Global GIS Markets
By J. Hugh O'Donnel, Managing Director,
Geomatics, SHL Systemhouse, VISION* Solutions,
Ottawa, Canada.
| Abstract Of The Paper & The Profile of The Speaker | Speaker Index | Paper Title Index |
Introduction
It is unquestionably an honour for me to have been invited to participate in the Second International Geographic Information Systems (GIS)/Global Positioning Systems (GPS) Conference here in Qatar. I also wish to compliment you on the outstanding work that is being carried out in this field here in Qatar. This is a showplace for global markets.
Before embarking on addressing global markets, let me first define the extent of the industry, covered under the term Geomatics, that is being exported.
Geomatics is the science and technologies involved in the management of geographically referenced information, including its acquisition, storage, analysis and dissemination. It is also an umbrella term that includes the disciplines of surveying, mapping, cartography, remote sensing and geographic information systems. Geomatics is also part of the information technologies.
The advances in mass communications and data storage are expunging technical bounds and continually redefining geomatics markets and products. Growth prospects especially for GIS/GPS components of geomatics are high. Most of my presentation will now relate to our own Canadian experience in Canada and abroad.
External Influences
In order to pursue global markets in geomatics, we must understand and account for the influences that are driving the paradigm shift in public sector organizations worldwide as we move to a new century. They have traditionally and will continue, under different organizational structures, to be major clients and potential partners in the provision of geomatic products and services. The influences are many and complex, and we will deal with those we believe are the most critical for all of us. They are the following:
The World Economy
Globalization
Changing Client Needs
Environmental Issues
Technology
The World Economy
National debts are a priority of governments today, and will be for the rest of this decade. Reduction in government spending, coupled with measures to increase revenues, is and will continue to impact directly on national mapping agencies.
In Canada, we have completed Program Review, the most comprehensive review of federal government activities ever undertaken in our country. This culminated in the 1995 Budget, which demonstrates Canada's commitment to deficit reduction, economic growth, and responsive and efficient government. Departments are seeking new ways to deliver programs and services at lower cost to Canadians. Program Review has been the catalyst for this renewal.
The Budget announced significant reductions in funding to the various departments and agencies. For example, Natural Resources Canada (NRCan) will go from a $1.1 billion budget in 1994-95 to approximately $435 million in 1997-98. Geomatics Canada, a sector of NRCan, will, over the next 3 years, see a budget reduction of $23.7 million. This represents a 31% reduction from the 1994-95 budget. It will also mean that the total staff complement will fall to around 580 persons.
Nevertheless, the world is moving toward an economy in which information is of primary importance. As the holders of the fundamental geographic information for our respective nations, we can shape our own destiny and thrive in the emerging information society.
Globalization
The economic situation is driving a globalization process, one that goes beyond regional economic arrangements. It has created a climate of interdependence between nations, one that impacts on both the public and the private sectors. Indeed, the global economy is setting the stage for our national and local economies and sets the rules under which economies, public and private, must operate.
Globalization of the market place is well underway. Nations are moving from independent states dependent on trade within a small group of nations to interdependent states buying and selling in a global trading system. A new European Community has emerged. Poland, Hungary and Czechoslovakia have established a Free Trade Zone. The Asia-Pacific region is moving towards increased economic integration. The Concorda Agreement sets the stage for free trade between Brazil, Argentina and Uruguay and is seen as the precursor to a Pan American Economic Community. Mexico, the United States and Canada are partners in the North American Free Trade Agreement. The development of a trade agreement for all of the Americas seems inevitable, as is a single interdependent European alliance. Peter Ellyard suggested: "Énations are undergoing the next transition, from that of independence to interdependence. This interdependent status will become the preferred status of countries in the 21st century, and the building block of a planetary society." (Ellyard, 1994)
One does not need to be clairvoyant to see that a planetary society and culture will evolve in the next century. Again, it is Ellyard who foresees "a century of the planet is at hand" and "Éa new planetary culture is being molded by an unstoppable combination of political, economic, technological and ecological forces". (Ellyard, 1994)
Changing Client Needs
National mapping agencies have long enjoyed a position of power and authority. Spatial data, in analogue, and later in digital form, has been our realm, our specialty. Our clients were well-served when we provided paper maps to describe the geo-science and topology of the land. However, that position is coming to an end.
