As we listen to the daily news, everything is relying on Artificial Intelligence (AI). There are predictions that AI will cure cancer, diabetes, heart disease, etc. There also is concern that AI will create massive layoffs, lower wages, and unemployment. This past May, college students booed commencement speeches when they made claims about how great AI is, as many of these students were unable to find employment.
Closely related, and dependent on AI, are autonomous vehicles (AVs), and the same questions exist about AVs. If I am a truck driver, will there be a job for me as the industry becomes familiar and comfortable with AVs?
I think the honest answer is we really don’t know the true impact of AVs. Regarding the larger question of the impact of AI, we have two CEOs making opposite predictions. Amazon’s Jeff Bezos indicated that AI would create more work than what it destroys, while Tesla’s Elon Musk said, “AI makes most jobs obsolete.”
Furthermore, when it comes to AVs, the whole idea is to eliminate the most expensive cost for the fleet. A recent study indicates that the driver is the largest operating cost for a fleet, higher than fuel. (There are other potential benefits of AVs such as safety and asset utilization, but this blog focuses on employment.)
What does history tell us about technology and industrial revolutions?
Over the last 200+ years, we have experienced industrial and technology revolutions. In the 1800s we experienced an industrial revolution with the introduction of the steam engine, mechanized machines, etc. In the early 1900s, the electrical grid was developed, and the telephone, and internal combustion engines were invented. Then we’ve had the age of the computers starting in the 1970s with microprocessor and transistors and moving to the connected age of cell phones and cloud computing, etc. We are now in the age of AI, autonomous, etc.
What can we learn from these revolutions relative to jobs and productivity? A McKinsey Podcast – shared these facts and points:
- Since the 1960s, 79% of the time when we gained productivity, we experienced employment gains. There have been some years of net job losses, but over a five-to-ten-year period there have been zero net losses of jobs. The new technology increases productivity, reduces the cost of goods, creates more demand, and introduces new innovative products.
- 2. For every technology change, there are losses to specific existing jobs but also creation of new jobs. For example, the podcast says we lost 3.5 million jobs directly to the computer, but it created 19 million new jobs.
- 3. Skills need to change. In some cases, less skilled workers were able to be employed. The example often given is of a cashier at a grocery store. Before scanners and computers, the person needed some basic math skills but now with scanners, less skilled workers can fill this job function. On the other end of the spectrum, higher skills are needed, driving higher wages, but also creating the need for training. As an editorial note, it does seem that technology is somewhat bi-modal, meaning some higher skilled and higher paid roles develop, but also lower skilled and their accompanying lower paid jobs emerge.
Figure 1 shows a well-known economic theory that innovation and new technology create new products and markets, lower costs, thus creating higher demand, economic growth, and employment.
Figure 1: Illustration of how innovation drives growth and jobs.AI generated
How quickly does this take place?
As these transitions take place, it is important to realize that they do not happen overnight. In many cases, attrition through retirement can address many of the job losses. A study by the Department of Transportation indicates it can take 20+ years to completely transition to a new technology. This study also predicts that driving automation will improve productivity thus improving Gross Domestic Product (GDP), employment and wages. It predicts that the transition can occur without massive layoffs given today’s turnover. Even under a fast adoption scenario, only 1.7% of the long-haul workforce would be lost per year.
NACFE can validate this slow transition of technology through our semi-annual Fleet Fuel Study. (Be on the look-out for our updated report which will be renamed the Fleet Efficiency Study and released late this year.)
Figure 2 shows technology adoption on trucks. Note one of the most aggressive adoptions has been the powertrain (red curve), but even with this technology, the adoption has gone from approximately 15% in 2003 to nearly 55% in 2023. So, it has taken more than 20 years for fleets to only partially transition to fuel-efficient powertrain options such as automated manual transmissions, direct drives, downspeeding, etc.
Figure 2: Technology adoption in the trucking industry.NACFE Annual Fleet study
Lost Jobs
If AVs are successful, there will be a loss of truck driving jobs. The trucking industry would not be pursuing AVs if it wasn’t for the fact that the driver is the largest operating cost for a fleet, higher than the cost of fuel. Also, AVs potentially can address the driver shortage (or retention) problem the industry faces.
Numerous studies have been conducted to assess this. One that looked at the impact of jobs related to AVs provides this useful information: There will be three phases of the impact of AVs on truck drivers over the next 20 years. The first phase might shed 30,000 to 80,000 driver jobs and consist of the easy routes (sunbelt area) with humans handling the first and last mile. The second phase shows an expansion of the corridors which would result in 15% to 25% of freight miles covered by AVs. The third phase will occur between 2035 and 2045, and it estimates the potential of 1 to 2 million jobs to be lost.
Also, it is worth noting there will be a ripple effect. As the long-haul driver fades away, there will less need for truck stops and travel centers, roadside motels, restaurants/diners, truck driving schools, etc.
Job Creation
Here are some of the new types or jobs that AVs will create.
- Command center specialists: These people will monitor the AVs. Much like an air traffic controller, they will sit in a control room, monitor the location and health of the trucks. They will address issues such as breakdowns, unmapped road closures, and any unexpected problems.
- 2. Transfer hub specialists: These people will work in the yard or terminal. They will connect and disconnect the trailer to the truck and conduct pre- and post-trip inspections of the tractor and trailer.
- 3. Technicians: Given the new technology, these mechanics of the 21st century will need to maintain and service the units. They will need to become familiar with Light Detecting and Ranging (LiDAR), radar, cameras, drive by wire, software/controls, etc.
- 4. Local drayage and short haul: These people will drive trailers a short distance while the AV runs the long haul.
Other than the technician who will need to travel to a problematic unit stranded on the highway, these roles will be centrally located. This fits well with today’s young workers who do not want to be away from home. Therefore, AVs will bring a better quality of life and some valuable work-life balance.
As noted earlier, it could take 20 years to fully develop a new technology, and as it is being created, new types of jobs will be needed and are actually being sought after by companies such as Aurora. There are current job openings such as:
- Development engineers and technicians at the OEMs (and AV companies) to develop and validate the algorithms, sensors/cameras, etc.
- 2. Specialists who hold a commercial driver’s license to support the testing and validation of the technology.
- 3. Mapping quality engineers and technicians who process and triage map issues.
One study indicates that these roles can provide 280,000 to 500,000 jobs.
We live in one of the most interesting times that humans have experienced. With each invention there certainly can be a negative impact to a person and their family, and this should not be taken lightly.
If I were in this year’s graduating class and unemployed, or a factory worker losing a job to automation, I would not feel good. However, thus far, these inventions make our lives easier, increase productivity, lower the cost of living, and create new jobs, some that we cannot imagine until the new product arrives. To aid in this transition, it is important that companies and the government help individuals’ retool their skills.
