Last year Singapore Changi Airport, a gateway renown for delivering top quality customer service, became the latest in a growing line of airports to create an innovation lab – a place where researchers are free to conceive, develop and test emerging airport technologies and business concepts.
Airport executives are repeatedly being told that concepts such as ‘disruptive technology’, ‘big data’ and ‘innovation accelerators’ are transforming – or are reported to be transforming – many industries and that they have some important role to play in airport operations and management. But what role exactly?
If the goal of the modern airport CEO is to structure the business to be customer-centric, data-driven and tech-enabled, shouldn’t the tech part be driven solely by the airport’s core mission rather than by taking the airport into new and uncharted territories?
The problem with the new digital economy is that the old business certainties do not always apply. For many innovation labs, the mere process of creativity can be just as important as the innovative technologies which the labs have been set up to produce.
Ben Davis, the editor with UK digital marketing strategy company Econsultancy, recently stated: “While the goal of any innovation lab is ultimately to create new revenue streams or bolster existing ones by improving productivity or speed, there is much more to consider. A new culture of working may be beneficial for productivity, but in its own right can make for a happier workforce.”
And a happy workforce typically means young, energetic, enterprising, skilled people wanting to work there.
For airport CEOs focused on the day-to-day challenges of having to find new ways of shifting more passengers and aircraft through existing infrastructure, these business concepts can look like an expensive, time-consuming long shot. But, over the last few years, airport innovation labs have started to spring up around the world.
Indeed, today they can be found at Singapore Changi, Paris CDG and Hartsfield-Jackson Atlanta and many mid-size airports such as San Diego have entered the fray.
Different types of labs have been developed, just as the different aviation players have developed their own innovation brands.
Some airports keep their labs in-house, while other airports are collaborative, often partnering with universities and governments. But the core objective is typically to improve airport performance across five key areas – airport operations, passenger processes, travel booking/destination management, environmental impact and revenue generation.
One of the important end goals of all this activity is to deliver an entirely seamless travel experience for the passenger from booking the flight to stepping onto the aircraft.
The airport segment of this new world order will involve using innovative types of wearable, connected technologies which help the passenger navigate the airport easily while providing the airport and its stakeholders with a wide range of data – from the passenger’s location and probable future path through the terminal, to his or her retail preferences.
There is increasing evidence to show that well-organised, results-oriented innovation labs have an important part to play in this process.
SAS Lab is working on an electronic bag tag (EBT), which comprises a small, low-power flexible electronic device with new screen technology permanently attached to the passenger’s bag. The device connects to a smartphone so that travellers can update it with journey details for each trip they take.
The tag would then display a bar code image and the itinerary for the trip. At the airport, travellers with the EBT would then just drop off their luggage at the baggage counter.
This is the kind of technology which has the power to transform airport operations worldwide. But it is only one of a wide number of new technologies the airport labs are working on. Indeed, automated apron and terminal vehicles; the use of big data to track and predict passenger flows; beacons; new type of apps; and new generations of digital retail offerings are all being incubated and accelerated somewhere around the world.
Not all these inventions will go from proof-of-concept to actual implementation. The value-creation mechanisms between the incubators and the start-ups are often opaque and will depend on whether the lab has been set up to focus on in-house technology challenges or to be marketed globally, or whether the airport is merely a host and facilitator for technology acceleration in areas which stretch far beyond the aviation sector.
From the start, the airport has to understand exactly what it wants from its technology lab, what kind of people it wants to recruit and what kind of path to market it wants to design if the lab produces real results.
This will require research – into the legal issues, new business models and the different types of innovation labs that are doing good work.
For all airports considering setting up an in-house innovation lab, there is a considerable cultural divide to be bridged.
These labs come from a place where risk-taking, OK-to-fail, entrepreneurship and radical innovation are core elements of success. This is very different from the risk-adverse, hierarchical and closely regulated world of airport management.
One way around this is for the airport to let a partner organisation manage the lab on its behalf. This is the strategy now being pursued by San Diego International Airport, which says the lab needs more attention than the airport itself can provide.
The danger is that with so many airport innovation labs starting up, their outputs will be an overly ambitious focus on all possible aspects of aviation and not integrated with the strategic vision or business plan of the host airport.
If there is a big technology challenge out there which will transform the way airports operate, then the chances are Google or Amazon are probably already working on it and they will be faster, smarter and more able to invest than the average airport, even an airport with an innovation lab.
For any airport CEO considering whether to create an innovation lab, several strategic questions need to be answered from the start of the operation to make sure the output is linked directly to the airport’s business strategy, rather than being a mere flight of fancy.
– What scope of solutions will the lab research?
Some labs cater to all areas of airport management, others focus on specific topics. How will this lab be different?
– Who is the end user?
Will the research focus on in-house technology challenges or produce products that can be marketed around the world?
– What is the business model for the lab?
Will the work involve closed or open innovation? Is the airport the service provider or the money maker? If it is an open model, based on partnerships, who will own what, and what level of confidentiality should apply?
Who will hold the patent to the successful product? In-house airport innovation labs can use the passengers that pass through the terminal as potential guinea-pigs. ATL Thinks! has been developed to strengthen links with local start-ups, offering technical challenges to the academic community. What projects would be better suited for crowdsourcing, and what others for hackathons?
– What kind of facility will the lab be?
Will it be a single office with pool table, water coolers, table tennis tables and the occasional laptop, or will it have a suite of connected devices to allow for full-scale simulations?
– What type of organisational structure will the lab employ?
How will it be integrated within the airport’s structure of operations – as a revenue generator or a cost centre? This might be important; other airport staff could see this start-up as either a threat or an opportunity.
What incentive should there be for people and/or companies to join the lab?
How can airports re-orientate their traditional business culture by providing the necessary incentives for success – the kind of risk-taking, challenging-orthodoxy, OK-to-fail thinking that provides the essential elements for innovation labs to succeed.