We are already witnessing a revolution from our clients. They are demanding a higher quality and wider range of products. They are no longer content to put up with what is available. Clients are also looking for governments to provide "one-stop shopping" for the various national spatial data produced by separate government departments.
The current emphasis in our respective national agencies is on user surveys &endash; identifying not just who our clients are, but also what are their requirements. Not only must we be client-focused, but we must also provide dynamic products that are adaptable to clients changing needs.
We have thrived on technology. Until the 1980's we were the collectors of topographic data. That was probably due to the fact that only national mapping agencies could afford the equipment and infrastructure required to map on a national scale. As the technology improved and became more accessible, private sector capabilities emerged and many of us shifted from data gatherers to data managers. As the 1990's play out, the performance and simplicity of computer hardware and software, coupled with dramatically decreasing prices and increasing accessibility, means that our clients will need only access to data to produce the customized products they want. Indeed, it is suggested that technology is developing so rapidly that by the end of the century our clients will look to national mapping agencies only as a source of digital topographic information. And, if we cannot supply that information quickly enough, or with the desired quality or relevance, those clients will seek other suppliers.
Our agencies have existed for hundreds of years. Yet, within a span of 20 years, we are witnessing more than a mere paradigm shift with respect to our clients. We have seen the emphasis go from providing products to providing data, and now from data to information. A significant aspect of the preferred future is becoming a knowledge-based organization. That means understanding how to convert our geographic information into knowledge that has immediate value to our clients. As Jakobsen points out, customers are our long term guarantee for survival. (Jakobsen, 1995)
The challenge for the private sector is also becoming clear: more and more, their success will depend on their ability to competitively provide high quality products and services. The adoption of internationally recognized quality standards, ISO 9000, is becoming a de facto condition for doing business in Europe and elsewhere around the world.
Organizational Changes
The economic trends coupled with the reduction in federal budgets infers that the role of government in spatial data production and management is changing. Some suggest that national mapping agency roles will be reduced to coordinators of government activities and national standards, with the production of spatial data taken over by the private sector and non-government organizations. Privatization is a popular policy, as governments seek ways to reduce the size and cost of the public service.
The global trend is towards entrepreneurial government. The challenge is to more effectively use public finances and to subject government operations to the laws of the marketplace. The response is taking the form of:
Reductions in the size of the Public Service;
Commercializing of certain government activities;
Restructuring of the government machinery; and
A redefinition of the process for developing public policy and the role of the various players involved in this process.
National mapping agencies will have to be entrepreneurial to survive. The Executive Agencies of the UK. The Operating Agencies of Canada and the State Owned Enterprises of New Zealand are preferred models for program delivery mechanisms.
The Environment
The accumulative damage that has and continues to be inflicted on the planet is a current preoccupation. The planetary society emerging in the 21st century will be even more conscious of undoing that damage and minimizing further adverse effects. Sustainable development of natural resources is one of today's priorities of the Government of Canada. It will be a priority of the planet for the foreseeable future.
While cleaning up our environment is a considerable task, the planet has made a good start. The 1992 Rio Earth Summit was the largest international meeting in history. Representatives of almost all nations worked together to develop the Rio Declaration, conventions on Climate Change and Biodiversity, and the Agenda 21 action plan.
A new planetary environmental order is being realized, and national geomatics mapping agencies can have a prominent role in that order. As Dr. Htum has indicated, the spatial information needed to fully support sustainable development is lacking in most parts of the world. (Htum, 1995)
Collectively, we have the spatial data that decision-makers need. We represent the most effective means to continuously monitor the state of the environment. We must be a part of the implementation of Agenda 21. This action plan represents tangible evidence of all nations concerns about the future of the planet. Those concerns are further fueled by the estimates that the world's population will double to 10 billion by 2030, that 20 million hectares of rain forest disappear each year, that 1.3 billion people lack sanitary drinking water or facilities, that 1.5 billion lack sufficient fuel for heating and cooking, and that less than 25% of the world population lives in the industrialized nations, yet they consume 75% of the world energy and 85% of wood products. (Byrne, 1994)
Agenda 21 encourages nations to develop internally acceptable methodologies for data bases of land uses and to develop and maintain data bases for management of coastal areas.
