Written by Steven Hansen
It is interesting to ponder the economic affects of autonomous (self driving) vehicles. A recent study claims by 2030 “the average American family will save more than $5,600 per year in transportation costs, equivalent to a wage raise of 10%.”
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The study is fairly exhaustive listing many economic impacts – with well over half the impacts relating to job losses and oil sector demand reduction. Even many of the positive affects are double edged – such a productivity improvements which are good for business but not good for employment (all things being equal). One can argue about the speed this study believes autonomous vehicles will take over, or the quantitative levels of the impacts – but the study does appear to cover most of the potential issues. If one has not seen this – it is well worth a read.
The study requires one to read carefully as some benefits relate to electric vehicles over internal combustion, autonomous versus non-autonomous – and then throwing in transport as a service [TaaS] (transport-on-demand which would reduce the need to own a vehicle).
No matter how one looks at it, most of the affects of transport-as-a-service-autonomous vehicles will be positive – as long as one has a job. And I continue to worry about technology that takes jobs but does not create jobs.
This study offers no solution to its forecasted 5 million job losses except the usual “hope” that new jobs will be created. As an industrial engineer, I began seeing the affects of automation not creating enough new jobs beginning in the 1980s. Now throw in artificial intelligence – which by definition is a replacement for human intervention in the provision of goods and services. My favorite quote comes from a Forbes article:
This essentially is the problem with calls to put aside worry about automation. They sit on an assumption that, somehow, something will come along to save the day, even though no one has the slightest idea of what it might be. Call it the Magical Job Savior, the inexorable and unstoppable unforeseen something that increases the number of jobs even as technology eliminates them but somehow enables the rescue.
Do not get me wrong, I believe change is necessary and positive. But change itself is always disruptive, and the affects are magnified if it happens too fast. There will be a new economic equilibrium. But whenever a snake oil salesman tells you how much money you can save – you better read the label as the laws of equilibrium dictate there is an equal and opposing cost side also.
It is difficult to believe that employment decline can have an overall positive affect on the economy – unless there are measures implemented to fill in the employment vacuum created. And with the global economy where it is difficult for a single country to seal its borders from trade or other economic pressures, it is hard to envision any effective long term measure which could counter self-driving vehicles.
2030 is only a few days away.
Other Economic News this Week:
The Econintersect Economic Index for August 2017 appears to forecast static economic growth fundamentals – with the index showing normal growth for the fourth month in a row. Six-month employment growth forecacst indicates modest improvement in the rate of growth.
Bankrupties this Week from bankruptcydata.com: Tokyo, Japan-based Takata (f/k/a Takata Kojo – Chapter 15), Peekay Boutiques (f/k/a Dico and d/b/a Lovers and A Touch of Romance)
