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When will Estonia lose 15 000 job places to the self-driving car?


Rapid growth of the self-driving car technology in next 10 years may already influence Estonian labour market and life arrangement. At the present the known idea exists only in science fiction literature of robots will replacing human’s job is really close in transportation and logistics sector. The young Estonian professional taxi, truck and bus drivers should already consider thinking about what they will do after the self-driving revolution.

Only 10 years ago the self-driving car concept was something that could happen in far future. The processors speed has been doubling after every year and half, which has changed the life in last five years drastically e.g. smart phones wide usage, cloud technologies in data storing and processing and social media. With GPS technology today we already can track cars in real time.

In 2010 one of the richest companies Google announced that they started testing the self-driving car. Such news was accepted in the beginning only as PR statement. In 2013 Google already announced that they really want start producing self-driving cars. There is a strong pressure to start applying new technologies so the big car producers like Nissan and Daimler AG, who have announced that they will start the sales in next decade. Nissan already said that they will have full range of self-driving cars read in 2020.

Car will change the world once again

With the technological breakthrough there are also always influences to the whole society and economy. A hundred years ago the Ford Model-T mass production and making the car affordable meant on one side industrial revolution and on the other side changed car being luxury item into commodity. The loss of coachmen job was the smallest change in the big picture. At least the same scale change will take place in our life organising when self-driving cars will take over.

This will bring along security of the car driving and decrease of car accidents, injuries and deaths. Most of the big car manufacturers at the moment are sure that reliable technology could be developed. This can’t happen without big scale technical testing and most important political and social agreement.

The biggest benefit will be time saving in many jobs and some of the office jobs may move out to the car on the move from one place to another. In 2014 spring Geneva car show there was already a concept car XchangE based on the Tesla model S that was basically designed to be an office.

One very important part will be of course the reduction of logistics costs, because the driverless technology will start making the goods delivery and public transportation. Today already similar technologies are used in agriculture equipment (GPS driven preprogramed tractors), mining equipment, metro carts and of course drones. That will be significant structural change in several sectors. The cost cutting potential is enormous because in developed countries e.g. the driver salary in taxi industry is huge part of the total cost of the service.

The cost cutting will be also in the road construction. The self-driving technologies will communicate with each other as well as with the surrounding infrastructure. That enables vehicles to drive closer, faster and the output of intersection will increase dramatically. TAX and private investments into asphalt laying will be reduced, because there will not be a need for so big roads.

The autonomous cars will also increase the green thinking and effective economy. That is clear that computer operated car will use less energy and the cars could be lighter and will pollute less. Without the need for driver, there probably will be more rent and shared car services.

That is obvious that this paradigm shift will not be easy. The obstacles are both psychological and economical. One side will be complicated infrastructure rearrangement and on the other side the legislation changes. With the changing technological and business processes there will be also a lot of corporate interests who will lose their usual dollars, euros or yen. The process will influence millions of businesses and people.

World vs. Estonia: will we stay on the train?

What has been done in Estonia to stay on globally changing train? We are enjoying our pioneer status in developed national electric car charging network, but we have not been preparing for the coming of self-driving vehicles. At the same time already in 2012 the US two states have started changing the legislation to allow self-driving cars usage. Swedish road Administration, Gothenburg and Volvo signed agreement in 2013 to start using autonomous vehicles on 50 km long highway strip. Google announced its self-driving concept car without driving wheel.

Estonia could be similarly to Sweden on the front row in applying new technology and start preparing already its legislation and changing the new infrastructure. Foreign trade and entrepreneurship minister Anne Sulling said that they have learnt a lot from the quota sales project to Mitsubishi Corporation and Estonia has success story to show on electric car area. Maybe it could be a good time to send a proposal to Nissan concern to offer Estonia as one of the first test country. I really hope that one day the following lines will reach to one of the powerful car manufactory CEO from Estonia „ Dear Carlos, I am writing you first time to …“

Illar Kaasik, Investment Agency OÜ partner