Written by: Jonathan H. Spadt
Today there is generally consensus that electric vehicles are the future, and autonomous transportation (at varying levels) is going to become common over the next decade. Beyond 2030, it may even take over substantially all transportation. Although the ultimate impact of this transformation on society is not yet completely understood, there is no time to wait for establishing improved cooperation among stakeholders effectuating this change. The transformation to autonomous vehicles (AVs) will change nearly every aspect of our current economy. Markets will be redefined well beyond just automobile manufacturing and other transportation equipment and supply chains. Redefined markets will include real estate, insurance, healthcare, non-transportation related manufacturing, logistics, tourism and legal. Local, state and federal tax and regulatory policy will have to be adjusted to compensate for new needs and the behaviors of tax payers. Universities will have to adjust their curriculums and programs to address new areas of innovation and cooperation. If ever there was a time for intelligent and aggressive management of cross-boundary collaboration it is now, in the face of this exciting new opportunity for economic leadership and success.
Notably, this is not the first time in our history that technology allowed people to change the way they chose to live, sometimes in substantial ways. From 1760-1840, the industrial revolution allowed many people to move to urban centers for work and economic opportunity. Farms became less labor intensive during this time due to automation and more efficient equipment. Interestingly, with technological advancements in transportation during that time, such as the invention of the steamboat in 1787, people were able to move themselves and goods in ways not before available. These changes in lifestyle were made possible by technology allowing people to live in different locations and work in different ways than they had in the past. During the industrial revolution, nearly 1,700 U.S. patents were issued, mostly related to manufacturing. Innovation resulted in choices and new opportunities for prosperity.
In that sense, we are no different today. Advancements in technology continue to pave the way for new opportunities and economic development. The difference, however, is the unprecedented speed, complexity and interrelationships that exist. The accelerating convergence of nearly all areas of technology into essentially every aspect of our lives is removing the barriers that previously existed. Industries and technologies that were segregated from each other just 20 years ago are now converging. That convergence is creating very interesting opportunities for people to improve their lives. But these opportunities for tomorrow will be delayed or even remain unrealized if all relevant stakeholders do not come together and efficiently collaborate today.
Many relevant stakeholders are involved in this transformation, and most fall within one or more of three main categories: policy, law and technology (or science and engineering as subsets of this general category). Each one of these categories will be examined in a series of three articles. This one will lead with insights on policy issues which will become important with the rollout of AVs. Specifically, the consideration of behaviors and concomitant policy implementation can drive decision making and investment strategies as society transitions to the era of AVs. A second article will look at certain legal challenges which will present as a result of the new technologies, particularly with respect to intellectual property protection schemes, ownership and licensing. The final article in the series will examine how societal needs should drive technology and engineering priorities.
Many types of technology are making it less necessary for people to travel to work, but simultaneously AV technology is making it more desirable for people to want to travel to urban and suburban centers. What does this mean for our communities and how will these competing forces be reconciled?
Historically, many people made sacrifices, or at least had to compromise, on where they lived based on where they worked. A typical housing decision required a balanced determination of what could be afforded against what type of commute would have to be endured. With quality of life factored in, this typically meant, for many people, a desire to live as far outside of an urban center in order to get the most house or property they could afford, but within some distance that allowed for a reasonable commute into the urban center.
Today, roughly one quarter of the workforce works at least part time from home, and for those with a higher education, that number approaches almost 50%, according to Bureau of Labor Statistics. This trend of course exists primarily because of technological advancements in telecommunications. Is the ability to work remotely going to cause more people to leave urban centers and move further away? Will even established suburban areas be affected by remote working?
As an isolated variable, the ability to work remotely might indeed cause people to want to move even further away to areas with less expensive real estate. But with that comes the loss of the beneficial aspects of living near an urban center, such as cultural and entertainment opportunities. It is also true that as the distance from an urban center increases, typically there is a drop off in overall transportation infrastructure.
Enter now the increased viability of autonomous vehicles (AVs) to the decision. The availability of AVs to transport people back to the suburban or urban centers when desired may well cause a diminution of any preference to move further away because the ability to actually enjoy the benefits of the urban center without having to endure the commute becomes attractive. In other words, the remote worker still wants to live near an urban center if a viable technology exists for transportation to the urban center when so desired – be it for professional or personal reasons.
Will the convergence of remote working and AVs cause people to change their real estate preferences? This question cannot yet be answered but it should be studied by government at all levels, engineering professionals and policy makers. Studies should include an analysis of the impact on urban sprawl. Interesting questions arise just based on the remote working/AV convergence – will the appeal of AVs actually increase commute times, putting more cars on the road for longer periods, because passengers can work or sleep during the trip? How will this impact infrastructure and energy consumption?
Another area of study should include policy considerations for tax and regulatory changes that might be necessary. If left freely to the market and technology, it may be that for some, the choice in AV might not be an electric vehicle (EV), but a traditional internal combustion engine vehicle (ICV), thus increasing emissions, especially if longer commute times are acceptable due to the use of the AV. Reduced parking lot sizes and road sizes over time due to AVs and ride-hailing services will provide for the re-purposing of land for possible development in urban and suburban areas. Will the increased development potential yield more tax revenue or will people moving further away from urban centers reduce the demand for such development? Separately, if more people spread out to take advantage of AVs, demand on traditional public transportation could decrease. How would this impact revenue to cities and states? These potential issues would possibly be the subject of mitigation through tax policy and other regulatory control.
As noted above, however, a key driver in all of this is the technology that allows for these human decisions and new preferences to emerge. With that recognition, informed policy considerations must necessarily focus on impacts to innovation. Tax strategies that reduce investment in new technologies should be avoided. Changes to laws that make it harder for new businesses to create new technologies and bring them to market should be prevented, and in those areas of law where that has already occurred, urgent attention to reform should be a priority. Decisions on infrastructure and public transportation should be made in conjunction with industry and the contributors of future technologies. This will require an emphasis on long term vision which, unfortunately, is often out shadowed by the short election cycles driving many municipal and other governmental rationales. Institutions at all levels of learning, from high schools to universities, should consider curriculum reform that reflects the increasing role of not just technology in our society, but the increasing importance of shaping legal, economic, and legislative policy to support innovation and commercialization.
The policy considerations noted above are just a few of many which will need to be addressed. Some of course have yet to even be identified. The overriding goal will, however, remain clear: Keep our collective eye on the impacts of our decisions on innovation. Stakeholders in all groups will need to expedite this discussion to achieve the most efficient implementation of AVs. If regulatory agencies step in too soon, it will dampen innovation of other or more creative solutions to the challenges. If they wait too long to get involved, unintended consequences and inefficient behaviors may already have occurred. How best to time the involvement of government with private industry can only be determined though constructive and open dialogue. It is precisely that kind of collaboration – industry/university/governmental cooperation, that must be nurtured and defined now to avoid unnecessary delays and wasted resources.
About the Author:
Jonathan H. Spadt is an attorney, engineer and CEO of RatnerPrestia. He is an expert on global innovation, intellectual property law, trade-related aspects of IP, and global supply-chain IP strategies. With an established worldwide reputation as more than an attorney, but a counselor and policy developer, he has a broad view of economic and trade policies that interact with intellectual property law and policy. He routinely writes and lectures throughout the United States and Europe in both the private and public sectors, and actively participates in policy discussions relevant to trade and IP law.