Winning the Hardware Software Game Winning the Hardware-Software Game - 2nd Edition

Using Game Theory to Optimize the Pace of New Technology Adoption
  • How do you encourage speedier adoption of your product or service?
  • How do you increase the value your product or service creates for your customers?
  • How do you extract more of the value created by your product or service for yourself?

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Latest Comments

  • Anonymous said More
    Well written. Well constructed. Tuesday, 13 August 2019
  • Ron Giuntini said More
    As always a good read.
    I have always... Thursday, 25 January 2018

This post continues the discussion about what society needs in addition to technology to develop. In my previous entry, The Growth and Development Paradox, I established that

  • Technology enables societies to develop.
  • Foundational technologies have existed for thousands of years.
  • Yet, sustainable development didn’t occur until the Industrial Revolution.
  • Technological development is thus not sufficient for societies to develop. There’s something else — in addition to technology —that’s necessary for society to develop.

Let’s consider the automobile as a case study of what else society needs, in addition to technology alone, to be able to develop.

Most people would agree that the automobile has been one of the most influential technologies of all time. Since its inception in the late 1800s/early 1900s, the automobile has fundamentally shaped American society: it has provided unparalleled mobility to the masses, engendered suburbia, empowered women to take a more active role in society, created numerous jobs, and shaped our leisure activities (cruising and road trips, drive-in movies and restaurants, etc.).[1] In short, the motor vehicle has turbo-charged social development.

Currently, about 100,000 patents cover automobiles.[2] That’s a huge amount of innovation! But it wasn’t just automobile technology alone that enabled society to develop based on the automobile. Yes, the automobile offered society the potential to develop. However, to realize that potential, society needed more than just the technology alone: Society needed changes in Community, Markets, and Government to accommodate changes in Technology and unlock the potential that technology provides. Let’s consider the changes in Technology, Community, Markets, and Government required for successful widespread adoption of the automobile in society, thereby enabling mobility of the masses.

Automobiles replaced railroads, horse-drawn carriages, and bicycles as more comfortable, convenient, and efficient means of traveling short and long distances.[1] However, in addition to automobile technology, widespread adoption of the automobile in the US required the majority of Americans to have: (i) disposable income and access to affordable automobiles; (ii) roadways and infrastructure; (iii) widely available sources of fuel and repair services; (iv) public space for parking; and (v) education and licensing programs to teach people how to drive and how to follow the rules of the road.

4 systems automobile

Disposable Income and Affordable Automobiles

Widespread American adoption of automobiles was only possible because automobiles were affordable. Automobile affordability for the masses captures two separate issues: high enough income and low enough price.

First, automobile affordability for the masses means most people had to have enough disposable income to afford a car. Yet, throughout history, the masses had generally been poor, that is, lacking in disposable income. It wasn’t until the 2nd Industrial Revolution was well under way – around the early 1900s – that the middle class began to grow to include a sizable portion of society, and it wasn’t until the post-WWII era that the majority of Americans enjoyed middle class status. So, the automobile would not have transformed society the way it did, had it been invented, say, a century earlier. The success of the automobile was thus predicated upon a certain minimum level of social development, that is, upon society having a sizeable middle class.

And second, automobile affordability for the masses means manufacturers had to be able to produce cars that could be profitably sold for low prices. The profitable production of affordable cars required development of (i) automobile technology, (ii) manufacturing technologies, (iii) manufacturing processes, as well as (iv) reliable access to affordable labor and materials. As for automobile technology, “Hundreds of innovations were required to achieve reliable performance,”[3] which necessitated an ample pools of skilled automobile technologists. As for manufacturing, Henry Ford revolutionized the processes and technologies needed to manufacture profitable, yet affordable, automobiles: standardization and mass production. Ford also ensured a sufficient supply of labor by establishing welfare capitalism. His new standards for limiting employee work hours and increasing benefits reduced turnover, which ensured reliable supplies of labor to man his manufacturing processes.[4] Finally, access to ample supplies of inexpensive steel for manufacturing cars was made possible by the booming US steel industry: “From 1875 to 1920 American steel production grew from 380,000 tons to 60 million tons annually, making the U.S. the world leader.” Had Andrew Carnegie not created his steel empire in the US, automobile manufacturers would not have had such easy access to low-priced steel.[5] So, the automobile would not have been produced at affordable prices, and thus not have been adopted by the masses, if there hadn’t been a pool of engineers who were able to sufficiently develop automobile technology, if standardization, mass production, and welfare capitalism had not been established, and if the US steel industry had not been as developed as it was.

