IN preparation for the Asia-Pacific Economic Cooperation (Apec) CEO Summit this November in Manila, we (the Apec Business Advisory Council, or Abac) have organized a series of special dialogues between ministers and CEOs on a wide range of topics. So far this year, there have been dialogues on trade, life sciences, disaster management, services, cities, finance, and small- and medium-scale enterprise.
Last week in Cebu, we met with transport ministers to discuss “inclusive mobility.” At first glance, even I couldn’t understand what it was exactly referring to. However, by the end of an engaging discussion with transportation and logistics company CEOs over one afternoon and a dialogue with ministers the following morning, I had a newfound appreciation for the topic.
Three trends seem to be driving the need for better mobility for people and goods. The first is basically demographics: The world’s population is growing. The second is urbanization: more people are flocking to cities. However, a significant number of people still live in far-flung areas. And third: the creation of free-trade areas and the expansion of supply chains (and its effect on the shipment of intermediate goods as opposed to purely raw materials or finished goods) is driving demand for transport resources.
The basic emerging philosophy behind inclusive mobility is putting people at the center of the transport agenda. This philosophy has far-reaching impact on public policy, as well as technology and innovation. The greatest impact will be that this requires a “whole-of-government” approach rather than the traditional approach followed by many countries through their respective departments of transportation. In some Apec economies, they have started considering rebranding (and re-purposing) their departments of transportation into departments of logistics or mobility. Rather than looking at different transportation channels—by air, by land, by sea—they now look at intermodal mobility.
Once you begin to look at inclusive mobility as a whole-of-government challenge, then you begin to think that governments need to look beyond physical infrastructure. Infrastructure is, of course, important. But so are services, design and policies to promote mobility. The bottom line is that policies need to be consumer-centric or people-focused rather than operator-centric.
Governments can, for instance, provide many options for mobility: sidewalks, elevated walkways, bicycle paths and bicycle-sharing systems, mass transit and good roads. The presence of many options ensures that people can pick the means of mobility that they find affordable and accessible to them.
Technology and innovation can play a major role. Oftentimes, even in cities that have the most mass-transit systems in the form of efficient buses, subways, light rail, rail and roads, there is always the “last mile” challenge. How do people or goods get from their last train, bus, or subway stop to their homes? Sometimes, the solution can be as simple (though by no means inexpensive) as providing bus stops or train stations within a certain distance from residences and offices. In other cases, the solution can be as innovative as allowing transport network services (think Uber) or taxis to ferry passengers from stop to home/work or vice versa.
The implication here is that private sector innovation should be encouraged. The private sector is probably in the best position to test the commercial viability of a technology innovation. If the innovation creates more efficiency in business operations, it is more likely to be financially sustainable which, therefore, increases the chances of expansion. That is good for the consumer. However, as technology and innovation tend to run ahead of the regulatory framework, some arrangement will need to be arrived for balanced regulation—one that gives room for innovation to prove itself while protecting consumer interests.
The second implication is that technology and innovation generate new data; in this case, Big Data. Because so much data is generated so quickly, technology, logistics and telecommunications companies probably own more data and possess more computing power than most government agencies. Sharing their data and analytics will probably help the government transportation and infrastructure planners do a better job of transport planning. Imagine the mobility patterns you can see through Big Data on a day-of-the-week, time-of-day basis. Uber can precisely do this and correlate data and patterns with such things as weather (rain, storms) and events (think of how traffic patterns change in areas hosting concerts, sports events, or large outdoor events). Mobility patterns can tell you where people live, work and play. That, in turn, tells planners where to create new train stops, bus stops, or bicycle paths and wider roads.
But not everything needs to be concentrated in densely packed urban areas. There is a powerful rationale for building up transport systems to service or connect secondary areas. Whether we are talking of airports, ports, roads, or rail, linking to secondary areas serves two purposes.
It prevents over-concentration of assets (and, therefore, too much risk) in large cities. Just imagine if a country had only one major international airport and that airport was shutdown. That country would effectively be isolated. Multiple sites means having built-in resilience to risk.
A second benefit would be that it would promote inclusive growth. Imagine the effect of linking suppliers in the hinterland to markets in urban areas (and providing urban-based services to rural areas). As finished products are shipped to the hinterlands, raw materials could be brought to urban centers. That would spur inclusive growth.
Transportation for all is certainly a challenge in the Philippines. With so much catching up to do, we better take some of these lessons to heart before we hopelessly clog up our system to the point of inclusive immobility.
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Guillermo M. Luz (gm.luz@competitive.org.ph) is private sector cochairman of the National Competitiveness Council and an alternate member of Abac Philippines.