As part of the Australian Future Transport Mission to China, our CEO Peter Damen is in China meeting with leaders in transport innovation and autonomous vehicle technology to gain further insight into the transport technologies of the future. Yesterday he had the pleasure of meeting with BAIC International, the top electric vehicle supplier in the world. Currently, they are monitoring 345,000 of their BJEV electric vehicles across the Chinese road network, which have driven 5.1 billion km. Peter was impressed by their innovative transport technology program. They are currently in development of the Optimus Prime project which aims to increase sustainability in the development of new energy vehicles and usage. They also created the Darwin system which is a self-growth vehicle intelligence system. BAIC plans to enter the European market with its electric Arcfox brand unveiling an SUV named the ECF as well as its GT electric supercar. Arcfox currently sells the Arcfox Lite which is a two-seater SUV released in China in 2017. 

Thanks go to all of our speakers that did such a great job at the "Connected and Automated Vehicle and Emerging Transport Technologies workshop" for local government on Wednesday 13th March in WA.
​

• Roger van der Lee from Aurrigo
• David Pickett from Volvo Cars Australia (pictured below)
• Rafael Toda from Local Motors
• Alistair Richardson from CarShareWA
• Kamal Weeratunga from Main Roads WA
• Alizanne Cheetham from the Department of Transport
• Colin Pumphrey from the City of Swan
• Larry Schneider from Level5design
• Col Brindle from Komatsu

Thank you to all those that made the effort to join us for the day. IPWEA are doing a great job and we are pleased to be able to support their association and to help their members.

Our Level5design stand at the IPWEA State Conference in Fremantle over the 14th-15th March. 

Here is our CEO Peter Damen presenting a plenary talk on Connected Automated Vehicles and Emerging Transport along with a panel of representatives from across Australia.

​The talk covered the emerging technologies in automated and connected vehicles to allow organisations the opportunity to become better prepared for the coming changes.

​There has a lot of talk and debate recently on what the impact of increasing automation will have on our workforce, national productivity and individual and collective economic prosperity. If you were to listen to and observe all of the commentary on the issue then you would quickly come to the conclusion that there is considerable disagreement among and between technology experts, social economists and policy makers about the impact that automation, and more specifically driverless vehicles, is likely to have on jobs, and on specific types of jobs.
 
Most acknowledge that automation will be disruptive in the short term and that at least some parts of the workforce will be negatively impacted. Some commentators note, however, that historically periods of rapid technological change have created more jobs than they have eliminated, and they have stimulated both wage growth and per capita incomes. A good example is the introduction of computerisation during the last century – we now have a whole IT industry where none existed before, and we have new and more skilled jobs in many areas.

A working paper released by the International Monetary Fund (IMF) in the last few days discussing "Should we fear the robot revolution?" suggests that the current technological revolution, often referred to as the “AI revolution” or the “4th Industrial Revolution”  may be different than previous periods of rapid technological change. It finds that automation is good for growth but bad for equality and that there are “good reasons to believe that a resilient, adaptable economy will again vanquish the specter of technological unemployment”.

As reported by Cowan from the Centre for Independent Studies, optimists argue that advances in robotics and artificial intelligence will make how we work safer and/or better while creating new hitherto unimagined jobs and/or unparalleled opportunities for leisure. Pessimists on the other hand worry that technological innovation will lead to machines making much human labour redundant and creating mass unemployment. Driverless vehicles, and in particular driverless trucks, have often been cited as the first places where this will happen. Cowan goes on to say that “for as long as innovation has been finding ways to make labour better or easier there have been concerns about technology displacing labour”.

There is a lot of conjecture on when we will see highly and fully automated vehicles on our roads, and following that, when they will form a sizable portion of the fleet. There is certainly a lot of hype out there and many false predictions. Research by Grace et al (2017) , found that AI researchers on average expect to see AI outperforming humans at driving a truck by 2027 and having a 50% chance of outperforming humans in all tasks within 45 years. I have been advocating for some time for us to accelerate our activity in the automated vehicle space to take advantage of the benefits earlier. And from what I can ascertain right now, it would seem likely that we will see fully automated vehicles commercially available in an array of on-road applications within the next decade. And we will most likely have conditionally automated vehicles on our roads by 2020. That is certainly the intent of the Australian governments Transport and Infrastructure Council. In November 2016, the Australian transport ministers agreed to a phased reform program so that conditionally automated vehicles can operate safely and legally on our roads before 2020, and highly and fully automated vehicles from 2020. The current consensus seems to be that about 20% of new car sales in 2030 may be fully automated rising to much higher proportions by 2040. Much of this will be fueled by fleet sales and the growth in activity generated by Asia. But predictions in relation to driverless trucks are much less reliable and despite the obvious productivity benefits, seemingly slower to be embraced right now. Certainly, a significant part of the reason for this outcome is the concerns re jobs and employee reskilling and the highly regulated nature of the trucking industry.

