Connected Travel Hyperconnected

Connected World: Hyperconnected Travel and
Transport in Action
World Economic Forum – BCG collaboration project
May 2014

Connected World Slideshare_BCG format_23May14_JL.pptx 1
Copyright©2014byTheBostonConsultingGroup,Inc.Allrightsreserved.
Connected world: what will travel & transport look like in 2025
What are the key challenges and cross-industry opportunities?
2012 – Megatrends & defining
solutions
2013 – Detailing of all solutions
2014 – Pilots &
kick-off SDV
ACIS
IPITA
Solution
landscapes
Operating
models
Roadmaps
Advisory Board Call Connected World10 June 2013-vF.pptx 16
"Efficientinfrastructure":Infrastructureto befundedand operated
privately
User
Shares
revenues
— Subway/Bus/Car-sharing3
— Parkinggarageoperators
— Roadoperators:toll/fastlane
Infrastructureoperators2
Provide:
— Public
transportation
— Parkingspace
— Fastlane access
— Tollroaduse
City
Transfers
asset
ownership4
Provides
political
framework
COMEToperator1
Funds
installation
andservice
Transmits:
— Traffic
data(e.g.,
speed,
conges-
tioninfo)
through
smart
phone
apps/
OEM
telematics
— Parking
spotinfo
Provides
directreal-
timeinfo
(e.g.,via
text msg.,
in-car
alerts)
1. Includes sensor/signage infrastructure
2. Role of REIT is to own infrastructure; Operators to run daily operations; REIT can be PPP
3. Operators w/o sufficient revenues can be funded by city
4. Transaction can either be sale or lease contract
Note: Only key players included in business model. Various extensions conceivable.
Source: World Economic Forum/BCG analysis/IP NY workshop participants
Real-Estate
InvestmentTrust
(REIT)2
Paysfor
assets
Operationalphase
Brief description
— Citysells selected relevantassets,
e.g.roads, to REIT
— REITefficientlymanagestransferred
assets and fundsother needed
infrastructureupgrades
— Citycreates politicalframework/
guidelinesforoperationof COMET
operator,infrastructureoperators,
andREIT
— COMEToperator receivesand
analyzestrafficdata fromusers and
infrastructureoperatorsas well as
otherexternalsources
— COMEToperator controls
infrastructureoperationsaccordingto
trafficdata
— Users pay COMEToperator for
services,e.g.,publictransportation,
parkingspace, fastlaneaccess and
tollroad use
— Telcosprovidedata transmission
servicesand handle payment/billing
interfaceto users
— COMEToperator shares revenues
withinfrastructureoperators and
REIT
Setsup
operatorfor
formercity
assets/
Funds
operators
Set-upphase
Exchange
userdata and
real-time
information
FinancialMarkets
Provide
financing
Sells
shares
Workshop result IP NY
Provides
political
framework
Telcos
(datatransmission and billingservices)
Paysfor:
— Fast
lane/toll
roaduse
— Parking
spaces
Controls:
— Dynamictoll rates
— Signage/signaling
— Accessrestrictions
Providespoliticalframework
FulfillSLAs
FulfillsSLAs
Shares
revenues
Cashflows Service/informationflows
Relationshipsshown:
COMETroadmapconsistsof fourphases,expanding scopeand
functionalitiesover time
Launch
toll road nucleus
Expand to
active steering
Complete
service portfolio
1 32
Source: World Economic Forum/BCG analysis
Today 2025
Fully
enable COMET
Functionality
scope
Transparencyfor
users
Active traffic
steering(incl.
recommendationsand
access restrictions)
Active traffic
steering
Trafficsteering
andunified
paymentprovision
4
Asset scope Key tollroads
operatedby REIT
Signageinstalled,
publictransport
included
Parkingincluded Tollroads,
signage,
pub.transport,
parking
Data collection
infrastructure
Floatingcar data Floatingcar data Add'lsensors
whereneeded
(e.g.,parking)
Floatingcar data
andsensors where
needed
Responsibilities of
REIT/public
authorities
Publicauthorit.
(PA) run most
operationalissues;
REITonly tollroads
REITinvestmentin
sign.,PA provide
pub.transport data&
directact. steering
REITinvestment
insensorsand
parking,approval
byPA
Fullengagement
ofREIT,PAs in
supervisoryrole
(andcontrol public
transport)
Exampleroadmap– alternativespossible
Draft– fordiscussion only
Benefitsfor...
Transparencyover traffic
situation
Activerecommendations,incl.
linktopublictransport
Smartparkingfeatures
(availability,reservation,etc.)
Simplepaymentsthrough
oneunifiedsystem
Users
Opportunityto profitablyrun
tollroads
Opportunityto op. add'l roads
andsignageinfrastructure
Opportunityto monetizesmart
