Introducing New Technology to the Railway Industry: System-Wide Incentives and Impacts

Abstract

This article is concerned with the role of innovation in cost reduction and the mechanisms for bringing it about. In the first section, it investigates the efficiency of UK's railways through the medium of cost benchmarking of both UK and continental European costs. It finds that Britain's rail infrastructure manager faces an efficiency gap of 40 per cent against European best practice and that train operating costs have also risen substantially, both because of rising factor prices (wages and fuel) and because of deteriorating productivity. It then explores the situation surrounding incentives for shaping technological innovation through a series of semistructured interviews with senior managers representing a wide range of railway interests. This section highlights the presence and successful functioning of the commercial mechanism for technology development in the industry both through natural commercial factors and through mechanisms such as track access charges. Finally, it studies the feasibility of modelling systems subject to technological change, with the aim of creating a methodology to assess, at an early stage in the development cycle, the physical impact innovation might have on the existing system. It finds that the objective data needed to construct such models can be extracted from existing technical standards and that systems engineering techniques provide a suitable framework for structuring and linking that data.