Science and Technology Are a Means to Profit
I was listening to an interview with former automotive executive Bob Lutz this week talking about his views on the future of the automotive industry. I agree with most of what he thinks. Driving will one day be illegal and driving automobiles will be like horses today. A hobby for rich people. The concept of the automobile brand will fade away and smaller automotive companies that don’t add anything of value outside of their brand will too.
Bob also talked about the tension within the corporation that exists between the most talented minds in the world and the “bean counters”. Judging by the tone in Bob’s voice, he’s tangled with more than one financial analyst and there was no love lost between them. Bob Lutz has always been a product guy at heart. I chuckled because I’ve had to dash the hopes of more than one Vice President with big ideas that didn’t make financial sense.
Bob’s description of the tension within the corporation was accurate. But it’s much bigger than that. The same two forces in conflict within the corporation are the same two forces that shape the progress of society at large. Science and Economics.
My big problem with so-called “futurists” and millennial journalists who’ve never done anything other than write is that they all focus on the science part and forget about the more important force at play. The economics. Economics, for better or worse, exerts a strong gravitational force that influences the order in which problems get solved or technology is implemented.
All technological advances get weighed upon the scales of economics. Just because something is possible doesn’t mean that it’s going to be implemented any time soon. Corporations thumb their collective noses to all manner of technological improvements if the economics don’t make sense. It’s the reason that companies still use Windows XP ten years after its expiration date.
Typically when some breakthrough happens in science or technology everyone assumes that we’ll soon see a massive change in the way we do things or the way that our cities are designed. But the big variable that they’re not taking into account is the economics. Who stands to make more or less money due to this new breakthrough?
Take self-driving trucks for instance. Everyone assumes that all companies would love to convert to automated trucking so that they don’t have to deal with paying human drivers right? Not necessarily. From a logistics financial modeling standpoint, the cost of a human driver is the smallest of the major variables. The biggest variables are the capital cost of the trucks and miles travelled(fuel). Expensive new high-tech trucks only exacerbate the situation. The cost per mile goes up, not down. Only a large corporation like Walmart more interested in positive PR than the unfavorable economics can afford to dabble in the latest technology.
Even governments are powerless in the face of economic realities. The best that they can do is try and channel the economic forces into the direction that they hope it goes. But if they meddle too much, they end up killing the source. Kind of like bending a hose too much so that the kink cuts off the flow of water.
I’m not saying that we won’t see continuation of the massive change that has already taken place. But I am reminding everyone to be cognizant of the economics involved. It moves and shapes society every bit as much as science and technology. And when they are in direct opposition, economic forces will win every time.
Now available in iBooks —> The Tesla Bubble
Bob’s description of the tension within the corporation was accurate. But it’s much bigger than that. The same two forces in conflict within the corporation are the same two forces that shape the progress of society at large. Science and Economics.
My big problem with so-called “futurists” and millennial journalists who’ve never done anything other than write is that they all focus on the science part and forget about the more important force at play. The economics. Economics, for better or worse, exerts a strong gravitational force that influences the order in which problems get solved or technology is implemented.
All technological advances get weighed upon the scales of economics. Just because something is possible doesn’t mean that it’s going to be implemented any time soon. Corporations thumb their collective noses to all manner of technological improvements if the economics don’t make sense. It’s the reason that companies still use Windows XP ten years after its expiration date.
Typically when some breakthrough happens in science or technology everyone assumes that we’ll soon see a massive change in the way we do things or the way that our cities are designed. But the big variable that they’re not taking into account is the economics. Who stands to make more or less money due to this new breakthrough?
Take self-driving trucks for instance. Everyone assumes that all companies would love to convert to automated trucking so that they don’t have to deal with paying human drivers right? Not necessarily. From a logistics financial modeling standpoint, the cost of a human driver is the smallest of the major variables. The biggest variables are the capital cost of the trucks and miles travelled(fuel). Expensive new high-tech trucks only exacerbate the situation. The cost per mile goes up, not down. Only a large corporation like Walmart more interested in positive PR than the unfavorable economics can afford to dabble in the latest technology.
Even governments are powerless in the face of economic realities. The best that they can do is try and channel the economic forces into the direction that they hope it goes. But if they meddle too much, they end up killing the source. Kind of like bending a hose too much so that the kink cuts off the flow of water.
I’m not saying that we won’t see continuation of the massive change that has already taken place. But I am reminding everyone to be cognizant of the economics involved. It moves and shapes society every bit as much as science and technology. And when they are in direct opposition, economic forces will win every time.
Now available in iBooks —> The Tesla Bubble
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