parking(e.g. dynamicpricing)
Add'l revenue andefficiency
throughunifiedpayments
Companies
Efficientlyoperated toll roads,
lessoperationalresponsibility
Lower congestiondue to
activesteering andabilityto
leveragetrafficdata
Added transparencyover
parkingusage and better
utilizationofparkingspaces
Fulltransparencyover
transportsystem,no more
operationalburden
City
Rio de Janeiro
Initial traffic management systems established, but substantial room
for improvement to reach COMET value proposition
Selectedexamples of advanced projects
Real-timemonitoring
Real-timeanalytics
Intelligent steering
Dynamic tolling
Smart parking
Accessrestriction
System
focusingon
trafficsteering
to reduce
congestion;
nosmart
parking
component
System with
advanced
analytics
capabilitiesto
steertraffic,
butno tolling
andparking
capabilities
Comparably
strong
analytics,but
largely
human-
powered;no
dynamic
tollingor
smart parking
Source: ITS; roadtraffic-technology.com; IBM; Rio de Janeiro; NY Times; Singapore Ministry of Transport; U.S. Department of Transport; World Economic Forum/BCG analysis
Degree of fulfillmentof
COMETcharacteristics
Dynamic
tollingsystem
to smoothen
trafficflows,
butno
advanced
analytics
capabilities
Hong Kong Zhenjiang Singapore
privately
User
Shares
revenues
Provide:
— Public
transportation
— Parkingspace
— Fastlane access
— Tollroaduse
City
Transfers
asset
ownership4
Provides
political
framework
COMEToperator1
Funds
installation
andservice
Transmits:
— Traffic
data(e.g.,
speed,
conges-
tioninfo)
through
smart
phone
apps/
OEM
telematics
— Parking
spotinfo
Provides
directreal-
timeinfo
(e.g.,via
text msg.,
in-car
alerts)
Real-Estate
InvestmentTrust
(REIT)2
Paysfor
assets
Operationalphase
Brief description
e.g.roads, to REIT
andREIT
trafficdata
tollroad use
interfaceto users
REIT
Setsup
operatorfor
formercity
assets/
Funds
operators
Set-upphase
Exchange
userdata and
real-time
information
FinancialMarkets
Provide
financing
Sells
shares
Provides
political
framework
Telcos
Paysfor:
— Fast
lane/toll
roaduse
— Parking
spaces
Controls:
FulfillSLAs
FulfillsSLAs
Shares
revenues
Relationshipsshown:
Launch
toll road nucleus
Expand to
active steering
Complete
service portfolio
1 32
Today 2025
Fully
enable COMET
Functionality
scope
Transparencyfor
users
Active traffic
steering(incl.
recommendationsand
Active traffic
steering
Trafficsteering
andunified
paymentprovision
4
operatedby REIT
Signageinstalled,
publictransport
included
signage,
pub.transport,
parking
Data collection
infrastructure
whereneeded
(e.g.,parking)
Floatingcar data
andsensors where
needed
Responsibilities of
REIT/public
authorities
Publicauthorit.
(PA) run most
operationalissues;
REITonly tollroads
REITinvestmentin
sign.,PA provide
pub.transport data&
directact. steering
REITinvestment
insensorsand
parking,approval
byPA
Fullengagement
ofREIT,PAs in
supervisoryrole
(andcontrol public
transport)
Benefitsfor...
situation
oneunifiedsystem
Users
tollroads
Companies
leveragetrafficdata
operationalburden
City
Rio de Janeiro
Real-timemonitoring
Real-timeanalytics
Dynamic tolling
Smart parking
Accessrestriction
System
focusingon
trafficsteering
to reduce
congestion;
nosmart
parking
component
System with
advanced
analytics
capabilitiesto
steertraffic,
butno tolling
andparking
capabilities
Comparably
strong
analytics,but
largely
human-
powered;no
dynamic
tollingor
smart parking
Dynamic
tollingsystem
to smoothen
trafficflows,
butno
advanced
analytics
capabilities
privately
User
Shares
revenues
Provide:
— Public
transportation
— Parkingspace
— Fastlane access
— Tollroaduse
City
Transfers
asset
ownership4
Provides
political
framework
COMEToperator1
Funds
installation
andservice
Transmits:
— Traffic
data(e.g.,
speed,
conges-
tioninfo)
through
smart
phone
apps/
OEM
telematics
— Parking
spotinfo
Provides
directreal-
timeinfo
(e.g.,via
text msg.,
in-car
alerts)
Real-Estate
InvestmentTrust
(REIT)2
Paysfor
assets
Operationalphase
Brief description
e.g.roads, to REIT
andREIT
trafficdata
tollroad use
interfaceto users
REIT
Setsup
operatorfor
formercity
assets/
Funds
operators
Set-upphase
Exchange
userdata and
real-time
information
FinancialMarkets
Provide
financing
Sells
shares
Provides
political
framework
Telcos
Paysfor:
— Fast
lane/toll
roaduse
— Parking
spaces
Controls:
FulfillSLAs
