The Technology Strategy Board UK and Regional Transport Funding

1. The Technology Strategy Board • UK and Regional Transport Funding • Stephen Hart – Lead on Transport Systems

2. A brief history… • The original DTI Innovation Unit and advisory “Technology Strategy Board” was set up in 2004 • It was spun out of government as a “non-departmental public body” in July 2007, relocated to Swindon and staffed with people from business • Since then our budget has increased from £250m to £440m a year • Independent evaluation suggests that we have increased the return on that investment from £4 to over £20 for every £1 used by focussing on challenges and building the community • We are now the UK’s Innovation Agency

3. What is the problem we are addressing? • Business investment is too low and too late • Technical and financial risks need to be mitigated • The time for financial return is too long for many players • Innovation disrupts value chains and business models • New partnerships are required to build new supply chains • Investment and innovation is required at multiple points • Longer term trends not visible to all players • Impact and opportunities from emerging technologies & policies • Innovation infrastructure complex and inefficient • Fragmented and difficult to navigate • Government does not make best use of its levers • Procurement, regulation, standardisation, fiscal incentives

4. What are our Criteria? • Market • What is the current and projected size, how fast is it growing, who are the competition? • Capability • Does the UK have a strong research base in the area, the skills, the business capacity? • Timing • Is the cost curve balanced by the value curve? • Additionality • Why should the taxpayer support this project?

5. Thematic Focus

6. Lets Take a close look at Transport? • Today's transport will be tomorrows challenge, The scale of demand for global transport is astonishing, its essential in every aspect of our daily lives, supporting the UK economy through the movement of people and goods, getting people to work and food to the supermarkets. • With a world population now standing at seven billion people, the expansive global network of 30 million miles of roads carries a staggering 80 billion kilometres of passenger travel and nearly 30 billion tonne kilometres of freight every day. Meanwhile a massive merchant fleet of 50,000 vessels delivers 570 million containers to ports around the world.

7. Transport is the means.....................

8. Mega Trends Energy Social & life style Technology & innovation Urbanisation & Smart cities Manufacturing Congestion Pollution & resources Utilisation Demographics Smart Infrastructure Healthcare Retail Tourism Logistics & Freight Open platform and Smart and reactive architectures Business Sectors that rely on transport – the customer Transportation means Researching the trends for future markets

9. Sizing the market for transport - evidence • In the UK, we travel some 670 billion kilometres each year by car, bus, and rail, spending around £190 billion on cars, commercial vehicles, roads, fuel and related motoring expenditure, railway and bus tickets and infrastructure subsidies. Households spend around half of this, with fuel making up the lion’s share (£26 billion per year) followed by vehicle purchases (£19 billion per year) with repairs and servicing making up another £7 billion per year. Globally is £11.5tr • Quarter of a trillion tonne kilometres of freight is moved around within the country every year. While 70% of this travels by road, a surprising 19% travels by water with the remaining 10% travelling by rail. While valuing this is difficult, CEBR estimate that road freight costs companies around £42 billion per annum compared to only around £1 billion for rail freight. • Total trade in physical goods has risen from £3.4 trillion to £11.4 trillion between 1997 and 2012. World trade encompasses 25% of total world GDP compared to 18% in 1997 which illustrates the increased openness of the global economy.

10. Users: Account for ~30% GDP and over £600bn revenue, potential to unlock vast productivity gains in 4 industry sectors alone....... £126 £292 £115 £75 Billion Billion Billion Billion Value of logistics to the UK economy (Skills for Logistics) UK Healthcare Spending 2011/12 (UK Treasury) Value of Direct and indirect tourism to the UK (Visit Britain) 2010 Retail sales exc. Automotive Fuel (ONS) Projections in capacity growth ....... 35% 21% 127 101% (000) Estimated growth EU passenger mobility 2007-15, with 50% increase in freight AM Train Services to London with overcrowding (ORR) Increase in RoRo traffic 2005-30 (DfT) Chinese tourist visits to the UK 2010, compared to 500-700k in France/ Germany (GLA)

11. Is capacity the problem? • A reported statistic from the CBI value’s congestion at around £20 billion per annum = lost revenue to the UK’s GDP, and to businesses • Although people are frustrated with the frequent delays, we still persist in “thinking inside the box”, using and installing fragmented and local solutions and with the limited infrastructure to throw more vehicles at the problem, rather than thinking more intelligently, and using the intelligence within the system, to optimise assets and inform our actions, or needs. Acting in isolation is congesting our environment and our ability to function. • How we move people and goods more intelligently relies heavily on interaction and interchange of a number of components, transactions, interdependencies and connectivity; it is inefficiencies between these that create wastage in the overall system, which, in its own right leads to additional overheads to manage those interactions. Equally, this wastage between interactions results in lost time, poor flow and inefficiency in the overall transport system, thus hindering our ability to move people and goods more efficiently.

12. Time to think “out of the box” and transform.............!

13. Transport systems integration • Systems integration which in engineering terms is the process of bringing together the components and subsystems of transport into one, or a more connected local system to ensure they function more systematically together, therefore, the act of “gluing” different transport systems physically, virtually or functionally so to act as a coordinated whole, or part, provides opportunity in overcoming wastage, using innovation to drive change.

14. Market opportunities – est £900bn • The vision for the future is that user’s will demand more from innovation and technology as capacity saturation grids to a holt, the user becomes the customer, setting specification and requirement for innovation that's is likely to be centred around configuring cross mode and node products and services that are, flexible, informative, decisive, and above all reactive to the pace of innovation. • To do this he UK needs to engineer future skeleton and reactive architectures, integrate systems to address the issues of wastage across borders. To bring into existence the ability to interpret between components, data and information, thus seeking to create an industry which will make work complex interfaces by translating language between technical, commercial products, services. Driving collaboration across sectors and attracting new and emerging industries into the transport arena.

15. Competitions Collaborative Research and Development Used to drive engagement between businesses or with universities – in themed areas and communities Feasibility Studies Used for early stage ideas in thematic areas to test potential Smart Used to support single companies in areas they choose SBRI • Contracts with Government Departments that lead to procurement

16. Other Mechanisms LaunchPads • 2 minute video Application process • 50% funding offered “up front” …with 12 months to match • First run in Tech City in 2011 - 15 of 18 companies successful Missions • Joint activity with UK Trade & Investment (UKTI) • Take new companies to a global centre in their area where they meet potential customers, suppliers, competitors and funders - First 4 raised over £100m of funding

17. Knowledge Transfer Partnerships Access knowledge, technology and skills from the UK knowledge base Embeds a recent graduate within a host company to transfer knowledge and skills from academia into industry. National Network of Advisors help identify the needs in companies and match with the knowledge within the research base. Training and development support given to the “associate” along with close supervision from a senior academic supervisor

18. http://www.innovateuk.org/transport Email : stephen.hart@tsb.gov.uk Mobile 07833437099 Stephen Hart Lead on Transport Systems THANK YOU