned with the pilot program. Where an effort has been made to involve stakeholders, the less critical they are likely to be, as they have a better understanding of the processes, issues and what you are trying to achieve. 6. Demonstrate results: the best case for change is one that has been argued using scientific research and valid data. 7. Identify next steps: having run a successful pilot program the critical success factor is speed of implementation. To achieve this requires identifying the lessons from the pilot program then setting out how the program can be scaled to achieve maximum benefits, including opportunities for additional revenue sources, changes needs in regulations and procedures, and change management strategy for public and private sector players. Disruptive innovation should be part of the solutions to transport budget constraints. As transport professionals it is our responsibility to challenge the status quo and seek out innovative ways of delivering more effective outcomes for reduced taxpayer investment. NOTE Further reading: Sahni, N., Wessel, M. and Christensen, C. 2013. Unleashing Breakthrough Innovation in Government, Stanford Social Innovation Review. 62 thinkinghighways.com Vol 9 No 2 Europe/Rest of the World