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1-Managing Technology disruption in Business, Society and Politics: The case of Driverless cars

Updated: May 19, 2021

The microwave when was invented was a big commercial failure because, like other failures, they had the technology, but they didn’t understand the market. Only a half Century later every family had it in their homes. The lesson is that socio-economic resources (Capital and Labour) a social ethos receptive to new ideas are both required for its success. When this happens a creative disruption wave emerges enabling an era of technological progress and economic growth. This happened during the second wave of industrial revolution when the speed of technological change was much lower than today.


The history of Technology innovation is as old as mankind. Fundamental technologies have been invented ; the Fire, the Language, the Wheel, Metal tools, the Printing press ect


The 18th century is marked by the First Industrial Revolution, and was caused by an important technological discovery: the invention of the steam engine, which drove manufacturing and the development of rail transport, and accelerated the pace of economic growth.


The Second Industrial Revolution was driven by a surge in the demand for steel and is associated with electrification. Electricity enabled widespread technological innovation and productivity gains. improved living standards, the rise of the working skilled class, the growing importance of banks, and the opening of stock exchanges ect. The other fundamental tech. revolution was that of oil that brought the automobile, and mass production.


The Third Industrial Revolution, also known as the age of information and telecommunications, began in the 1970s onwards. It is characterized by a surge of technological advances. Technologies like cheap microelectronics, computers and software, and new communication infrastructure, specifically the internet helped to transform our daily lives



The 4th Industrial Revolution: perspectives and challenges


The Fourth Industrial Revolution is characterized by hyper-automation and hyper-connectivity. It is driven by advances in robotics, AI, and internet-related innovations such as big data, the Internet of Things (IoT) , cryptocurrency, and blockchain. Its characteristic is the speed of disruption. It takes very few years to change the market actors, habits and regulations.


When analyzing these new technologies we always need to remember ourselves that their long impact on Society (success or failure) depend on :


-The technical feasibility of the innovation;

-The cost to implement new technologies, such as the cost of hardware and software;

-The supply and demand dynamics related to the relative scarcity, skills, and cost of human workers;

-The benefits such as improvements in productivity, quality, and safety

-Considerations related to regulation and social acceptance.



The main challenges associated with the 4th wave of technological innovation are instead related to :


1)the disruption of established business models and modes of communication

2) the emerging ethical debates around data privacy and national security

3)The implications of these changes on unemployment, the rise of misinformation and hate speech, the distortion of public debate, interference in democratic processes, and the potential to erode privacy and enable discrimination


The potential economic, social and political impact of driveless cars


A basket case of potential socio-economic disruptions around the corner is the driverless car market. It could have pervasive effects on Society and business environment although it is only a promise at the moment. An abrupt adoption of “fully automated” driverless car would cause in the near-term massive job losses and a sudden change in the competitive automotive landscape promoting the few winners with an entirely different business model while old actors go out of the market. This could trigger a future Digital divide if supply - demand forces were not balanced.


The Social implications are probably even more relevant. The change from status to safety in the use of cars could start an era of “transportation as a service”, and the end of car ownership. However, without new cities’ infrastructure (roadways) this could cause chaos and decreased urbanization.


History tells us that when a technology becomes superior, economically competitive and gain public acceptance it replaces the previous one. Society welcomes business transformation when it is incremental. When instead the speed of disruption is radical the economic costs risk outplacing its benefits. Market competition and established value chains risk bringing entire businesses out of market very quickly with huge implication for job losses.


Business challenges

Man’s productivity (time dedicated to driving will disappear) and decreased lethal accident (less Gov. spending due to better citizens’ Health) are important economic benefits but an economic barrier is the new infrastructure required to facilitate this. Large required investments could reduce competition and create a competitive landscape dominated only by few Companies. Further, a supply driven market, like today, is a big barrier for its affordability. Only rich people can buy them with possible “Digital divide” consequences around the corner. A market driven by price, and few actors will create only a niche market with reduced economies of scale.


Society challenges

The main social benefit for the full Adoption and acceptance is an increased Safety, specifically in reduction of numbers of deaths due to human error. It is estimated that in US the human choices (errors) are linked to 94% of serious crashes(2016). However, people find difficult to put their safety in the hands of an autonomous machine for fear of technical or systems failures and malfunctions. Negative perception about autonomous vehicles driving safety (some accidents in the last few years) is really the big barrier to the consumers’ adoption. The risk of your life being in the hands of technology seems to outweigh all benefits that it promises. An hypothetical future adoption could also end car ownership and begin an era of “transportation as a service” .Road infrastructure and the physical shape of cities (decreased urbanization) could change forever as the incentive to have one of these cars (Gartner, 2021)


Political challenges

Policy makers and Government’s role is crucial because they have the responsibility to set standards. The main drawback are the current lack of laws and regulations to dictate common grounds of acceptable levels of safety performance. Who will be liable/accountable in case of an accident? How personal data should be used and shared (data Privacy)? Further, policy makers will have to set international rules for testing and granting licenses to these vehicles on public roads. One particular aspect to consider in the future is how safety standards can keep up with rapidly evolving algorithms deployed by self-driving cars.



Conclusions


The debate around technological innovation is often polarized: some view technology as a solution for all of society’s problems (a utopian view) and others see technology as something that will destroy the foundation of a free society (a dystopian view). Within the dystopian camp some see this destruction be Technological ( Societal control is maintained through computers, robots, or scientific), others Corporate (Society is controlled by one or more large corporations by way of products, advertising, or the media), Bureaucratic (People are restricted through unnecessary and relentless regulation) or Ideological or religious( A particular view is enforced across society)

A closer analysis of the history of technological innovation and disruption leads to a more balanced, and often neutral, view of technology. Technological change can bring about positive and negative consequences, but this often depends on how effectively it is managed and how it serves human well-being and prosperity.Will it help to Democratize Society or Social inequalities will augment? Will Automation help Humans or replace them instead? Will Humans be de-humanized in the process?


Driverless cars, if used on a large scale and at fully technological capacity promise to dramatically transform the way we live. The timing of its full adoption is however uncertain due to legal, social, ethical and economic challenges. The proper management of the expectations at different levels (Business, Civil Society and Government) are fundamental for development implementation with long term benefit.



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