Intelligent transportation systems have finally come of age and are now considered mainstream in the transportation world. Technologies such as advanced signalization and traffic information systems are often demanded by the driving public, so ITS is now included in the planning for many transportation projects from day one. Despite all this progress, however, ITS continues to face its greatest challenge – funding.
“Three obstacles are limiting deployment of ITS – money, vision and a good understanding of return on investment,” says Scott Belcher, former president and CEO of ITS America. “The unrelenting competition for funds, both public and private, continues unabated. Funding is always limited, by definition. There is never enough money to go around. In addition, shifting political and societal priorities make it difficult to keep sufficient funds focused on ITS.”
Belcher notes that state highway funding has been shortchanged for so long, states are looking for any source of funding they can find to keep their systems in good repair. That does not leave much room for investments in technology.
“Funding is a fundamental issue,” adds Kirk Steudle, director of the Michigan Department of Transportation and chair at ITS America. “We have to make trade-offs. Do I make this investment in ITS, or do I make sure three more bridges stand up? That is the biggest obstacle I see to ITS.”
“Three obstacles are limiting deployment of ITS – money, vision and a good understanding of return on investment.” –Scott Belcher, former President and CEO of ITS America
The American Recovery and Reinvestment Act (ARRA) was enacted in February 2009 to stimulate the US economy. In terms of transportation, the US DOT received $48.1 billion to promote short-term economic recovery, and an additional $1.5 billion in discretionary grants to invest in projects that provide long-term economic benefits.
ARRA funding helped many states fund transportation projects that would not have been possible otherwise. While some ITS projects were funded, most of the money went to construction, road repair and expansion. State DOTs preferred to spend ARRA funds on construction because of the perception that those projects are “shovel-ready” and would put more people back to work, although in reality ITS could meet both of those requirements.
This competition for dollars continues to be a major hurdle for ITS today. According to the Information Technology & Innovation Foundation, expanding funding for ITS is the optimal use of highway transportation funding because ITS can maximize the capacity of existing highway infrastructure. Yet states have significantly under-invested in ITS, preferring to fund traditional transportation investments such as new highway capacity.
“Traffic operations or ITS projects don’t always rank as high on the priority list against roadway and bridge rehabilitation or safety projects,” says Randy Iwasaki, executive director of the Contra Costa Transportation Authority in California. “Because there aren’t enough dollars to fund everything on the needs list, ITS projects often don’t get funded.”
“Traffic operations or ITS projects don’t always rank as high on the priority list against roadway and bridge rehabilitation or safety projects.” –Scott Belcher, former President and CEO of ITS America
David Fink, the director of transportation management systems for the Houston district of the Texas Department of Transportation, also cites competition for construction dollars as one of the two biggest obstacles to implementing ITS.
“The tangible effect of opening new freeway lanes is easier for the general public to see as a benefit, while technology can be less appreciated because it is more behind the scenes,” Fink admits. “The old saying ‘you can’t cut a ribbon on new technology’ applies here.”
Fink says the other obstacle to ITS is keeping up with technological advances, which also translates into a funding issue. For example, while pavement has an estimated lifespan of 50 years, with little maintenance required in the initial years, the lifespan of new technology is much shorter, requiring continual investment and upgrade.
Doug Tomlinson, P.E., the Pennsylvania Department of Transportation’s chief owf traffic operations, explains that DOTs have many responsibilities, which include ensuring that bridges are safe and that roads are properly maintained.
“Although ITS technology is a valuable tool in the traffic operations toolbox, it needs to compete with many other types of projects for limited transportation funding,” Tomlinson observes. “As a result of the limited funding, ITS dollars are mainly focused in areas with the highest traffic congestion concerns.”
Part of the funding problem may be that ITS is still viewed by some decision-makers as conceptual rather than ‘real world.’ ITS is often categorized as research and development for the future, rather than as a very effective real-world solution that delivers an excellent return on investment today.
“On a project basis, ITS is economical for what it delivers,” Belcher explains. “One of the problems with ITS projects is they are not very sexy. You cannot go cut a ribbon when you build it out. So you have to be intentional about it. You build it into an existing project, for example.
“But if you look at the return on investment, the returns are very good and stack up well compared to some of the other potential competing investments,” he adds.
