Future market restructuring needs to be taken seriously

  • #26
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The acceptance of the concept, the changes necessary within the company, feasibility outlooks, infrastructure changes, ....
Something such as driverless trucks won't happen in a day, but like most things the penetration takes time.
It won't happen within a day, but it will happen within a few years. Significantly shorter than a typical working life. The approach "we don't hire new drivers and the old drivers will retire eventually" won't work.

Sure, you keep the loading/unloading business, but how much time does that need compared to driving?
I don't share your optimism for the prospects of driverless cars/trucks because I don't think it will be that easy/cheap to retrofit existing vehicles and if it is easy and cheap, then it's too cheap and companies will simplly charge more money for it due to supply and demand.
Unless you suggest the industry will do price rigging, I don't see why it would be expensive. The hardware costs a few hundred dollars, add generously a few thousands for the installation and the software. A vehicle that can drive 24/7 (apart from loading/unloading) can probably replace at least 3 drivers. Even if self-driving would cost $100,000, it would be a great return of investment.

Driverless trucks and taxis are just one example, many more will come at the same time.
Precise numbers? Predictions are hard, especially about the future. But it looks like it will happen more rapidly than in the past. And it will happen more complete - with most low-skill jobs being replaced.
 
  • #27
russ_watters
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Unless you suggest the industry will do price rigging, I don't see why it would be expensive. The hardware costs a few hundred dollars, add generously a few thousands for the installation and the software. A vehicle that can drive 24/7 (apart from loading/unloading) can probably replace at least 3 drivers. Even if self-driving would cost $100,000, it would be a great return of investment.
No, I mean supply and demand. The need to retrofit 3 million trucks is a large demand, requiring a large industry that doesn't exist yet to make it happen. Large demand plus small supply equals high price.

The history of technological adoption shows it always works the same way (DVD, solar panels, electric cars, pcs, whatever): someone invents something new and great and starts selling it. It doesn't matter how cheap it is to make, they are the only game in town, have limited capacity, and have to recoup their borrowed R&D cost to avoid bankruptcy. So they sell it expensive. Meanwhile, there is no support infrastructure, so there is limited benefit to the new technology, high adoption cost beyond the product itself and high risk. So people are slow to adopt it. Gradually these things work themselves out and the price goes down while the adoption rate goes up. But it takes 5 years at least, just for the ramp-up to relevancy. Then another 5 at least for a meaningful adoption rate.

The "meaningful adoption rate" is getting faster, but the "ramp up to relevancy" is not likely to keep getting faster:

consumptionspreads.gif


https://hbr.org/2013/11/the-pace-of-technology-adoption-is-speeding-up

If, for example, they follow the tablet rate, it would take 5 years to reach 10% and another 5 to reach 40%.
 
  • #28
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All your examples are hardware-based, where you have to manufacture something new to sell it to millions of new customers. The internet infrastructure had to be built up as well. And you still see some acceleration trend in it. What self-driving cars need are mainly cameras and computers. The camera and computer industries exist already. And you have a smaller number of customers ordering a much larger volume. Car producers and taxi/truck companies.

Let's take examples that didn't need hardware (at least for the customers). Google as search engine went from "completely unknown" to the dominant search engine in just two years. The Internet explorer replaced Netscape within three years, and Chrome needed just three years from a completely irrelevant browser to the most used browser. Facebook needed three years from an unknown small website to the dominant social media platform. All these examples would appear as nearly vertical lines in your plot. And all these examples don't even have a strong monetary incentive for the customers.
 
  • #29
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The idea of McDonalds replacing its order-takers with iPads just doesn't scare me.
This doesnt scare me either, considering how low skill the order-takers are at my local McDonalds.
 
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  • #30
Orodruin
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Google as search engine ... Facebook ... And all these examples don't even have a strong monetary incentive for the customers.
The "customers" are the advertisement companies. I would say they have a pretty strong incentive. The users' private information is the product.
 
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  • #31
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All your examples are hardware-based, where you have to manufacture something new to sell it to millions of new customers. The internet infrastructure had to be built up as well. And you still see some acceleration trend in it. What self-driving cars need are mainly cameras and computers. The camera and computer industries exist already.
But not *in* the trucks! Backing up:

I think the article/graph I posted is highly applicable, though the author didn't delve into why the speed-up is happening with tech devices. It's happening for two related reasons:
1. These new devices are not really new. They are evolutionary steps and more importantly convergences of other products and technology. The iPad is just a big iPhone and the iPhone is a convergence of PDA technology developed in the early 1990s, with cell phones....and PDAs were stripped-down, hand held Mac computers.
2. Because they are convergences (plus service based with the phone), they are cheap.