FulfillsSLAs
Shares
revenues
Relationshipsshown:
Launch
toll road nucleus
Expand to
active steering
Complete
service portfolio
1 32
Today 2025
Fully
enable COMET
Functionality
scope
Transparencyfor
users
Active traffic
steering(incl.
recommendationsand
Active traffic
steering
Trafficsteering
andunified
paymentprovision
4
operatedby REIT
Signageinstalled,
publictransport
included
signage,
pub.transport,
parking
Data collection
infrastructure
whereneeded
(e.g.,parking)
Floatingcar data
andsensors where
needed
Responsibilities of
REIT/public
authorities
Publicauthorit.
(PA) run most
operationalissues;
REITonly tollroads
REITinvestmentin
sign.,PA provide
pub.transport data&
directact. steering
REITinvestment
insensorsand
parking,approval
byPA
Fullengagement
ofREIT,PAs in
supervisoryrole
(andcontrol public
transport)
Benefitsfor...
situation
oneunifiedsystem
Users
tollroads
Companies
leveragetrafficdata
operationalburden
City
Rio de Janeiro
Real-timemonitoring
Real-timeanalytics
Dynamic tolling
Smart parking
Accessrestriction
System
focusingon
trafficsteering
to reduce
congestion;
nosmart
parking
component
System with
advanced
analytics
capabilitiesto
steertraffic,
butno tolling
andparking
capabilities
Comparably
strong
analytics,but
largely
human-
powered;no
dynamic
tollingor
smart parking
Dynamic
tollingsystem
to smoothen
trafficflows,
butno
advanced
analytics
capabilities
privately
User
Shares
revenues
Provide:
— Public
transportation
— Parkingspace
— Fastlane access
— Tollroaduse
City
Transfers
asset
ownership4
Provides
political
framework
COMEToperator1
Funds
installation
andservice
Transmits:
— Traffic
data(e.g.,
speed,
conges-
tioninfo)
through
smart
phone
apps/
OEM
telematics
— Parking
spotinfo
Provides
directreal-
timeinfo
(e.g.,via
text msg.,
in-car
alerts)
Real-Estate
InvestmentTrust
(REIT)2
Paysfor
assets
Operationalphase
Brief description
e.g.roads, to REIT
andREIT
trafficdata
tollroad use
interfaceto users
REIT
Setsup
operatorfor
formercity
assets/
Funds
operators
Set-upphase
Exchange
userdata and
real-time
information
FinancialMarkets
Provide
financing
Sells
shares
Provides
political
framework
Telcos
Paysfor:
— Fast
lane/toll
roaduse
— Parking
spaces
Controls:
FulfillSLAs
FulfillsSLAs
Shares
revenues
Relationshipsshown:
Launch
toll road nucleus
Expand to
active steering
Complete
service portfolio
1 32
Today 2025
Fully
enable COMET
Functionality
scope
Transparencyfor
users
Active traffic
steering(incl.
recommendationsand
Active traffic
steering
Trafficsteering
andunified
paymentprovision
4
operatedby REIT
Signageinstalled,
publictransport
included
signage,
pub.transport,
parking
Data collection
infrastructure
whereneeded
(e.g.,parking)
Floatingcar data
andsensors where
needed
Responsibilities of
REIT/public
authorities
Publicauthorit.
(PA) run most
operationalissues;
REITonly tollroads
REITinvestmentin
sign.,PA provide
pub.transport data&
directact. steering
REITinvestment
insensorsand
parking,approval
byPA
Fullengagement
ofREIT,PAs in
supervisoryrole
(andcontrol public
transport)
Benefitsfor...
situation
oneunifiedsystem
Users
tollroads
Companies
leveragetrafficdata
operationalburden
City
Rio de Janeiro
Real-timemonitoring
Real-timeanalytics
Dynamic tolling
Smart parking
Accessrestriction
System
focusingon
trafficsteering
to reduce
congestion;
nosmart
parking
component
System with
advanced
analytics
capabilitiesto
steertraffic,
butno tolling
andparking
capabilities
Comparably
strong
analytics,but
largely
human-
powered;no
dynamic
tollingor
smart parking
Dynamic
tollingsystem
to smoothen
trafficflows,
butno
advanced
analytics
capabilities
COMET
Develop pilot solutions
Develop Self-driving
vehicles (SDV) topic
Condition-based
megacity traffic
management
(COMET)
Integrated
proactive
intermodal travel
assistant (IPITA)
Automated check-
in, security, border
control (ACIS)
Transparency and
traceability for
logistics
optimization
(TATLO)
Megatrends
(e.g., energy, aging,
mega-cities)
Long list of
solutions
identified...
Scenarios
(e.g., New Balance,
Mind the Gap)
... prioritized based
on business and
societal potential
1. Megatrends less understood regarding implications on the travel and transport ecosystem, exemplary blind spots from Task Force survey 2. Information and communication technology