The ROI of ITS can be very impressive. According to a GAO study on traffic information in 2009, an investment of $1.2 billion in a real-time transportation system information program would generate $30.2 billion in environmental, mobility and safety benefits to the public.
“An investment of $1.2 billion in a real-time transportation system information program would generate $30.2 billion in…benefits to the public.” –GAO Study 2009
The state DOTs on the front lines know this better than anyone. David Fink of TxDOT, estimates ITS ROI at 11 to one, meaning for every $1 spent in operating and deploying ITS, the return to the general public is about $11. Similarly, an ITS manager from Colorado DOT estimated ITS ROI at 10 to one.
As one GAO study on the state of ITS deployment in the United States found, “unfortunately, information on benefits does not have a decisive impact on the final investment decisions made by state and local officials.”
One solution may be a different approach to “selling ITS” as an option to decision-makers, focusing on the ROI aspects – the bottom line benefits to the public, as well as the transportation agencies – rather than the technology components.
“Communication is the key to a continual funding stream,” Fink advises. “Educating decision-makers, highlighting the value of the data to the general public to garner their support, and continual provision of accurate, high quality information is necessary.”
ITIF also recommends pressuring states to seek out the ROI inherent in ITS by judging them on performance: “Repurposing transportation funds to ITS systems that have a far greater cost-benefit return would spur innovation and improve performance of the transportation system. If the federal government tied federal surface transportation funding to states’ actual improvements in transportation system performance, it would encourage states to deploy the intelligent transportation systems delivering the greatest bang for the buck.”
One funding alternative that has had a major impact on driving ITS deployments, and may well be the key to the future, is public-private partnerships.
“An option to preserve reliable funding is the use of public-private partnerships, as business is more flexible and often has more discretionary funding for innovations,” says Fink.
A great example of a public-private partnership in ITS is the Connected Vehicle pilot program in Ann Arbor, Michigan, conducted by the University of Michigan Transportation Research Institute and Michigan Department of Transportation, and funded by Michigan and USDOT. In addition, the Crash Avoidance Metrics Partnership, a research consortium of automobile manufacturers working together to develop standards for connected vehicle technology, is funded by NHTSA and other government agencies, as well as the automakers.
“An option to preserve reliable funding is the use of public-private partnerships, as business is more flexible and often has more discretionary funding for innovations.” –David Fink, Director of Transportation Management Systems, Houston District, Texas DOT
Similarly, the Texas A&M Transportation Institute joined forces with the Texas Department of Transportation to form the Accelerate Texas Center, a public-private collaboration working on the commercialization of automated vehicle technology.
California is also exploring these types of partnerships. “In the absence of dedicated funding from the federal government, the burden of finding a creative solution to implementing ITS has been placed on state and local agencies,” Iwasaki explains. “For example, the Contra Costa Transportation Authority recently announced the development of the largest secure autonomous vehicle test bed in the United States. Our partners include the City of Concord, Mercedes Benz, and the US Navy. CCTA secured all of the permits and agreements from the US Navy, at no cost to Contra Costa taxpayers. This could not have happened without a commitment from our partners to bring new transportation technology to our county.”
Says Scott Belcher: “States like California, Michigan and Texas are pursuing innovative partnerships because they want to be shaping the future as opposed to reacting to it.”
“In summary, intelligent transportation systems empower actors in the transportation system – from commuters to highway and transit authorities, even down to the actual traffic lights themselves – with actionable information (that is, intelligence) to make better-informed decisions, whether it’s choosing which route to take, when to travel, or whether to mode-shift; how to optimize traffic signals; where to build new roadways; or how to hold providers of transportation services accountable for results,” says ITIF. “That vision is now within our reach, but attaining it will require bold leadership.”
Bold leadership is exactly what we are seeing in agencies like California’s Contra Costa Transportation Authority, which hosted a number of public workshops as part of updating the Countywide Transportation Plan – a 25-year look ahead at transportation needs. When CCTA polled participants, 78 percent of respondents said it was important to include funding for technology in the plan.
