The idea Organisation before Electronics before Concrete is a retort to infrastructure-happy politicians who build too much and like the ribbon cuttings that concrete provides, and which invisibly improved operations do not.
The idea loosely maps to the triad structure of railroads (discussed below) into the three parts of
Transportation (Services) = Organisation,
Equipment (Vehicles, but also Systems) = Electronics, and
Facilities (Track) = Concrete.
But what does it mean?
I asked ChatGPT4 what it meant, and after a few iterations on the interpretation of “Organisation”, it came up with the following (edited for clarity).
I understand your interpretation of "organization" now. I understand that "organization" refers to the optimization of transport operations, such as scheduling and service planning. Using this interpretation, the investment strategy "organization before electronics before concrete" can be applied as follows:
Organization: Focus on optimizing transport operations to make the best use of existing assets and infrastructure. This could involve:
Enhancing service planning and scheduling to maximize the efficiency of existing transportation networks and reduce the need for additional investments.
Implementing demand-responsive transit systems that adjust services based on real-time passenger demand, reducing inefficiencies and improving the user experience.
Streamlining intermodal connections to make it easier for passengers to transfer between different modes of transportation, improving overall system efficiency and effectiveness.
Evaluating and refining pricing and fare structures to ensure that they are equitable, encourage efficient use of the transport system, and support long-term financial sustainability.
By focusing on organization first, investors can maximize the returns from their existing assets, potentially reducing the need for additional investments in electronics or concrete.
Electronics: After optimizing the management and operations of existing transport assets, consider investing in technology and digital solutions to further enhance efficiency, safety, and sustainability. Some examples include:
Upgrading traffic management systems to reduce congestion and improve traffic flow.
Implementing real-time data collection and analytics to monitor and optimize transport operations.
Investing in smart ticketing systems to improve the customer experience and streamline fare collection.
Adopting energy-efficient and sustainable technologies, such as electric vehicles or renewable energy sources, to reduce the environmental impact of transport operations.
By investing in electronics, investors can further optimize the performance of their transport assets, potentially reducing the need for large-scale investments in new infrastructure.
Concrete: Only after addressing organizational and technological improvements, consider investing in new physical infrastructure or expanding existing assets. Prioritize investments that align with long-term goals, such as improving connectivity, promoting sustainability, and supporting economic growth. By focusing on organization and electronics first, investors may find that they can achieve their objectives with fewer or more targeted investments in concrete.
In summary, the "organization before electronics before concrete" investment strategy emphasizes optimizing the management and operations of existing transport assets before investing in new technology or infrastructure. By following this approach, investors can potentially minimize costs, maximize returns, and reduce the need for large-scale investments in physical infrastructure.
The examples in the bullet points are possibly not the best, but it’s a useful start.
Dysfunctions: TTE 6.7 Learning about Embedded Policies: The Org Chart
While it is how railroads are organised, it also leads to dysfunctions. As Bill Garrison and I (but mostly Bill in this section) wrote in The Transportation Experience
The discussions to this point have stressed how railroads began by borrowing policies from previous modes and, then, modified policies based on experiences. A similar statement may be made about government. Passenger and freight services were examined. Now, the discussion turns to how policies became embedded within the structure of the mode.
By the late 1800s, many small rail starts had been absorbed by larger systems, and strong large systems had emerged. Within-railroad embed- ded policies evolved to manage these large systems, namely: functional and departmentalized administrative structures for day-to-day routine operating decisions with precise accountability for expenses and use of human resources. The telegraph provided operational control – on an hourly basis for trains and on a daily basis for (1) expenditures, (2) work performed by men and machines, and (3) freight and passenger movements. These innovations are attributed to D.C. McCallum of the Erie Railroad beginning in 1854. They were widely publicized and served as a model for other railroads and for industry generally122.
