All the transportation trends indicate that if we keep going in the direction we are going with regard to the level of investment in transportation infrastructure and the kinds of technology that we bring to bear for improving the automotive infrastructure, then an outcome of perpetual, increasing gridlock on more and more of our highway infrastructure is inevitable. The way out of this otherwise ineveitable problem is for us to reinvent the concept of auto-mobilituy and in particular bring to bear technologies to automobiles that we’ve done in so many other areas in terms of automation and this presentation is to look at the economic case of how such a reinvention of automobility might be implemented.
First it is helpful to look back at the rather extraordinary relationship between the growth in per capita wealth and the parallel, almost matching rate of growth and trend of growth in automobility per capita; that is to say, the vehicle miles of travel per capita. What we see in the trend data taken from US census data is that both the per capita GDP and the per cap VMT have increased over five-fold from levels in the mid-1930’s which is the earliest period for which we have data available. Now this is an extraordinary correlation between two trends and the relationship between the two is not happenstance. It’s not that we get more money and therefore we drive around; on the contrary, the relationship is in fact that the availability of personal automobile travel is a powerful productivity enhancement in optimizing resource allocation in the economy – in the US as well as other developed economies. The economic impact appears on multiple fronts. First and foremost the automobile is a powerful productivity tool for the labor market. That means that for a given individual the number of jobs that they can apply to, that they can reach everyday via an auto-assisted commute, is several orders of magnitude greater than it would be if they were limited to locations they could reach on public transit, on bicycle or by foot. This is because they can go a greater distance in almost any given direction. So they can go to all those employment opportunities that would otherwise be unavailable to them if they were limited to transit, bicycle or their human mobility.
Similarly, employers are able to draw from a vastly larger pool of labor. What this means of course is that employees can seek out the jobs for which their particular skills are going to get the highest rewards; conversely, employers can seek out the employee that offers the highest level of skills for the amoung of reward that they are willing to pay in terms of wages and benefits. So this means the distribution of labor is optimized far more effectively than would be the case without automobiles.
There are other major avenues through which auto-mobility has a favorable impact on the economy. The ability for free and unfettered travel on the highways is a big boon to businesses; it permits them to handle their management of services, deliveries and inventories in a way that would be much different if they didn’t have greater mobility. It permits the phenomenon we witnessed in the last couple of decades of the 20th century of just in time inventories, whereby businesses are able to manage the use of their supply lines in a way that minimizes the amount of supply they have to have in the pipeline per unit of output. This benefits businessees economically through higher profits and the ability to offer lower prices.
Finally, there are substantial benefits to consumers, whose spending accounts for approximately two-thirds of our economic activity. They can avail themselves of greater shopping opportunities. The phenomenon of the big box retailer is made possible by the automobile. Auto-mobility allows consumers to travel further to shop for big ticket items, like automobiles, furniture and appliances, at the best possible prices. Vendors can thereby locate themselves in places where they can minimize their property costs while maximizing their reach to potential buyers. Consumers also enjoy better access to health care, to education opportunities, to a greater range of entertainment and dining opportunities. The scope of available opportunities and choices are multiplied many times because this means of transportation is readily available.