Example: Displacing the Auto Industry
Here’s an example of technological improvement that has the potential to wipe out a major industry that employs millions.
It’s an improvement that also:
- Reduces costs to the end user.
- Enables people make a living on their physical assets, rather than the hours they work.
- Destroys demand in a major industry.
The innovation is simple. It’s car sharing services like Lyft and Uberx.
A recent study by Alix Partners (a market research company) found that car sharing systems have already (!) displaced the purchase of 500,000 cars in the US. Their findings get even more interesting.
When they looked at the impact of car sharing systems in ten major cities, they found that every car sharing “fleet” vehicle currently displaces the purchase of 32 (!!) car purchases/leases.
Project this forward ten years. Add in networked, driver-less cars. How many cars do we need? Not many.
PS: There’s also been a pretty amazing shift in attitudes re; consumer lifestyle with the arrival of Gen Y. It started with a lack of financial resources due to the lost decade after we hit peak jobs in 2000. That financial pain accelerated with the financial crisis. It became permanent behavior with the arrival of online alternatives to consumerism and a willingness to trust/use networks to get things done (i.e. car sharing systems). So, increasingly, Gen Y doesn’t buy.
PPS: Some analysts will claim, wrongly, that if we don’t buy as many “things” as previous generations did, it’s a sign that we’re in decline. That’s idiotic. From a progress standpoint, it’s easy to see that if you can avoid buying a car you are better off across a wide variety of measures.