J. Edgar Thomson of the Pennsylvania Railroad who, after adopting Mc- Callum’s scheme, divided the Pennsylvania into operating divisions in 1857 took the next step. Each division had a superintendent in charge of three functions: transportation, way, and equipment. The headquarters superin- tendent and the division superintendents were delegated operating authority over men and machinery. Headquarters was primarily involved with finance and planning and rules and procedures.
Other railroads in the US quickly adopted this organizational system. Adoption elsewhere seems to have been slower, mainly because systems were smaller. As noted in the above, transportation systems have a three component, triad structure.
Fixed facilities created and managed by civil engineers (through e.g., a public works department or the US Army Corps of Engineers).
Equipment designed and manufactured by mechanical engineers (through e.g., General Motors or North America Car).
Vehicles operated by pilots, train engineers, or drivers.
Mirroring that structure, railroads are organized as shown in Figure 6.6.
Figure 6.6: Illustrative Organization Chart of Railroads
The answer to the question of why railroads are organized that way requires little discussion: that was the division of talent and problems at the time. For the other modes, “modeled on railroads” is a good first approximation to the answer to the question of why they are organized the way they are.
But this structure yields considerable dysfunctions. The question is that of why modes have continued to be organized in triad structures in light of the dysfunctions. That’s especially a question for railroads. As corporate entities, they should be able to adopt restructuring policies more easily than the other modes.
We may term one dysfunction the inability to make markets. A conver- sation with a railroad person would be misleading. Most of them can tell all about the goods being hauled and why. Those that have to know have deep knowledge of the trading terms and transportation costs interrelations in the capturing of markets. They know that a cent here and there or a quality of service attribute here can change the terms of transport. But the level of freight movement knowing by railroad people has an important constraint on it. Railroad people do not have sharp knowledge of the cost to the railroad when making a market.
The reason is structural. Each division of the railroad claims a budget to carry forward its task, and each tries to minimize costs and/or maximize output from given inputs. At the level of a geographical division, for exam- ple, the transportation (operations) manager sees certain tons to be moved. Given the equipment and fixed facility situation, a good manager keeps the transportation inputs required to a minimum. Individual shipments move across divisions and impose costs on way, equipment, and operations. Ship- ments are handled jointly with other shipments in different combinations at different places and times. So it is very difficult to identify the cost of a particular shipment.
Railroad people know this very well, and they give a lot of attention to costing. Indeed, Wellington’s The Economics of Railroad Location, written in the late 1800s, centered on cost information and its use. Where special services are offered, such as unit trains on heavy haul routes, cost information may be pretty good. Some railroad marketing departments are organized by commodities and try to match costs and services as best they can.
Even so, there is a long-standing dysfunction locked in by structure. The situation is worse in other modes where the structure is not within mode-wide organizations. In air transportation, for example, we have authorities that operate airports, a Federal Aviation Administration that manages the airways, and airlines and private operators that move passengers. Individual firms such as trucking companies and ship builders know their costs and markets, of course. System costs are another matter. No one is in charge. In the economist’s pure atomistic world, if there were perfect competition that is of no great concern. But structural interdependencies in transportation are strong, spatial monopolies exist, and competition is far from ideal.
The second dysfunction is associated with patterns of dynamic decision-making. The operations group on the railroad measures costs on a car basis, so they press the equipment division to buy larger cars. That’s acceptable to equipment managers because it lowers their costs. But it has been found that large, heavy cars impose lots of costs on track structure. What has happened is that incremental decisions were made on the basis of component criteria, subject only to the conditions that it fit the system in a technical way. Examples of this kind of behavior proliferate throughout the modes. For instance, truckers buy high pressure, radial tires and ignore pavement damage questions. Sometimes this component sub-optimization begs remedial policy, as was the case when drivers started to use snow tires with metal studs. Often, policy is faulty because it fails to consider the system environment. In rail, there is policy about the condition of track and speed limits that pays no attention, as it should, to the type of equipment ordered.
One term for this pattern of behavior is disjoint incrementalism. Incrementalism allows exploration of options in cases where wants are unknown, enables reversible and low risk decisions, stabilizes organizations, permits compromise among goals and stakeholders, and has other desirable attributes.
