HackTrain publishes report into the barriers to innovation in the rail industry
Innovation consultancy, HackTrain, has released a new report analysing the key commercial, data, cultural, procurement and funding barriers that prevent rail from taking advantage of new technology.
The Bringing Actionable Recommendations to Revitalise Innovation and Entrepreneurship in the Rail Sector (BARRIERS) report is based on the evidence of more than 60 interviews conducted over a 6 month period. It has identified 5 key barriers:
The franchising system is not designed to drive or reward innovation
Once a franchise is agreed, there is no more competition and hence no pressure to innovate because the franchise contracts have input-oriented specifications. In addition, investment takes place early on in the franchise to get maximum value for money, meaning there is not much change during the final years of a franchise and customers notice. Interestingly, the Innovation in Franchising Fund administered by RSSB is one of several attempts to drive innovation, however the opportunity is hindered by several administrative and bureaucratic barriers that prevent it from fulfilling its full potential.
Procurement frameworks are unfit for entrepreneurs
The ability to access contracts is difficult, and to get non-safety critical technology off the ground is difficult and long-winded. There is no clear process for trialling non-safety critical technology and there are limited resources for those technologies to be tested. Moreover, procurement cycles can take 8-12 months which makes the rail industry very hard for startups and entrepreneurs to enter. Such uncertainty can deter the best talents from entering the industry.
Data is fragmented, siloed and unreliable
In the rail industry, open data feeds like Darwin and LENNON are unreliable and there is no documentation for developers. Technology contracts inhibit innovation partly because they have unreasonable data ownership constraints. Also, the processes for measuring customer satisfaction are inaccurate and inefficient. For example, the National Rail Passenger Survey (NRPS) ran by Transport Focus is the primary tool for customer feedback data collation. The survey is paper-based and received 54,557 responses in 2015. There were 1.5bn rail passenger journeys in 2014/15 so this represents just 0.0033% of the journeys taken. Updated (Summer 2016): the survey has now been cut to four pages, which is meant to be a massive reduction of questions from the previous survey.
The funding landscape is difficult to navigate with several limiting factors
There are very limited private funding options so it is critical for the rail industry to offer public funding options. Although there are several public funding options, they can be hard to access and onerous in their restrictions. The obstacles are often too large for small and medium-sized enterprises (SME).
The culture in rail is resistant and reluctant to grasp innovation
Mindsets have to change so that rail is seen as a service that needs to keep up with the rates of innovation in other industries to remain viable. It is vital that train operating companies listen to their customers, otherwise they face being left behind. In order to make a permanent culture change, Hack Partners has proposed 6 actions that need to be taken, including: being more proactive, driving ownership of innovation, rewarding disrupters and innovation leaders, and embracing technical aspects of the rail industry.
The report also makes 13 tangible recommendations on how to improve the industry. Among these are: creating an innovation centre for rail, and an innovation manager within all train operating companies; the report questions whether RSSB should oversee innovation; it suggests that the Department for Transport should commission a Data in Rail report to get an understanding of the state of data in this industry; there should be one industry-wide monitor of customer satisfaction levels that works in real-time as opposed to Transport Focus’ monolithic NRPS which takes place every 6-months; and finally, grants should also be handed out differently as opposed to the current method of giving most of the money to large companies.
According to HackTrain: “Everyone has their individual judgement of the industry’s flaws, claiming that the franchising model doesn’t work, data is too fragmented, or that the culture in rail is unsuitable for innovation… they have all been right, but have also fallen short of truly understanding what exactly is wrong at the industry’s core, and more importantly, coming up with working solutions for the problems in industry.”