Advisory Board Task force of over 40 companies
Aviation
Other experts
Rail
IT/Telco
Logistics
Hospitality
Automotive-
-
Connected World brings together senior executives from
transport, travel, logistics and technology
Rupert Stadler
Chairman of
BOM, AUDI
Ken Hu
Deputy Chairman,
Huawei
Luis Alvarez
CEO, BT Global
Services
Jean-Paul
Herteman
Chairman & CEO,
Safran
M. Georgiadis
President of
Americas
Operations,
Google
Tarek Sultan
Chairman and
Mgmt Director,
Agility

Agenda
Mobility megatrends and 2025 scenarios
Transformative solutions
Conclusions and next steps

9.8%
A megatrend can be defined as an exponential wave that
fundamentally re-shifts the competitive landscape
 Inexorable growth that challenges
surrounding resources and systems
 Cross-industry trend affecting numerous
businesses and geographies in a
significant way1
 A structural shift
 Relevant to business
 Likely to play out over the next 5 to 10
years
1.9
’09
1.6
’07
1.2
’05
0.9
’03
0.7
’01 ’15e
2.4
0.5
’99
0.3
’97
0.1
’95
0.0
’93
0.0
’91
0.0
2.2
1.5
1.0
0.5
’11
0.0
’13e
CAGR +30%
Global Internet users (billion)
2.5
2.0
ME and Africa
Other
Latin America
Europe
Asia and
Australia
North America
8.0%
2.2%
1.2%
8.4%
CAGR
2011–15
A sustainable growing movement with
global and significant impact … … based on reliable underlying data
Example
10.5%
1. Specific Megatrends, as rise of India or China, may be regional in themselves, but their impact is always global
Source: Graph: EIU market data

