“TODAY, WE’RE LOOKING AT SCIENCE FICTION BECOMING TOMORROW’S REALITY,” said California Governor Jerry Brown in late September at Google’s headquarters in Mountain View, CA. So, what “science fiction” was the governor referring to and what are the investment implications?
About 120 years ago, a German mechanical engineer named Karl Benz coupled an internal combustion engine with a chassis and four wheels. Today, we know it as the automobile. While the internal combustion engine was the transforming technology that made the modern automobile possible, we don’t define, value, and think of cars in terms of how well they process gas. Instead, we think of what cars can do for us.
Cars dramatically changed our lifestyle. They allowed the rise of suburbs. They enhanced the family vacation. They played host to many dates and first kisses. They created millions of jobs in road construction, manufacturing, dealerships, repair shops, and, in fuel exploration, processing and distribution.
Likewise, Governor Brown’s announcement of a new law making it legal for driverless – yes, driverless – cars to travel on public roadways in California could dramatically reshape the impact cars have on our lives.
Here are a few ways society could change:
- With no need for steering wheels, pedals, and other manual controls, manufacturers of those parts would be out of luck.
- With no driver and very few road accidents, say goodbye to expensive car insurance policies.
- With few road accidents, say goodbye to most of the roughly 2 million hospital visits per year in the U.S. caused by car accidents (many lives saved!) and say goodbye to all the time and resources spent by doctors, nurses, and staff, devoted to helping these accident victims.
- Say goodbye to taxi drivers and limo drivers and hello to a driverless “Zipcar” or similar type service.
- Say hello to electronics and software companies who will provide the sensors and computing power needed by these cars.
- Say hello to an expanding suburb and rising suburban housing prices as the driverless car will make a long commute more palatable since you can work or play while the car goes on its merry way.
- Say hello to increased mobility for people with certain disabilities.
Sources: The Economist; Forbes
The driverless car is no longer science fiction. Google already has a fleet of them and some of its employees “drive” them to work.
From an investment standpoint, this is an example of the type of deep research and thinking we do on your behalf as we strive to meet your goals and objectives.
Weekly Focus – Think About It…
“The best way to predict the future is to create it.”
Peter Drucker, management consultant, educator, author