Technology
Geomatics mapping organizations will, as always, be technology dependent. Our agencies have a rich history of successfully exploiting emerging technology to deliver our programs.
The major technological trend for geomatics will involve linking the multitude of existing spatial data bases, as we move towards integrated, total solutions to geomatics markets.
Information will be our primary commodity and the growth potential will be in developing value-added applications and uses of that information.
Technological innovations will also affect the structure of our organizations and the conduct of our work, as well as the management of our organizations.
The following are but a representative sample of the changing technologies that are driving the geomatics future.
Custom maps will be made using public domain software running on desk-top computers linked to Internet. Low volume maps will be printed on demand, at user-specified scales and boundaries.
Small scale map coverage can now be provided by automatically processed imagery from satellite remote sensing systems. Technology is already under development for fully automatic topographic mapping at medium scales. Remote sensing technology will inevitably provide the data for compilation and revision of maps at all scales.
Aerial photography will remain a viable data source for photogrammetric mapping at certain scales. However, it is clear that easy access to high-accuracy, high resolution satellite imagery will change the way that public and private mapping agencies as well as end users will view the task of mapping. Satellite sensor systems for mapping from space are currently under rapid development. Higher resolution sensors with stereo capability, as well as increased spectral possibilities are either becoming available now, or are in the development or planning stages by various nations. Radar imaging and radar interferometry are emerging as significant new tools. Last year Canada launched RADARSAT, the world's first fully-operational satellite dedicated to radar applications.
The remote sensing application market, which includes mapping from space, is expected to grow to US$ 5 billion by the end of this century. (Thurgood, 1995)
Geographic Information Systems and related applications will also continue to enjoy substantial growth. It is suggested that funds spent on GIS are growing at an estimated 30% per year (Trinder and Fraser, 1994). While the cost of GIS workstations and software is dropping significantly, the high cost of getting data into the spatial data bases will continue to impede the growth of GIS. This impediment is the cause of the large gap between the potential of GIS and actual use.
Differential GPS services are being established and will grow in importance and extent. GPS will be inextricably entwined with GIS in the future, providing the positioning element of real time spatial data acquisition. And, GPS will move on from a military-based to a global, civilian-controlled satellite positioning system.
Interoperability is a cornerstone of tomorrow's GIS. This will define the pathways for linking disparate and isolated spatial information systems. It will also imply the existence of common user interfaces that support the integration of consistent, reliable data sets. (Hecht, 1995)
Vertical Market Priorities (Kennedy, 1996)
The majority of international funding institutes and public/semi-public organizations are the principal clients of the following market segments which account for the $10 billion global annual market with a growth rate of 15 to 20% per year.
Municipal and Utility Systems
Geomatics Infrastructure for Natural Resources Management
Environmental Information Systems
Land Titling/Land Registry Systems
Municipal and Utility Systems
As national governments in many developing countries implement decentralization and privatization programs, with IFI funding support, the demand for geomatics , as an enabling technology to support this transfer of responsibility and power, is growing steadily. State-owned utilities are being transferred into private sector hands, providing both the opportunity and the demand for cost- and labour-saving procedures and technologies to help deal with new market forces. Similarly, municipalities are receiving more powers to manage their affairs, such as planning and construction of transportation and utility services, land use planning and property assessment and tax collection. In both cases, geomatics is gaining recognition as an approach which can assist managers and planners to cope with these new responsibilities and challenges.
Geomatics Infrastructure for Natural Resources Management
Government geomatics agencies in Canada have developed program structures and production methods (based largely on contracting-out) which are the envy of similar organizations in developing countries around the world. Canada's combined public/private sector expertise in designing and executing very large geomatics programs, producing very high quality digital geographic data, implementing data sharing arrangements, developing GIS applications and training professional and technical personnel, combined with world-class Canadian technology, represents a marketable service for which there is a tremendous latent demand in the developing world. The Mexico INEGI project, where a combination of Canadian Federal Government/Industry expertise modernized the national mapping facility of Mexico, is a prime example.