Some like the World Economic Forum say we are on the cusp of a 4th industrial revolution based on advances in artificial intelligence and robotics. In one of his recent reports Cowan makes some excellent comparisons between the AI revolution and the 1st industrial revolution of the 18th century. He quotes economic historian Deirdre McCloskey, who identified that following the Industrial Revolution national income increased in Britain over the following eight decades by a factor of nearly seven. Furthermore, in his writings on the future relationship between technology and inequality Davis notes that “a number of emerging technologies are by their very nature likely to spur entirely new professions or industries as strong complements to human ingenuity".

As mentioned, the IMF working paper concludes that automation is good for growth and bad for equality. They predict that real wages will fall in the short term but eventually rise, albeit over several generations. And they acknowledge that this outcome appears somewhat consistent with what happened in the 1st Industrial Revolution. Davis states that levels and distribution of wealth and income inequality are dynamic, and that there is rising evidence that the majority of the impact of new technologies on workers will not be from entire job categories disappearing, but rather shifts within professions in terms of demand for skills. And work by the World Economic Forum indicates that the vast majority of the workers currently holding jobs experiencing technological disruption will be able to transition to other jobs with some reskilling.

The Australian Government reports there were 184,200 truck drivers in Australia in 2017, 96.1% were male, and their average age was 47 years, with 1 in 5 being at retirement age. The average age of truck drivers was much higher than the average working age for the entire population. There is an 8.7% growth in jobs predicted in this sector over the next 5 years despite the age profile of drivers and the challenge in front of us with satisfying growing employment demand. Introducing greater levels of automation has the potential to help solve some of these challenges and make the current jobs in the industry potentially more enriching if the mix of tasks evolves and adapts.

A thought leadership paper by the Australia and New Zealand Driverless Vehicle Initiative on the "Economic Impact of Automated Vehicles on Jobs and Investment" states that based on achieving 1% of the global intelligent mobility market, Australia would generate approximately 7,500 direct jobs and 16,000 direct and indirect jobs based on traditional car manufacturing parameters. The opportunities are also documented in a report published by the International Transport Forum (ITF) regarding "Managing the Transition of Driverless Road Freight Transport" which states that automated trucks would enable cost savings, lower emissions and safer roads, and that they could also address the shortage of drivers being faced by the industry.

Some commentators have questioned the approach the Australian government took with government assistance to the automotive sector over the past decade. For instance, of the approximately $1 billion in funding announced in 2013 to be provided to the industry over the following five years to support vehicle manufacturers and supply chain companies, only $15 million was committed to assist automotive workers made redundant to reskill and find new employment. The suggestion here is that if more government assistance was directed to worker reskilling as greater automation comes into effect then we could benefit more substantially through more jobs and new market opportunities being created. CEDA recognises the importance of worker support programs in the statement by Davis that perhaps "we should view transitioning and supporting Australian workers as an opportunity, not a threat".  

While the ITF note that the adoption of driverless trucks is likely to reduce demand for drivers at a faster rate than a supply shortage would emerge, this needs to be offset against many of the other societal benefits that are likely to accrue, such as improving road safety and saving lives. How do we value lives against jobs and do we even have to do that if we get the transitional phase right and invest early and properly in reskilling and upskilling programs? As highlighted by the ITF, preparing now for potential negative social impacts of job losses will mitigate the risks in the event a rapid transition occurs.

What all of this comes down to is that there is merit in exploring further innovation and automation in the trucking sector, in combination with programs to upskill and reskill workers within that sector over time. There will be those that resist, but I am of the view that it is much better to be prepared, and in a position to benefit from the insight we can gain, and to be technology leaders rather than followers. We clearly need to become better informed and to do that we need to be more active in conducting further field trials, pilot programs and real world deployments. And we need to do it armed with the evidence and thinking of what it might mean for jobs, workers and end to end productivity. If we do that then there is a good chance that we can become both the architects of a newly reinvigorated and globally competitive industry and the creators of a greater number of more highly skilled jobs, that might otherwise not exist.

I would be interested to hear the thoughts of innovators and other industry leaders on the findings of these recent reports and how we might work together to achieve better outcomes from automation in the transport industry sooner.