Opportunities for innovation in public transport: Effects of regulatory reforms on innovative capabilities

It is believed that regulatory reforms of public transport could bring about a better quality of service. The expectations are that the regulatory reforms would lead to more innovation in the industry. This article focuses on the role of innovation in the public transport market, and how it is developed. The paper examines different effects of regulatory regimes with respect to innovative capabilities of the public transport services, both in the public and private sectors. Innovative capabilities include the implication of both technological and organisational innovations. Innovation is classified into three areas, namely: technical innovation, competence development and service innovation. In accordance with this classification, this study analyses the relationship between regulation and innovation along with the connection between public authority and private operator. This paper elaborates the theoretical framework derived from the innovation perspective and compares the innovative capabilities that occurred in both the Netherlands and Great Britain.