Twenty megatrends selected for their impact on the mobility
ecosystem
Changing
Customer
Needs
New
Mobility
Frontiers
New
Technology
Vectors
Key
Capabilities
for the
Future
Seamless User
Experience
New ChallengersInnovation ImperativeCustomizationSupply-Chain Agility
Social Media/Web 2.0Mobile Connectivity
3.0
E-/M-Commerce &
Multichannel Retail
Cloud Solutions/
Big Data Analytics
Information & Enter-
tainment Everywhere
Environmental ConcernsRisk & Security
Challenges
Energy Scarcity & Price
Evolution
The Infrastructure
Challenge
Internet of Things/ Smart
Transport
Further GlobalizationShift to Rapidly
Developing Economies
Aging Population More Convenience &
Time Compression
Emergence of Megacities

We then built upon trend analysis to develop four variables
Scenario variables must be vivid and distinct to be a good focus for brainstorming
— What is the holiday's itinerary, in terms of
destination and mode of transportation?
— What does the end-to-end travel process look
like?
— How did the family decide where to go and
what to do?
— How is technology engaged before, during
and after the trip?
— What does the journey look like for the
mango: origin, modes of transportation etc.?
— How does sustainability play a role?
— What are the selection criteria for this
specific mango?
— What are the logistical challenges?
— How does the consumer inform about this
product, how are groceries done?
— How will the working society look like?
— What are the different ways to arrive
at work, what are the selection criteria?
— What will the journey to work look like, what
is it like to get around in Mumbai?
— What role will technological innovations play
in the daily commute?
— How does this link to working life?
— Who called the meeting and what is the
agenda? Who attends?
— What is the tone of the meeting, what is the
general atmosphere?
— What is the competitive context?
— Which role has the end user?
— What decisions/next steps arise from the
meeting?
Vignette 1: A Scandinavian family's two week
holiday beyond 2025
Vignette 3: The journey of a mango to a French
dinner table beyond 2025
Vignette 2: The morning routine of a Tata
employee in Mumbai beyond 2025
Vignette 4: A crisis HR meeting at Google's
headquarters beyond 2025

And created hypotheses on the future of travel, transportation
and the broader world that were combined to build scenarios
Scenario 3
Mind the Gap
Scenario 1
Green
Awareness
Scenario 4
Local is King
Scenario 2
Maximized
Growth
Patterns for
suggested scenarios
Hypotheses
Journey is
vacation
Flex work
Amazon mango
Mixed purpose
Transparent
mango
Brainiac
Staycation
Ch(inag)oogle
Local mango
Geetha
Flue(goo)gle
24h life
Total
customization
War for Talent
Relocation plan
WW3
Discussion Vignettes
Scandinavian family
vacation beyond 2025
Morning routine of Tata
employee in Mumbai
beyond 2025
Journey of a mango to a
French dinner table beyond
2025
Crisis HR meeting at
Google HQ beyond 2025
1
2
3
4

2025 scenarios to imagine and prepare for potential futures
and changing demand for mobility products/services
#I
New
Balance
#III
Mind the
Gap
#II Maxi-
mized
Growth
#IV
Local is
King

Scenario I: New balance
1. Definition by World Business Council for Sustainable Development: Preserving the natural environment, meeting the travel needs of the population, supporting a good economy, minimizing infrastructure
costs, maintaining energy security, ensuring long-term viability of the transport system
The following drivers changed the world
— The world experienced a growing number of natural disasters
— Middle class has grown dramatically by rising education levels, at the same time community sense is rising
— A green revolution driven by RDEs impacted world politics and society, most countries obey Kyoto II and III
— A new wearable data device with neural link to its owner revolutionized information processing and communication for everyone
(enabled by data privacy norms and trust in cloud solutions)
— High investments in extensive public transportation infrastructure
The scenario is characterized as "Green" and "Sustainable"1
— Carbon-pricing regulations almost everywhere
— Companies incented based on societal values (environment, education,
etc.), and societal costs are priced into goods/services (products carry data
tag with carbon footprint, etc.)
— New green technologies contribute to saving CO2 emissions
— Transparent information and new communication tools enable to efficiently
take environmentally conscious decisions and to switch between different
means of green transport
— A new, more balanced, healthy lifestyle gains worldwide popularity
— The world is more decentralized: Fruit/vegetables come from sustainable
greenhouses in all climates, local production experiences a renaissance by 3D
printing
— Holidays are more often local and business travel frequently substituted by virtual reality
Backup

