KEY TAKEAWAYS
  • Traffic in New York City has slowed to a crawl as the roads are packed with more vehicles. While a range of tech fixes have been put in place, traffic still causes $100 billion in lost productivity each year.
  • Specialized high-tech companies such as Motorola Solutions have come up with powerful solutions. That firm’s recent $1 billion purchase of a Canadian will bring Artificial Intelligence (AI) insights to New York’s traffic woes, clearing up bottlenecks before they can spiral across town. Other cities in the U.S.—and around the globe—are lining up as potential new customers for this advanced tech as well.
  • Also keep an eye on the Vanguard Information Technology ETF, which owns a broad basket of leading edge tech firms that are deploying advanced hardware and software to help ease the burden on today’s cities.

It’s not your imagination: Today’s roads are getting annoyingly crowded. In New York City alone, traffic has soared 56% in just eight years. When you account for lost productivity, higher fuel costs, longer commute times and other headaches, the city is now taking a $100 billion annual hit.

That doesn’t sound very futuristic, does it? It’s not; it’s a legacy problem that leading tech firms hope to fix — and, along the way, garner lucrative contracts with big cities.

The first step: Recording traffic bottlenecks, which makes it easier to understand what’s clogging up streets and roads.

That’s why Motorola Solutions (MSI) moved to acquire Canada’s Avigilon for $1 billion this past March. Avigilon has developed a suite of advanced video surveillance and analytics, backed up by 750 key patents.

Avigilon’s technology has now been adapted to ease traffic congestion. Its cameras and computers can constantly monitor traffic and pedestrian flows on every city block and will flag a budding traffic blockage before it cascades into a back-up throughout Manhattan.

The opportunity here is that Motorola’s new platform will find strong global appeal. There are already 60 cities that are home to five million or more people, and a large population is a good predictor of traffic problems.

Of course, investors may not want to simply focus on just one tech firm if they’re thinking of ways to bet on surveillance technology. And that’s where the Vanguard Information Technology ETF (VGT) comes in.

While this fund brings exposure to more than 300 leading tech firms, know that 57% of the fund is focused on a core of 10 holdings in software firms such as Apple, Microsoft and Alphabet along with advanced AI chip firms like Nvidia and Intel. That makes it an interesting investment for anyone who, like Avigilon, wants to cover the entire road.

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