Environmental Information Systems
The world's accelerating environmental degradation problems are well known, as are the global measures being undertaken to deal with this threat (e.g., the Brundtland Commission, the UNCED Conference, the Global Environment Facility, etc.). "Sustainable development" has become commonplace in the vocabulary of the IFIs and the bilateral aid agencies, as well as governments at all levels. The solutions to these enormous environmental challenges require a solid foundation of information, and environmental information systems require geomatics. In both landbased and marine domains, environmental monitoring and protection regimes are being implemented with strong IFI support.
Land Titling/Land Registry Systems
Reform measures underway in the former Communist countries of Central and Eastern Europe, across Central and South America, and in South and Southeast Asia, have raised the demand for practical, effective property registration systems to an unprecedented level of prominence. The International Financial Institutions (particularly the World Bank and the Inter-American Development Bank) have recognized the key role which property formalization plays in sustainable economic development. Investments in property systems totaling hundreds of millions are planned by the IFIs during the next decade.
The Global Market (Smith Gunther Associates 1996)
As previously mentioned the world market for geomatics products and services is estimated to be worth $10 billion with a growth rate of 20% annually.
Currently major markets are in North America and Western Europe. New markets are emerging in Latin America, Eastern Europe, the Middle East and Asia Pacific. One of the largest markets evolving is in South Korea. Its GIS expenditures were in excess of C$60 million in 1994 and it is expected to reach C$180 million by the year 2000.
The United States leads in technology development and international billings followed by Canada. Exports from the Canadian Geomatics Industry are estimated at $260 million per year. Other major players include Germany the United Kingdom and certain developed countries of Asia Pacific. Future competition will come from China, South Korea, India, Hungary, Russia and Poland.
The Canadian Contribution
Canada supplies the global community with 10 to 15 percent of its demand for remote sensing products and services, half of its requirements for all electronics associated with satellite data ground-receiving stations and 25 percent of all image processing systems. International customers for Canadian solutions and services include agencies of the United States Government, the international resources development industry, public and private utilities, forestry organizations, and national, provincial, state, regional and municipal governments.
In the domain of hydrography and coastal mapping, Canada is the international leader in the application of the Electronic Chart System (ECS) which is digitally mapping ocean floors. The ECS (co-sponsored by other northern nations) integrates continually updated hydrographic chart data with real-time positioning information, radar, gyro-compass and other sensors as a way of avoiding collisions at sea and ship groundings.
In the world of GIS, Canada is world-renowned for its expertise in the development and use of applications for natural resources development, municipal planning, agriculture, agriculture and business geographics. For example, advanced systems for fire-fighters originally developed recently for Montreal have been marketed worldwide and these not only minimize the time needed to reach the fire, but also give fire-fighters invaluable information about the burning and surrounding buildings. This information covers storage sites for flammable materials, complete wiring diagrams and locations for gas shutoff valves.
Other firms create and supply digital mapping and data bases combining geographic and engineering records for utilities to optimally design, construct and manage their physical plant and equipment. Eight of Qatar's fourteen ministries use a digital ortho-imaging information system developed by the former Intera Information Technologies Corporation, now renamed Intermap.
Canada's MacDonald Dettwiler & Associates, Ltd. (MDA) has supplied over half the world's ground stations for satellite reception of remote sensing data and Spar Aerospace is a world leader in the supply of digital systems for satellites. Both of these firms played leading roles in the RADARSAT program. Lastly my own company SHL Systemhouse VISION* Solutions has provided over 100 government agencies, telecommunications companies and utilities throughout the world with VISION* software for their infrastructure management.
Education and Training
A high level of skilled employees provides a strong competitive advantage to the geomatics industry. Firms now seek recruits with post-graduate specialization. The types of professionals and technicians required are as diverse as the industry itself. Software specialists with a geomatics background are in demand.
In spite of these technological strengths, there continually needs to be a greater emphasis on developing management and marketing skills, education and training has to be more multi-disciplinary and application oriented and universities and colleges need be more responsive to the specific requirements of the industry. In these leading edge technologies, colleagues play important roles in challenging each other to stay at the frontier of their discipline. Most new software programs have sufficient tutorials to facilitate learning on the job or at home.