Scenario II: Maximized Growth
The scenario is characterized as efficient and prioritizing economic
objectives
— Economic drivers of core interest, the society is individualistic and status-
oriented
— The environment is suffering increased pollution levels, esp. around
megacities, on the other hand it is cheaper than ever before to travel far away
to reach green escapes
— Climate change is leading to migration streams away from adversely
affected areas
— Travel has wide mix of purposes: vacation, work, study, and medical
treatment often combined
— ICT-driven start-ups arise with cloud solutions, social media, and big data,
which, e.g., provide automated booking of wishes not even expressed yet.
People and goods are tracked electronically everywhere.
— Global trade volumes highly increased, World Travel and Trade Treaty of 2020 made borders almost meaningless
— Politics focusing on economic growth, standardizations facilitate interconnectivity and intermodal transport
— A spurt of inventions has led to a new era of efficiency and automation, e.g., in fuel efficiency and ICT solutions
— Secure Internet/Cloud solutions provide seamless e-processes
— High public/private investments in efficient infrastructure
— In megacities, many people work remote, traffic flows need to be optimized for connected cars
— Supply chain efficiency increases by online orders, intermediation, and better matching of supply and demand. Consumers in general
pay lower prices
Backup

Scenario III: Mind the Gap
The scenario is characterized by a split society and market
— Megacities consist of a "rich" area with advanced infrastructure
surrounded by areas with outdated infrastructure
— The rich can afford comfortable travel and transportation. But for the
masses, urban transportation is a challenge, with a lot of time devoted to
working and commuting
— For those who can afford, there are huge opportunities for customization
and choice, products carry data tags (showing origin, freshness, etc.), but the
masses consume cheap, standardized products
— Augmented-/virtual reality solutions used by all, but only rich can afford latest
technology as personal robots or self-driving cars
— The political system has developed towards an autocracy advancing certain population groups
— Society split into richer 20% and large lower-income group (80%)
— Governments establish basic food, health services, and safety measures to maintain stability
— Rising energy prices limit individual mobility of lower-income class
— Infrastructure investments followed interests of wealthier tax payers
— RDEs continue to gain power at the expense of former "first world" countries (China just acquired Google)
Backup

Scenario IV: Local is King
The scenario is characterized as focusing on local travel and trade
and establishing control
— Preference of regional products and services
— Local focus results in broad variety of industries in each country,
large nations get almost self-sustainable
— Countries use protectionism, border crossing is time-consuming and expensive
— Government-steered companies gain importance
— Extensive control mechanisms and security checks hinder efficient
travel and transportation
— Internet usage and social networks experience sharp decline, ICT investments
drop, high security measures (firewalls everywhere,
migration of public to more isolated private clouds)
— Many megacities are transportation disasters with a struggling
economy
— Cyber attacks, regional conflicts, and another bird flu affected the world and led to a new recession and globalization concerns
— Trust in Internet solutions is lost due to hacking and manipulation
— The by then highly popular driverless cars have been hacked in 2023, deadly crashes resulted in a ban from streets
— Worldwide rising oil prices drive transport costs
— Reduction of worldwide wage arbitrage effects as RDEs have caught up regarding wages
— Economic recession led to cuts in public infrastructure spending
Backup

Agenda

4 cross-industry solution ideas were prioritized from the long
list created in the scenarios
>100
Cross-
industry
Strong ICT
component Prioritization
33 25 4
Sector call results
Prioritized solution
ideas
Prioritized based on
business opportunity and
benefits to society

2
3
2
543
5
4
Vehicle operator and
passenger health analytics
Preventive vehicle mainte-
nance & safety systems
Logistic drones
Tracking & transparency
based logistic optimizer (TATLO)
Driverless swarm
cars service
Business opportunity
Benefits to society
Integrated intermodal
mobility provider
Condition based megacity
traffic management (COMET)
Holographic communi-
cations platforms
Mobile living room
and virtual office
Fully automated check-in,
security, border control (ACIS)
Mobile pop-up hotels
Integrated proactive inter-
modal travel assistant (IPITA)
Four solution ideas were selected for further research based
on input from task force
Lowest ranked
solution
Top ranked
solutions
Medium ranked
solutions
Note: n= 35
Source: Connected World Task Force Survey on solution ideas, November 2012

