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Smart Rail Economies - Bringing the 4th Industrial Revolution to the Masses

27 August 2018

As South Africa adapts to significant advances in the "fourth industrial revolution" of global technology, exciting opportunities are opening up for innovators to meet the demands of communities for a better life for all.

In 2001 the Gauteng Provincial Government set its sights on supporting tech startups with a core focus on meeting socio-economic challenges in collaboration with one of the country's leading innovators, Mark Shuttleworth.

This brought about the launch of the Innovation Hub in Pretoria – an incubation centre to help entrepreneurs lock their innovative minds on tackling some of South Africa’s key challenges through technology.

As South Africa becomes driven by the vision of building entrepreneurial flair, there have been many tech success stories, but their focus has been predominantly on providing middle-class solutions.

For example, Takealot.com has been able to take advantage of the increase in e-commerce over the past five years to expand into food delivery services. The online shopping platform reportedly processed more than 2.9 million transactions between 2016 and 2017, earning revenue of R2.3 billion.

While this can prove that South Africa has the ability to build successful online and tech businesses, there are few tech innovations that transform the lives of township communities in a profound way.

Soweto, for example, with its population of 1.3 million people provides endless possibilities for high quality tech solutions to fundamental socio-economic challenges.

One major sector is transport. While Metrorail transports more than two million commuters nationally every day, the state of trains has left this mode of transportation less than desirable to those who need it most.

There have been recent calls for the Passenger Rail Agency of South Africa (PRASA) to accelerate their modernisation programme as commuter dissatisfaction reaches violent levels.

This should be seen as an opportunity for innovators to meet such demands when presenting ventures to investors. 

With high levels of foot traffic and occupancy at train stations daily, one innovative solution can be to revamp stations to become Smart Rail ecosystems.

When embracing the fourth industrial revolution, there are many ingredients for a new rail network ecosystem.

One is digitalisation, in which payments, train access and timetables can be managed to ensure the rail network runs in the most efficient manner possible to provide its core function of moving commuters between different locations.

Gautrain can serve as an example of how best to manage the day-to-day functions of the train system.

Access cards and mobile applications that allow commuters to manage their transport could allow for payments via mobile debiting systems.

Much like linking taxi services online to a bank card, this could shorten the time commuters spend at stations and reduce the security and logistic risks of handling cash.

Mobile phones have fast become access cards to so many conveniences, and South Africans have rapidly become mobile-centric with smartphone penetration seeing phenomenal growth.

Daily routines are becoming digitally linked via smartphones and the transport sector can derive many powerful benefits from data generated by mobile phones moving in and out of the rail network ecosystem. 

A second ingredient for a new rail network is "Big Data", a component of which is behavioural data used in marketing to understand consumer habits. For example, behavioural data can help determine when best to visit a mall based on foot traffic, or to sell certain products. Such data helps businesses adapt marketing and sales to times and seasons that best suit customers.

For Smart Rails, Big Data can help operations run efficiently and cater for demand based on behavioural elements like peak and off-peak time commuting, and what rotations work best for different days of the week.

Big Data can also be used to run commercial activities, turning train stations into media assets. Advertising is all about buying eyeballs, and commuters are consumers. With Big Data a train station can generate additional revenue through advertising sales and provide powerful marketing experiences.

A third ingredient could be the Internet of Things (IoT), which refers to the integration of various digital devices to interact online.

While much financial and intellectual capital can go into the integrated running of the train system, attention can be given to the key elements of running a secure, interactive and commercially strong ecosystem by looking into replicating the consumer driven environment of malls and small shopping centers.

By tying this entire concept back to the development of entrepreneurs in townships, an innovative retail ecosystem drives the availability of products and services relevant to the market.

Township outlets could use IoT to introduce new forms of trade to township economies while digitally integrated point of sale (POS) systems help shopkeepers manage stock and transactions more efficiently.

Transactions between vendors and consumers could be made cashless with WiFi connections that allow transactions to be made on a stable network and tracked through mobile and online platforms which incorporate a digitally enhanced real-world shopping experience.

For security, commuters could report any malicious acts or safety risks via a mobile app, while an integrated rail management system could flag maintenance issues as they arise.

These ingredients can all help make up a recipe for a future Smart Rail network casserole. With the right parties and innovative methods on how best to prepare this casserole, township communities can be fed with a concept that improves their lives through economic and technological empowerment geared towards the transportation of tomorrow.

Such innovations can connect the functions and operations of a rail network in a way that caters to the demands for efficiency, safety and reliability by township communities -- demands that should not be taken lightly.