Friday, December 26, 2014

A Vehicular Race to the Bottom

This idea inspired by Matt Johnson's entry on Syracuse. It's an quick read (like, one-page memo quick), but if you can't bring yourself to visit his great site, the premise is thus: Syracuse was partially built on being the home of Carrier air conditioners, and eventually became the "Air Conditioning Capital of the World." The city was spurred on by the economic activity of the air conditioning industry. However, air conditioning allowed the south to become much more productive, and as jobs moved south, the industry that helped build Syracuse also contributed to its demise.

Where else can success lead to demise? The car industry. I'm unabashedly one of those dreamers who sees an interstate featuring self-driving cars in 2020 - and with them, the fall of private car ownership. While some will still own cars, being able to schedule a pick up and drop off from automated Uber should become cheap, simple, and ubiquitous once automated cars become the norm. The demise of private car ownership would be disastrous for car companies.

The company that puts the best automated car on the road will make bank. It will also be responsible for a marked decrease in overall industry profits. That's why the most fascinating research in this technology is happening in Silicon Valley - not Detroit. GM and Ford will step up and provide the vehicle for this technology, but it will be a reluctant union.

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