ACIS: How to make immigration and airport operations safer
and more comfortable
Illustrated for the World Economic Forum by the ValueWeb

ACIS: Clear benefits for travelers and governments
Travelers have access to smoother visa
application and customer experience at airports
Customs and border control can operate
more efficiently by focusing only on high risk-
individuals
Tourism agencies can attract larger numbers
of travelers
ICT firms can build business around selling the
required hardware and software
Value proposition
Storing and processing personal data
— Clear guidelines on sharing and storing data
— Initially an opt-in process where people accept
sharing data in exchange for smoother travel
— People with right to access their data
Standardizing online processes
— Starting with national databases and systems
that can be integrated on regional leveel
— Using trading blocs (ASEAN, NAFTA etc.) as the
basis
Cost of investment
— Build the system gradually
— Introduce features first as a premium service
paid by e.g. service fees
Key challenges and solutions

Traveller
(or company)
Pays smart visa
application
fee
Visa and
PAIP processor
Submits smart visa
application/biometric
info
International
database
operator
National
database operator
Shares for
installation and
service
National
immigration
Funds and
maintains
Defines smart visa
application rules
Checks and updates
applicant's travel/visa
history
Shares fees
Grants/denies smart visa and
PAIP application
Checks PAIP access
applicability of traveller
Interpol/
Europol
Checks
Risk
classification
database
Applicant's travel/visa history;
deposits smart visa and biometric
information
Provides PAIP
access
Checks
Cash flows Service/information flows
Relationships shown:
ACIS: How would the visa process operate
Note: PAIP = Preapproved immigration programme
Source: World Economic Forum/The Boston Consulting Group analysis

International
smart visa
database
operator
Traveller
(or company)
Security operator
Airlines/
airline
alliances
Airport
operator
Risk classification
database
Submits personal
information
Provides preferred service
Transmits data &
risk classification
Pays usage
fee
Provides risk
classification
Pays ticket and
preferred service
Forwards
screening and
check-in
information
Pays for
service
Provides hardware
Pays for
service
ACIS: How would the airport operate

COMET: How to better control city traffic

COMET: $2-10B benefits for a megacity
$2-10B benefits over 10 years per city
400M less hours spent in traffic
40,000 accidents prevented
2M tons reduction in CO2 emissions
200M gallons reduction in fuel consumption
Value proposition
Creating the public-private partnership model
— Define financial & operational metrics in the SLA
— Transparent implementation process with costs
and benefits communicated clearly
Managing traffic data effectively and safely
— Guidelines on storing and sharing data
— Not storing PII1 data
Cost of investment
— Build the system gradually
— Start with low-cost, high benefit features such as
smart parking
1. Personally identifiable data

COMET: How would it operate?
Installation and service
funding
Traffic updates
Payment for
assets
Political framework
Payment for
services
Political framework
and asset ownership
Control
systemInformation
Political framework
Shares
revenues
Shares
revenues
Provide services
User
Public
authority
(e.g. city)
Infra-
structure
fund
COMET
operator
Infra
provider

IPITA : Smoother international travel

IPITA: clear benefits for travelers and travel industry
Travelers can travel easier, faster and at lower
cost
Tourism destinations can attract larger
audiences
Travel and hospitality operators can target
their audiences better and attract larger share of
traveler spending
Technology firms can generate new business
by operating the infrastructure and software required
Value proposition
Getting access to required data
— Incentives needed for transport providers and
others to provide data
— Standardized formats needed to aggregate data
easily
Protection of private data
— Personal data need to be stored at front-end
— Data to be stored nationally / regionally with
clear conventions on storage & sharing
Avoiding monopolistic situation
— IPITA back-end doing only data aggregation
— Multiple, competing front-ends with access to
same data