That is what autonomous cars represent and you are correct that the hardware is relatively off-the-shelf, which will make it follow the trend of fast adoption of other such devices. But you're essentially pretending the hardware already exists in the users posession, just waiting for the software to be installed. And it just isn't true. Retrofits are going to be hand-installed, which makes them expensive and time consuming. It's much harder than, for example, upgrading from Windows 3.1 to Windows 95, and very few people did even that: they mostly phased-it in as they bought new computers and got rid of the old ones. But maybe now you are suggesting that?:
And you have a smaller number of customers ordering a much larger volume. Car producers and taxi/truck companies.
You mean you expect car/truck manufacturers implementing them in new vehicles to be the primary adoption "vehicle"? Not retrofits? I agree that's' likely (because retrofitting an old car with the mechanical devices needed to drive it is a big and custom task). But that makes the implementation timeline even longer because the *average* age of a commercial truck on the road today is 17 years! Yes, they can ramp up and replace faster, but then that just makes it even more expensive, losing the value of the truck you are discarding (which often has a longer term loan attached to it).
Let's take examples that didn't need hardware (at least for the customers). Google as search engine went from "completely unknown" to the dominant search engine in just two years. The Internet explorer replaced Netscape within three years, and Chrome needed just three years from a completely irrelevant browser to the most used browser. Facebook needed three years from an unknown small website to the dominant social media platform. All these examples would appear as nearly vertical lines in your plot. And all these examples don't even have a strong monetary incentive for the customers.
I agree with @Orodruin and I don't even know if Musk and Zuckerberg knew what they were really doing from a business standpoint when they created these things. A great many of the computer/internet pioneers abhor capitalism and business interests (which is a fascinating human study, but a different topic); They are virus spreaders and it is only recently that the business plan got attached to it and then named: It's viral marketing and market research. Due to the late date, Zuckerberg probably should have known, if he didn't. When he created facebook, he was a paid, freelance software developer. He'd created viral social fads before, and Google was already established, so I suspect he recognized the real business potential.

If facebook users were actually customers and facebook had cost its early users a lot of money (the penalty for early adoption), it would not have succeeded. It has a very low value to its users and its original "customers" would have been poor college students. Facebook, the website, is not a "product", it is a social fad and a platform for marketing and data collection, which are the real products.

The software for autonomous cars also isn't easy to make and so the development is already fabulously expensive, proprietary, and taking forever (albeit subsidized by other businesses). But there is a way around the difficult software problem: more extensive infrastructure until the software catches up. And that's already happening. The most successful self-driving vehicle company isn't Tesla, it's Amazon, with their forklift-driver-less warehouses. These are smaller, closed, controlled "tracks" for the vehicles. Next-up: shipyards. After that, cities. Then, closed routes for trucking. In that sense, we're already on a growth curve for driverless "trucks", but it is slow and evolutionary, as the technology develops and matures.

Regardless, we all see this coming (because it is already in progress), even if we disagree on how/how fast it will develop. Hopefully, truckers and kids deciding what careers to pursue see it coming and plan accordingly*. Did Blockbuster see Netflix coming? That's a truly new and unique - yet simple - business model that fell out of the sky, fully developed, and blew-up a mature industry in a very short time. Netflix went active in 1998 and Blockbuster went bankrupt - gone - in 2010. Driverless trucks are not Netflix. It's already happening in a pre-mature way, and happening much slower, which means it will be much less disruptive because we all see it coming and can plan for it.

*The great prognosticator Matt Groening, who predicted President Trump, produced Simpsons Episode 220: "Maximum Homerdrive", about driverless trucks, in 1999.
 
  • #32
Stephen Tashi
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A forseeable political clash involving autonomous vehicles will be city, state, and federal highway departments wanting to take control of autonomous vehicles in order to efficiently route traffic. Eventually cars and trucks will be required to provide such access.
 
  • #33
Nobody seems to have given much discussion to what should be done if low skill jobs see a dramatic downturn. Russ and others have said some things, but nothing fleshed out as to what to do with the unemployed in the worst case scenario. I'd be curious to hear what others think about a situation where people will need a welfare state to provide basic needs to tens of millions more people than before. Medicaid, food stamps, housing will all have to see a huge increase in funding if the worst happens. That seems to be the popular mentality, but I wonder if anyone here feels there's a different/better solution.
 
  • #34
Choppy
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Nobody seems to have given much discussion to what should be done if low skill jobs see a dramatic downturn. Russ and others have said some things, but nothing fleshed out as to what to do with the unemployed in the worst case scenario. I'd be curious to hear what others think about a situation where people will need a welfare state to provide basic needs to tens of millions more people than before. Medicaid, food stamps, housing will all have to see a huge increase in funding if the worst happens. That seems to be the popular mentality, but I wonder if anyone here feels there's a different/better solution.
In principle there is a very simple solution: tax new revenues generated by the automation of industry and use that to provide a guaranteed minimal income.

In practice, there will be a lot of very practical problems associated with such a highly complex task, starting with whether it should be attempted in the first place. There is a strong argument for doing nothing. People on their own are industrious - or at least they can be - and may not need this problem to be solved for them at all. Sure jobs will disappear in particular sectors, but jobs will open up in others.
 
  • #35
In principle there is a very simple solution: tax new revenues generated by the automation of industry and use that to provide a guaranteed minimal income.

In practice, there will be a lot of very practical problems associated with such a highly complex task, starting with whether it should be attempted in the first place. There is a strong argument for doing nothing. People on their own are industrious - or at least they can be - and may not need this problem to be solved for them at all. Sure jobs will disappear in particular sectors, but jobs will open up in others.
This is my opinion as well. I am very interested in people like Russ' views who oppose most things relating to welfare and how, if the situation truly arose as predicted, they would help (or not help) the people without jobs.
 
  • #36
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But you're essentially pretending the hardware already exists in the users posession, just waiting for the software to be installed. And it just isn't true.
It is not true for cars (Teslas as exception), but it is true for various other jobs.
Driverless trucks are not Netflix. It's already happening in a pre-mature way, and happening much slower, which means it will be much less disruptive because we all see it coming and can plan for it.
That is exactly the point. We see it coming today, and we should plan for it. If we only do it once the change is in full swing, it is too late.
 

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