Big data and virtualization will dominate the coming “hyper smart” transportation era, according to a new report from ABI Research.

Traditional smart transportation approaches to address traffic congestion, safety, pollution and other urbanization challenges are expected to hit scalability and efficiency obstacles by the end of this decade, the report says.

Traveler information systems such as variable-message signs, intelligent traffic lights, camera-enforced urban tolling and traffic monitoring centers will ultimately prove ineffective and prohibitively expensive. ABI says global yearly spending on traffic management systems alone will exceed $10 billion by 2020.

“What will really be required is a step change towards virtualizing smart transportation solutions via in-vehicle technology, and cloud-based control systems whereby information is sent directly to and from the car, bypassing physical roadside infrastructure all together,” Dominique Bonte, vice president and practice director at ABI, said in a statement.

Virtualization will heavily rely on big data, with some car manufacturers already exploring generating hyper-local weather and/or traffic services from car probe data, to be shared with other nearby vehicles as well as government agencies and road operators.

However, a closed-loop systems approach will ultimately become key, ABI says. This will enable artificial intelligence-powered self-steering and learning demand-response solutions that can influence traffic levels through dynamic speed limits and variable road use and toll charges.

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