“In order to ensure that we stay competitive, our agency plans to invest a large sum of our future dollars into projects that utilize technology to help increase mobility,” Iwasaki explains. “Ultimately, while there are significant upfront costs to development and implementation, I believe this technology will pay for itself by reducing accidents, reducing congestion and thus greenhouse gases, and improving quality of life. The market will drive ITS around the globe and increase demand for solutions utilizing ITS technology.”
The United States seems to be more committed to ITS than ever before. The US DOT’s ITS Strategic Plan 2015-2019 focuses on five major ITS objectives: enabling safer vehicles and roadways; enhancing mobility; limiting environmental impacts; promoting innovation; and supporting transportation system information sharing. The question remains in 2015: how do we fund these many, varied and ambitious goals?
President Obama’s 2016 budget includes a six-year, $478 billion surface transportation reauthorization proposal, but the focus still seems to be rebuilding infrastructure such as roads and bridges. Only a small fraction of that budget – $935 million over six years – has been designated for the future of intelligent transportation systems, including $158 million in FY 2016 to accelerate research on vehicle automation and vehicle-to-vehicle technology. Despite representing a small percentage of total transportation funding, however, this is an increase in ITS funding over previous years.
While this does not come close to the increase in ITS funding of $2.5 to $3 billion annually called for by ITIF, the 2016 budget is progress in the right direction, and understandably has been supported by ITS America.
The reauthorization proposal would also “permanently authorize the competitive TIGER grant program to support projects that bring job opportunities to communities across the United States.” As part of ARRA, the TIGER grants were considered the most successful way to fund ITS projects – possibly because they were judged on a case-by-case basis in terms of factors such as expected performance – so this could present hope for funding innovative and productive ITS projects in the future.
“Helping to lay the groundwork for technology will be one of our priorities in the next surface transportation reauthorization bill,” concludes Chairman Bill Shuster of the House Transportation & Infrastructure Committee. “Finding ways to maximize the efficiency of our surface transportation system is important now and will continue to be so in the future.
“Opening the way for greater use of innovation and technology, including intelligent transportation systems, is one way that we can make the existing system work better and maximize capacity in the coming years,” Shuster adds. “The future of transportation is coming and the federal government can’t afford to stifle innovation. The United States must be a leader in this area, and we have to be ready for the benefits and challenges that new technology will bring.”
The future of ITS is certainly exciting, with the possibility of truly intelligent traffic seemingly within our grasp. The advancement of innovative technology will be the key to bringing this possibility to life. The question of how to fund these innovations is something that needs to be addressed, but the availability of funding is not the only critical issue. It is equally important that we also address how funding is implemented, how innovation is rewarded and how it is protected. At Wavetronix, we believe these issues, perhaps even more than funding itself, pose the greatest threat to the goals being set for ITS.
As transportation agencies around the world struggle to secure the funding required to broadly implement intelligent systems, they are often hampered by government purchasing practices which tend to impede innovation. In the US, federal funds are frequently coupled with purchasing mandates that restrict agencies to specific technologies or protocols. These restrictions are almost always intended to “level the playing field,” but they interfere with fair competition and stifle innovation — what incentive is there to innovate if funding mandates will prevent anyone from benefiting from the technology?
Instead, federal funding should promote innovation and reward those agencies that want to be truly innovative by allowing them to purchase the technology that will best meet their needs. Currently, the Federal Highway Administration dispatches inspectors to evaluate state DOTs’ adherence to their funding mandates; can you imagine how much more we could accomplish if the FHWA chose to monitor innovative practices and then provided opportunities for other agencies to follow suit?
At the same time, it is important that these innovations be protected in order to encourage companies to invest in research, development and invention. Patents were created for just this purpose — to protect inventors in releasing technology to market. In the US, this perspective is slowly being lost. Patent rules have recently been softened, allowing for patent challenges to be made far too easily. The result, unfortunately, is that far too many inventors will feel that the investment in innovation is no longer worth the risk, and our forward progress in technology will be stifled.
At Wavetronix, we agree with Congressman Shuster when he says the federal government cannot afford to stifle innovation. In a free market, customers should be able to reward the innovation that benefits them the most. By encouraging innovation and protecting those who dare to innovate, we make truly intelligent systems possible. However, if we continue to restrict innovation and fail to adequately protect those who innovate, we risk failing to make the future of ITS a reality.
