The way we move is quickly changing. What does this mean for the private sector?

World Bank
Jul 30, 2019 · 4 min read
A smartphone user is requesting a ride in Bandung, Indonesia. Photo: Fikri Rasyid/Unsplash

Transport and related industries are in the midst of a radical transformation driven by fierce competition, multiple new entrants, new business models, and constant innovation. In a previous blog post, we reflected on how these changes may impact society and development at large. But what’s in it for the private sector? What constraints do private companies face to innovate and create the mobility solutions of the future? What could the public sector do to help them? To find out and inform its upcoming Global Roadmap of Action Toward Sustainable Mobility (GRA), SuM4All conducted a survey of more than 25 large corporations covering all the value chain — raw materials, transportation services, equipment, digital services, manufacturing, financing services, energy, and consulting. Last June, the findings of the survey were presented at the Movin’On Summit in Montreal with representatives from Paribas, Alstom, Michelin, WBCSD, Ernst & Young, and SuM4All.

Here’s what the private sector told us:

  1. Partnerships are increasingly important to the success of private companies. The ongoing mobility revolution has brought new opportunities, but has also created a more complex and volatile business environment. In the face of such rapid and fundamental change, there is a strong sense among companies that no sector or industry can succeed on their own, and that partnering with others has become the only way to survive and prosper. As the CEO of a high-end leading car brand noted, “we have sold cars for a hundred years. That model is no longer profitable. We now need to sell mobility. We are not yet equipped to do so. Succeeding in that new space would require interactions with a range of actors we have never interacted with, such as local administrations and energy companies.”
  2. Consistent public policies will help the private sector plan for the long term. The current pace of change is making it hard for companies to anticipate demand, adapt to the market, or plan long-term investment in research, development, and production. Against this backdrop, the public sector can play an important role in providing some degree of stability and predictability. But this requires countries to commit to a solid vision for sustainable mobility, and to bridge the gap between (shorter-term) political cycle and (long-term) industrial investment cycles. One way to achieve is to establish legally binding long-term mobility targets, along with a consistent legal and regulatory framework. Companies also highlighted governments’ role in producing and publicizing mobility data, raising awareness on the social and economic cost of the current mobility model, and promoting behavior change–which, ultimately, would help boost consumer demand for new mobility solutions.
  3. There are more instruments that the public sector can leverage to accelerate innovation. Although largely unused, public procurement can be an effective and relatively straightforward lever to advance sustainable mobility: the mobility products and services commissioned by governments are often worth millions of dollars, giving them significant influence and bargaining power over companies competing for their business. Therefore, by setting more stringent requirements — with regard to performance, cost, environmental impact, etc. — public clients can give the private sector new incentives to innovate. When it comes to new technologies, there is a strong sense that public decision makers should be setting clear targets and timelines while remaining “technologically neutral”, focusing on leveling the playing field instead of promoting one technology over another. This would mean, for example, putting in place carbon pricing mechanisms and incentives for “clean vehicles,” instead of choosing a specific technology (e.g. battery vehicle vs. hydrogen).

I was extremely pleased to receive such detailed and constructive input from our counterparts in the private sector. For SuM4All, this kind of insight is critical, and will go a long way in making sure the policy recommendations included in our Global Roadmap of Action (GRA) be as comprehensive and realistic as possible.

As we continue our journey toward sustainable mobility, one thing is clear: both the public and private sectors have a role to play their part. The two sectors intersect at one level: policies. By proposing an integrated and comprehensive policy framework to achieve sustainable mobility, the GRA fills an important gap to move from ambition to action. Stay tuned for the official launch of the Roadmap in the fall!

This recent workshop was led by Michelin on behalf of the SuM4All Steering Committee, with support from the World Business Council for Sustainable Development (WBCSD) and Ernst & Young. The session took place on June 4th in Montreal during the Movin’On Summit, a global event that brought together over 5,000 transport and mobility professionals.

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