Yesterday’s post High Speed Rail in China – Theft or Innovation? (Part 1) looked at ownership of ideas and innovation, specifically in terms of China’s role in the the advancement of HSR technologies. Following that train of thought (couldn’t help myself!) today I’ll look at what this means for the CPT industry, starting the discussion on the future of CPT transit and innovations.
Traditionally HSR manufacturers focused on incremental innovation. Today, however, Chinese manufacturers are pursuing large-scale disruptive innovations. Disruptive technologies tend to thrive in high growth markets where owners of existing technologies are slow to innovate — at least beyond the pace set by sustainable innovations which are in demand by a pre-existing customer base. Where as incremental innovation generally involves low cost and low risk, disruptive innovation means high cost and high risk since it requires significantly more R&D.
MARKET: As we’ve seen with HSR, and as discussed in yesterday’s post, if a growing market is not being effectively provided for by an existing technology, someone will find a way to improve upon that technology in order to satisfy the market need. While CPT has not yet experienced the same growth as HSR, it has certainly been fielding greater interest. With an increasing number of urban installations and proposed high profile systems the market does appears to be growing. Since all signs indicate that this growth will continue I would argue that CPT will be subject to the same market threats as HSR.
INNOVATION: In the instance of HST, Chinese engineers took a highly advanced technology and (in most cases) improved upon it through genuine innovation. One could argue that gondolas are also a highly advanced technology. While HSR had four major manufacturers, there are only two major ropeway manufacturers. Whether less competition has resulted in less innovation, that is a matter of speculation! Still, it is well known that competition in a growing market drives innovation and technology benefits from offering a faster, cheaper, more capable products. Is there room for significant innovation in the cable industry? I would think so, especially for urban applications.
COST: The Chinese have already dramatically decreased the price of HSR, which was originally being built for around US$100-200 per kilometre. According to Wikipedia the Chinese have completed 250km/h to 350km/h HSR lines for US$6-32. Further investigation is required into these surprisingly low figures and what factors are attributed to these vast price disparates. Constructing anything at 70% the cost of your competitors would definitely be considered a competitive advantage. At less than 25% of the cost per kilometre, that’s a game changer!
Should the ropeway industry be concerned? I would think so. Is it helpless? Definitely not! What it can do about it is a post for another day.
What is your opinion?
This post was written by Ryan O’Connor. A planning and transportation professional based in Wellington, New Zealand. Ryan has been involved with Creative Urban Projects since March 2010.
2 Comments
Something to consider in the Chinese price is that’s the price to build it in China. Labor in countries like China is very cheap. I watched a subway being built in Delhi, and digging a tunnel involves a bunch of guys with shovels – not quite the sophistication of a tunnel boring machine, but much cheaper and you end up with a similar result. I didn’t see any transit construction in China, but I did see brickwork being constructed on the Bund in Shanghai and it was a guy with a bucket of mortar and a pile of bricks – no pre-manufactured panel of colored concrete that we call brickwork in the west. My point is that moving Chinese technology to another country might scale back up in price as you add high-wage Western workers (though the machinery itself might not go up much in price, except from shipping).
I’d love to see the Chinese embrace gondolas. That would change the game overnight.
Its not that the Chinese rails, sleepers, trackbed, overhead power , etc. is so much cheaper than in the west. Did you note how fast the can plan build and operate t a new HSR line. If you do the same in a democratic country you have dozens of variants, thousand of objection, demonstration against the project, small town which also want a HSR station. All those extra planning cost money. So do the extra detours, extra tunnels, extra stations etc. Not to say that in China the country itself owns all land so they just can take it away and pay a minimum compensation to built something.
See the mess in Stuttgart. The have an old terminal station which through trains need to change direction. It is in a state of disrepair and inefficient. Now the want to replace it with a modern station. Which shortens the time fro trough trains considerable. But they face massive protest delaying the project and add millions of Euro extra cost. For no benefit at all. In China those protester would be in a correction camp for a few years and the station already built.
For cable technology its the same. If you own a mountain and ski resort you just can plan and built a gondola at reasonable cost. Go to any already developed environment and the cost will easily quadruple. Using the same ropes gondolas whatsoever.