IPITA : How would it operate?
Real-time capacity and
price information
Booking confirmations
Bookings/reservations and
customer information
Share of
payments
Personal details and
preferences,
service and booking
requests
IPITA service,
bookings and
advertising content
Real-time data
Pay fees
Pays for
bookings
Transport-
ation
providers
Service
providers
IPITA
back end
IPITA front
ends
Payment
platform
Traveler
(or company)
Data
providers

TATLO: The fully digital supply chain

TATLO: Clear benefits through supply chain
Shippers can send and receive goods faster and
cheaper with better transparency through the
process
Transport providers can benefit from lower
costs and larger volumes of traffic
Public authorities would have higher
transparency into trade flows and higher efficiency of
customs operations
Technology firms can generate new business
by providing the infrastructure and software required
to operate the system
Value proposition
Cooperation within industry and duplicate
inititatives
— Bring together key stakeholders to consolidate
views and
— Align on required specifications and standards
Regulation and standardization
— Select suitable standard: Choose new standard,
use existing standard or adjust existing standard
— Communicate chosen solution comprehensively
Insufficient funding and lack of infrastructure
— Suggest funding options
— Monitor implementation to avoid freeriding

Consignor
/shipper
Nat'l government
authorities/
customs agencies
Consignee/
buyer
Freight forwarder/3PL1
Freight forwarder/3PL1
Freight
forwarders/ 3PL1
Single window
Service/information
flows
Flow of
goods
Cash flows
End
Customer
Carriers
Single window
Purchases
goods
Updates on
order size,
shipping status
Purchases
good(s)
Updates on shipping status,
delivery date
Pays for
transportation
service
Pays for
transportation
service
Pays access
fee
Pays access
fee
Updates on shipping status,
delivery point of time
Updates on shipping
status, delivery time
Continuous information flow to enable
smooth movement of goods
Paperless
information
flow
Paperless
information
flow
TATLO: How would it operate
1. Third-party logistics provider
Nat'l government
authorities/
customs agencies

Agenda

Stakeholder management, role of technology and data
emerge as common recommendations
Technology only
part of solution
Most of the technology for the solutions is in place
— Main challenge lies in bringing the pieces together and creating
a sustainable business model
— Most benefits come from using existing technology in new ways
Trade-off between
availability and
security of data
Data needs to be both available and secure
— Large part of the benefits come from making data more
interchangeable and accessible
— To address privacy concerns, users need to know what data is
stored and have the ability to access and erase it
Public-private
partnerships
All solutions involve both private and public sector
— Successful implementation requires governance model where
both parties benefit
— Alignment of interests and effective governance needed

What's next: Launching pilot implementations of selected
solutions and developing self-driving vehicles
ACIS
Facilitate discussions with governments on the benefits of visa
restriction removals
— The Forum to act as a platform for governments to work together on joint
visas and smart visas
COMET
Initiate discussions with interested cities around the world on COMET
— Bring private and public stakeholders around the table
— Help to articulate how COMET could look like for their city and what the
benefits are
IPITA
Create consortium interested in implementing IPITA pilot
— Both established industry players and new technology start-ups
— Bring in interested local or national governments for a pilot discussion
Self-
driving
vehicles
(SDV)
Develop Self-driving vehicles as an independent topic
— Engage with key stakeholders (OEMs, suppliers, insurance and tech firms,
governments)
— Help to identify obstacles to adoption and formulate industry roadmap
Pilotsolutions

For more information and the full report visit
reports.weforum.org/connected-world-2014/
bcg.perspectives
Videos on solution spaces
• IPITA: Integrated Proactive Intermodal Travel assistant
(http://www.youtube.com/watch?v=0MjxiC2pgLE&feature=youtu.be)
• COMET: Condition based megacity traffic management
(http://www.youtube.com/watch?v=Meh359rr014&feature=youtu.be)
• ACIS: Fully automated check-in, security, and border control
(http://www.youtube.com/watch?v=hRyv0aLgsxw&feature=youtu.be)
• TATLO: Tracking- and transparency-based logistics optimizer
(http://www.youtube.com/watch?v=L_PAyvzuHII&feature=youtu.be)

Thank you
bcg.com | bcgperspectives.com

Connected Travel Hyperconnected

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