Perhaps stasis from constrained behavior gives an additional flavor to the idea we strive to communicate. Actors in a component of a mode are constrained to do things that fit the structure of the mode, and actors’ goals, values, and priorities are constrained to their component.
As a consequence of the constrained behavior of components, systems have a highly constrained path of system development. The options that can be explored are very, very limited, for example. Actions may be costly because of impacts on others. We think the limitations on the exploration of options are the major cost of disjoint incrementalism. When is this failure costly? It is clearly costly when systems age. Inability to change is one reason they sail along in the sunshine of their obsolescence. It can be costly early on, because it can lock in dysfunctions. Policy bearing on Brunel’s wide gauge railways (See section 5.7) is an example.
One dysfunction following from the organization of systems, is the “envi- ronmental fallacy” Centralizing actions are taken under a false pretext of crisis and urgency without considering the environment and feedbacks from environmental adjustments. That thought could be used at the level of how components interrelate with each other and at larger scope. (This is distinct from the “ecological fallacy.” in which inferences about the individual are made from aggregates of which they are a part).
Origins
The first citation to the phrase: “Organisation before Electronics before Concrete” in English I have seen is in this 2011 white paper by PublicTransit.US
I asked the internet, which is to say Alon Levy at Pedestrian Observations, who first said “Organisation before Electronics before Concrete”. He replied
Yes. In that version, it's Munich-area NIMBYs who oppose the necessary second S-Bahn tunnel, and use a Swiss-sounding slogan when MVV has already maxed out the organization and electronics and really needs the concrete. The Swiss original is "electronics before concrete," developed as a way of maxing out the legacy rail network instead of building inappropriate-for-Switzerland's-size high-speed rail.
- note that the proposal is to divert S-Bahn trains from the tunnel, where the demand is, out of allergy to building tunnels (of which Zurich at the time was building and has since opened its second).
Alternatives Interpretations of “Organisation”
Initially ChatGPT4 interpreted Organisation as:
Organization: This is the first and most crucial step, which involves establishing a clear vision, goal, and structure for the project or system. It includes planning, defining roles and responsibilities, setting up communication channels, and outlining the necessary resources. Effective organization ensures that all stakeholders are on the same page and that the project proceeds smoothly.
I then asked it to explain the phrase as an “investment strategy”
Organization:
a. Goal Setting: Define the objectives of the investment, such as improving connectivity, reducing congestion, promoting sustainability, or enhancing economic growth.
b. Market Research: Understand the current and future demands of the transportation sector, including trends, challenges, and opportunities.
c. Due Diligence: Assess the viability of potential projects, taking into account factors like location, demographics, regulations, and economic conditions.
d. Risk Management: Identify and evaluate potential risks associated with the investment, such as regulatory changes, environmental concerns, or financial uncertainties, and develop strategies to mitigate these risks.
e. Stakeholder Engagement: Collaborate with relevant stakeholders, such as government agencies, local communities, and industry partners, to ensure that the investment aligns with broader interests and goals.
I tried to straighten it out: “I think "organization" here refers to getting the institutions that manage the investment correct. I think the point is that if you manage existing assets well, you may not need to spend the money on electronics or concrete. Similarly if you invest in better operations through electronics, you may not need to spend as much on concrete.”
Organization: Focus on improving the efficiency and effectiveness of existing transport infrastructure and assets by optimizing management and operations. This could involve:
a. Streamlining administrative processes and reducing bureaucratic inefficiencies.
b. Enhancing coordination and communication among different stakeholders, such as government agencies, transport operators, and regulatory bodies.
c. Implementing performance-based management and monitoring systems to track the performance of transport assets and identify areas for improvement.
d. Prioritizing maintenance and repair of existing infrastructure to extend its useful life and reduce the need for new investments.
I then suggested that: "organization" refers to the optimization of transport operations, such as scheduling and service planning, giving us the definition at the top.