Roadways and Infrastructure

In today’s society, automobile drivers probably don’t appreciate the value of roadways and infrastructure – smooth paving, well-marked lanes and street signs, stop lights, street lighting, and the like – until they are jarred by a pothole in the road or they become lost on an ill-lit, unmarked road in some rural neighborhood. As roads become more heavily congested, well-paved roads and good infrastructure become instrumental in promoting safe driving and in maintaining well-behaved traffic flows. Surely, automobiles could not have provided mobility to the masses as they did, if government had not specifically stepped in – on its own, as well as at the behest of the “automobile lobby” – to provide plenty of roadways and infrastructure to enable motorists to travel smoothly and safely, far and wide.

Like other American cities, streets began to take shape around the needs of automobiles and “the public space of the street belonged in law and deed to vehicles.” This transformation has its roots in the growth of an automobile lobby pushing for more rights for automobiles and the people driving them by framing the uninhibited use of a car as the treasured American value of freedom. Peter Norton observes, “If you ask people today what a street is for, they will say cars.”[6]

Government programs to develop public roadways for automobiles began in 1916:

The U.S. federal government first funded roadways through the Federal Aid Road Act of 1916, and began an effort to construct a national road grid with the passage of the Federal Aid Highway Act of 1921. After Dwight D. Eisenhower became president in 1953, his administration developed a proposal for an interstate highway system, eventually resulting in the passage of the Federal Aid Highway Act of 1956.[7]

Public infrastructure – such as traffic lights, roads with lane markings and vehicle registration – was also needed to facilitate traffic flows as motor vehicles started to become plentiful during the early 20th century:

Systems for controlling traffic and demand for vehicle parking multiplied as car ownership in the District rapidly increased during the early 20th century. In 1907, when standard license plates were adopted, there were 2,200 cars registered in the District of Columbia. Vehicle registration increased to 112,000 by 1925 when the first traffic light was installed and the Office of the Director of Traffic created. By 1928, registrations had grown to 148,000 and white lines were first painted on streets to separate traffic. In 1931, registrations topped 187,000 and the first traffic-triggered automatic signal control was introduced.[6]

Fuel, Maintenance and Repairs

The stream of transportation services owners generate from their vehicles would be short-lived, indeed, unless they had easy access to fuel and maintenance services for their vehicles. Gas stations started popping up in the US in response to demand from motorists, but not enough. Automobile drivers in search of fuel still started clogging streets until enough gas stations eventually became available.

In 1905, about 25,000 cars were manufactured in the United States, and Sylvanus F. Bowser perfected a pump that would take gas out of a barrel and fill a car's tank. The world's first "filling stations" started opening that same year.

Typically, a general store would place a pump out front on the sidewalk.

Soon, cars were snaking up and down Main Street, blocking the movement of pedestrians and horse-drawn carriages.

This problem grew much worse by 1910, when there were 500,000 cars looking for gas and blocking traffic while doing it.

A new type of filling station began to appear - the drive-in.[8]

By pure happenstance, just as lack of available fuel stations were creating congestion, the federal government broke up Standard Oil. Standard Oil had controlled most of the oil in the US. The breakup created many new companies, who now competed for customers, making gas cheap and plentiful for automobile owners.[8]

As for maintenance and repair services, early automobile owners were on their own to find people to maintain their vehicles.

For the early car owner, there were no auto repair businesses. If the owner himself maintained his vehicles, he would seek out a bicycle mechanic, machinist, plumber or blacksmith to repair or fabricate parts.

Wealthier car owners employed chauffeur-mechanics as servants who would drive and maintain their vehicles.[9]

Yet, such services were not easily accessible to the masses. Affordable automobiles for middle class citizens required maintenance and repair services that were more widely and cheaply available. Fortunately, Henry Ford pioneered the use of the assembly line and mass production — making use of standardized parts invented by Olds and Cadillac.[10] The use of standardized parts enabled vehicle repair shops offering reasonably-priced services to proliferate in the 1920s, as demand form maintenance and repairs increased.[9]

Public Parking

The automobile industry could not have flourished without general availability of public areas to park vehicles. When automobiles first started to appear on roadways, drivers would simply leave their vehicles at the curb. However, as more vehicles emerged, “The modern-day dilemma of where to park was borne out of the saturation of cars competing for spaces along the street curb.” The federal government was forced to provide for public parking as early as 1924:

The first mention of vehicle parking problems was in the Annual Report of the Board of Commissioners sent to Congress in 1924. The report stated that, ‘‘parking facilities do not exist and can not [sic] be made to exist to the extent necessary to accommodate even a small portion of the automobiles whose drivers seek such facilities.[6]

Had the government not developed a system of public parking to manage traffic, mass adoption of the automobile would have created more jams and tie-ups than mobility in society.

