Will autonomous automobiles be a disruptive technology? To begin to answer that question, professor Clayton Christensen at Harvard has defined two main characteristics that aim to identify a potential disruptor (as cited by Gallaugher, 2018). First, customers find little value in the new technology when it’s initially brought to market. In 2016, a study was conducted using twitter to determine opinions of the technology. Some factors considered were usefulness, ease of use, intent to use, and risk. While the study encompassed many factors and a thorough analysis, the results indicated a 42% benefit ratio of tweets (Kohl, Knigge, Baader, Böhm & Krcmar, 2018). This implies that the remaining 58% were neutral or somewhat negative on self-driving cars. As indicated in the study, public perception and acceptance of new technology can be impacted by factors such as negative news reports and knowledge on the subject matter. Currently, there is little need to have fully autonomous automobiles as most people are capable of driving or in near proximity of public transportation. Furthermore, traveling in a car without a driver can be quite unnerving for many people.
The second disruptor characteristic Christensen describes relates to gradual improvements, and the technology moves into mainstream markets. Electronics have been slowly added to automobiles since the 1990’s. Many of these are related to safety or to reduce human error. Safety equipment such as airbags, antilock, brakes and stability control are either mandated or expected to be standard features on automobiles today. It is, however, somewhat of a misconception that the technology to replace human drivers is moving quickly. According to the Society of Automobile Engineers, there are six levels of driver assistance. It is commonly believed that level two is the most predominate today. Most notably, Tesla could be viewed as a disrupter in this space with their Autopilot system. However, most major automobile manufacturers and some technology firms are working on developing a driverless automobile.
Moore’s law is applicable to the advancement of self-driving vehicles as well. Sensors, cameras, radar, small electric motors, and control modules continue to have increased capabilities with declining costs. Add to that auto sales volume, which has a positive impact on economies of scale for these items. As costs to manufacture and incorporate these electronic devices become less expensive, consumer sentiment and price elasticity are likely to increase. Some prototype self-driving automobiles have a large box on the roof, housing the technology. As improvements are made, this will certainly become smaller, better, and more integrated.
How disruptive this technology will be is unknown, but it could change the environment of many businesses and impact the overall economy. Improved safety is only one of many benefits that can be expected. The National Highway Traffic Safety Administration reports that 94% of serious automobile accidents are attributed to human error. In 2016 alone, this totaled 37,451 deaths. Aside from the obvious benefit of saving lives by removing the human component, fewer accidents will have a tremendous impact on many other businesses.
If automobile accidents are significantly reduced, autobody shops will have fewer repairs to make. This in turn may cause employers to reduce their staff or close shop for more lucrative ventures. This will have a ripple effect on manufactures and suppliers of replacement parts purchased by these shops. Further down the chain are the steel, plastic, glass, and paint industries, which will have a reduced demand for its products. The self-driving automobile will also be lighter than its predecessor, requiring less steel structure, since crumple zones will no longer be necessary with improved safety by eliminating driver error.
Auto insurers and appraisers will not be immune to this change either. There will be less of a need for damage assessments and the way automobiles are insured may drastically change. Auto manufacturers themselves will find sales reduced by the number of autos typically replaced by damaged or totaled vehicles. Furthermore, lawyers that specialize in automobile accident suits will have fewer clients, which may necessitate practicing in other areas of the law.
Even if a large number of jobs are lost in these industries, new jobs may be created. Retraining programs could be expanded for those displaced, opening up new positions for educators. Employees with specialized skills in technology and software to service and diagnose these vehicles will be needed. An increase in mobility for those that cannot drive will have a positive impact on the economy, perhaps boosting business at restaurants and retail outlets. Disabled and the elderly may have better and more consistent access to healthcare, in turn increasing the need for additional medical staff. Furthermore, cost savings from reduced automobile insurance rates might also fuel other economic expansion.
While safety is a top priority, there are many other unknown impacts to a fully autonomous automobile. If an accident does occur, who will be liable? Will there be an increase in emissions if cars are driving around without occupants? Will ridesharing become so popular that individual car ownership is no longer necessary? With Moore’s Law pushing the accelerator pedal and the disrupting technology in the fast lane, a change in the way automobiles are used is inevitable. Only time will tell who drives the disrupting bus and who is tossed under it.
Gallaugher, J. (2018). Information Systems, A Manager's Guide to Harnessing Technology (Version 7.0, pp. 149-150). Boston, MA: FlatWorld.
Kohl, C., Knigge, M., Baader, G., Böhm, M., Krcmar, H. (2018). Anticipating acceptance of emerging technologies using twitter: the case of self‑driving cars. Journal of Business Economics. Heidelberg 88(5), 617-642.
National Highway Traffic Safety Administration. Automated Vehicles for Safety. Retrieved from https://www.nhtsa.gov/technology-innovation/automated-vehicles-safety
TRIP (2018). Preserving the Mobility and Safety of Older Americans. Retrieved from: http://www.tripnet.org/docs/Older_Americans_Mobility_TRIP_Report_2018.pdf
Zushi, K. (2017). Driverless Vehicles: Opportunity for Further Greenhouse Gas Emission Reductions. Carbon & Climate Law Review. Berlin (11)2, 136-149