MacroPlan was commissioned by the Australian and New Zealand Driverless Vehicle Initiative in mid-2018 to estimate the evidence-based employment impacts arising from the introduction of connected and automated vehicles (CAVs) into the Australian car fleet. There are compelling economic, industry development and environmental benefits for Australia to be an early adopter of CAVs (most of which will be electric). Mobility is a big domestic challenge for Australia with its great distances and its sparse population. There is substantial latent demand for travel demonstrated by the early success of Uber.
CAVs are forecast to formally enter the Australian marketplace in 2020 with the National Transport Council providing the necessary regulatory frameworks. CAVs have different production and operational value chains to traditional motor vehicles. This is because they require substantial software, artificial intelligence, new types of hardware and communications devices. CAVs are also likely to require new recharging and road infrastructure and upgraded telecommunications including 5G bandwidth. Additionally, CAVs require new regulatory, insurance and administrative frameworks.
CAVs will significantly change how we live and use cities. This radically disruptive technology has the potential to substantially improve access to jobs, services and entertainment for all citizens and to create new industries, occupations and prosperity.
MacroPlan’s research demonstrates that Australia is poised for significant job growth in higher value industries and services as it embraces the digital mobility and CAV transport revolution. Platform technologies such as mobile phones have created new industries and increased productivity and employment. Similarly, CAVs will become a platform technology.
Estimating future job impacts requires consideration of likely future increases in travel demand due to CAV benefits derived from lower prices, more choice and the potential for more productive use of in-vehicle time. Digital disruption generated by CAVs and new mobility services will create unprecedented opportunities for the industry and services’ sectors.
There is a school of thought that argues “robots are stealing our jobs” with up to 40% of jobs being lost due to technology (Ford 2015). Research by Borland and Coelli (2017) examine new technology impacts on jobs in Australia since the 1960s. They find no proof that job numbers have decreased as a result of new technologies.
Their research is cited by the Reserve Bank of Australia in a paper on “Structural Change in the Australian Economy” (March 2018) providing evidence for Australia that while technology has made some jobs obsolete, it has created other new jobs and overall jobs numbers have not been impacted.
However, Borland and Coelli (2017) acknowledge that the introduction of technology does cause job polarisation. Jobs involving non-routine and cognitive skills relatively safe from artificial intelligence tend to be concentrated at the top and bottom of the skill distribution whilst routine and repetitive skilled jobs are concentrated in the middle. New technologies have decreased the relative demand for middle rung jobs and consequently hollowed out the middle of the labour market.
MacroPlan’s research finds a net increase in jobs for Australia with the introduction of CAVs. Its research presents a set of projected employment benefits through three phases of CAV implementation. MacroPlan’s view is that these phases need to be traversed before widespread acceptance and availability of CAVs make them ubiquitous.
- Phase One is the Investment Phase from 2018 to 2025 focussed on research and testing generating almost 2,000 direct and indirect jobs
- Phase Two is the Implementation Phased from 2026 to 2035 focused on accelerated take-up generating over 3,200 direct and indirect jobs
- Phase Three is the Transformative Phase from 2036 to 2045 focussed on hyper-mobility generating over 9,200 direct and indirect jobs.
Key industries that will experience employment growth in the research and testing phase are professional, scientific and technical services, information, media and technology and administrative and support services.
By 2025, CAVs will be common on Australian roads. This will mean that the mobility industry in Australia will go through an accelerated take-up phase with job gains and job losses becoming evident. For example, job losses will go beyond drivers to sectors like health, police, insurance and car repairs due to reduced accidents.
CAVs are likely to require new infrastructure, hardware, software, road infrastructure and telecommunications. In addition, CAVs require new regulatory, insurance and administrative (e.g. cybersecurity) frameworks which will generate new jobs.
MacroPlan’s research finds that the introduction of CAVs will lead to increased levels of economic activity, productivity, wealth and employment. Platform technologies such as mobile phones have created new industries and increased productivity and employment and MacroPlan predicts this will be the path for CAVs.
For further information on this report or to better understand the impacts of Autonomous Vehicles, please contact Tony Carmichael, National Principal Strategic Advisor today.