Human Resources
A recent survey in Canada defined the human resource requirements for geomatics establishments. These requirements were highly oriented to professional and technical personnel. The break out is as follows: 39.3 per cent of employees were professionals and 42.7 per cent technical. Clerical employees accounted for 14.5 per cent, with "other" comprising the rest.
Canada is considered to have a strong, vibrant and well-educated work force. Canadian graduates are in demand internationally. Canadian leadership in software education has been recognized and assisted by Microsoft's support for the University of Waterloo from which it has more employees than any other university in the world. When hired here, this well educated and competent work force provides a competitive advantage to Canada.
Research and Development
Evidence on research and development (R&D) by geomatics' firms per se is scarce. Information from those publicly available annual reports showing R&D suggest that on average about 10 per cent of revenues are devoted to R&D, although a few companies are reporting R&D as a per cent of revenues to be as high as 50 per cent and figures in the 20 to 30 per cent range are not unusual. R&D expenditures are focused on new applications, software and related products, improvement to reach and take advantage of quality improvements inherent in communications standards, and advanced development of hardware.
The high degree of R&D expenditures required to stay competitive in the geomatics industry means that technological and investment risk is high. Low profits experienced in the early 1990s (up to 1995) by most firms may not justify the high expenditures on machinery and equipment in the short term, although the opportunities and financial gains for the eventual winners in this global competition may prove to be substantial. A tendency for firms to over extend themselves has lead to mergers and acquisitions during the recession.
Conclusion
As nations' geomatics industries continue to globalize and as the pace of technological evolution becomes more rapid, the successful strategy for geomatics firms will depend more and more on their ability to develop the institutional skills required to create, adapt and apply new technologies in order to enhance their international competitiveness.
The following four broad imperatives are key to building the skills that companies will need to succeed in global markets.
Be competitive, don't defend: To compete successfully in the future, firms must proactively innovate and adapt technology rather than defend the status quo.
Invest in knowledge and skills: To develop the capacity to compete, companies must build knowledge and skills through each stage of technological evolution.
Broaden horizons: Companies must build global and technological alliances to be competitive in the world arena.
Instill a spirit of change: Companies must develop strong senior management leadership to surmount barriers to innovative behaviour and to ensure innovation and technological change become a way of corporate life.
References:
Byrne, Peter, "The Surveyor, The Environment and Agenda 21", The Australian Surveyor, December 1994, pp 297-301.
Ellyard, Peter, "The Emerging Planetary Paradigm: Professionalism for an Interdependent Planetary 21st Century", keynote address, International Federation of Surveyors International Conference, Melbourne, Australia, March 7, 1994.
Hecht, Louis G., "Technology Development, Policy, and GIS Interoperability - The Process of Change", GIS World, May, 1995, pp 32-34.
Htum, Dr. Nay, "The Need for Basic Map Information in Support of Environmental assessment and Sustainable Development Strategies", in collected papers of the Cambridge Conference for National Mapping Organizations, July, 1995.
Jakobsen, Peter, "An Experience in the Pursuit of Stability and Long Term security through Change", in collected papers of the Cambridge Conference for National Mapping Organizations, July, 1995.
Kennedy, Ed," Framework Document for the Creation of GeoCan International", November, 1996. Geomatics Industry Association of Canada
O'Donnell, J. Hugh and Cyril Penton, "National Mapping Agencies: Looking to the 21st Century", Cambridge Conference for National Mapping Organizations, July, 1995.
Smith Gunther Associates Limited, Canadian Geomatics: "Benchmarking Directions For Growth, Industry Sector Outlook", Prepared for Industry Canada March, 1996.
Thurgood, Joe, "GIM Interviews Dr. Joe Thurgood, Director of Product Marketing, Space Imaging, Inc.", Geodetical Information Magazine, June, 1995, pp55-59.
Trinder, John C. and Clive S. Fraser, "The Case for a Change of Name of a Discipline in the Academic Context", The Australian Surveyor, June 1994, pp 87-91.]
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