Licensing and Education

State and local government registration of motor vehicles began with New York in 1901 and had spread throughout the country by 1918. And, it didn’t take long for “concern about incompetent drivers” to become “widespread.” Nevertheless, it took states a few more decades for society to implement a system for training and licensing drivers:

States were slower to require licenses for drivers. Only 39 states issued them by 1935 and few required a test, despite widespread concern about incompetent drivers. Early motorists were taught to drive by automobile salesmen, family and friends, or organizations like the YMCA. By the 1930s, many high schools offered driver education.[11]

Systems providing for vehicle registration and driver education and licensing facilitated the relatively smooth adoption and use of automobiles by the masses. Had these systems not been established, hordes of unregistered vehicles and incompetent drivers would have created more havoc and collisions than freedom of movement.

Summary

The invention and development of automobile technology created the potential for the mobility of US masses. However, the existence of automobile technology alone was not sufficient to promote widespread adoption of the automobile, and thus mobility for the masses. Rather, many other elements in society — from Community, Technology, Markets, and Government — were also needed to support adoption of the automobile.

In Community, society needed a sizeable middle class that could afford to purchase automobiles, a work ethic to support the pool of labor needed to develop and manufacture cars, and systems of education to prepare both engineers to be skilled enough to develop and manufacture cars, as well as drivers to be skilled enough to drive automobiles safely and efficiently.

In Technology, society needed a system for creating an accessible repository of automobile technology, and the development of automobile technology, the assembly line, and standardization of parts.

In Markets, society needed access to reliable supplies of cheep steel, well-functioning labor markets for skilled and unskilled labor, welfare capitalism to incentivize workers to be loyal and reliable, and well-functioning market environments to encourage development of gas and repair stations.

And finally, in Government, society needed a system of property rights to incentivize the development of technology and the supply of automobile products and services, roadways and infrastructure to facilitate automobile travel, public parking to provide space needed to park cars, and licensing and registration systems to enforce safe and efficient traffic flows.

 

Previous post in series: The Growth and Development Paradox

Stay tuned for next post in series...

 

References

[1] See, for example, The Automobile: Effects/Impact on Society and Changes in Cars Made by Generation. 2019, Jan 26. https://axleaddict.com/auto-industry/Affects-of-the-Automobile-on-Society-and-Changes-Made-by-Generation

[2] Staff (2019, July 29). Who built the first automobile? History.com. Retrieved from https://www.history.com/news/who-built-the-first-automobile

[3] Kenneth L. Hess (1996, June 9). The Growth of Automotive Transportation. Retrieved from https://klhess.com/growth-automotive-transportation/

[4] Wikipedia contributors. (2019, October 8). Henry Ford. In Wikipedia, The Free Encyclopedia. Retrieved from https://en.wikipedia.org/w/index.php?title=Henry_Ford&oldid=920280439

[5] Wikipedia contributors. (2019, October 9). History of the steel industry (1850–1970). In Wikipedia, The Free Encyclopedia. Retrieved from https://en.wikipedia.org/w/index.php?title=History_of_the_steel_industry_(1850%E2%80%931970)&oldid=920436977

[6] Ryan J. Westrom, Chris Shaheen, and Rebecca Schwartzman (2018). Parking is for People: A History of Public Parking in Washington, D.C. (And Implications for Transportation Design Today). Transportation Research Record.

[7] Wikipedia contributors. (2019, October 11). Interstate Highway System. In Wikipedia, The Free Encyclopedia. Retrieved from https://en.wikipedia.org/w/index.php?title=Interstate_Highway_System&oldid=920801430

[8] Ira Rosofsky (2007, March 10). The history of the gas station. Retrieved from https://woip.blogspot.com/2007/03/history-of-gas-station.html

[9] A Brief History of The Auto Mechanic’s Trade. IAMAW Northwest District 250. Retrieved from http://iamdistrict250.ca/our-skilled-trades/a-brief-history-of-the-auto-mechanics-trade/

[10] Early 1900s Cars. Anything About Cars. Retrieved from https://www.anythingaboutcars.com/early-1900s-cars.html

[11] Licensing Cars and Drivers. National Museum of American History. Retrieved from https://americanhistory.si.edu/america-on-the-move/licensing-cars-drivers

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