17
May

Meeting climate change with a broad perspective

Today Stockholm sees its first day in over a week without clear skies and peak temperatures above 20’C. In May. By meteorological standards, summer arrived as early as April 21st in Stockholm – something that has only happened three times before since measurements started in the late 1700’s. Is this in itself a sign of climate change? Perhaps not – and even if it was, most might actually welcome the early summer with glee – but globally the evidence pointing towards an increased average temperature of the planet is indisputable. Our climate is changing.

Plenty of voices around the world scream for humanity to change her habits – eat less meat, don’t use plastic, grow organically, stop wearing fur, wear more fur, etc. The arguments are numerous and, as a contributor to nearly thirty present of the world’s greenhouse gasses, our transportation habits are under heavy fire. Topics such as increased taxes on airline traffic, higher fuel prices, more efficient public transportation and so on have gained a large part of the public eye, but while an increasing amount of people are becoming environmentally conscious, will everyone stop traveling simply because the climate demands it? Will we stop transporting goods from one city to another? Could we, even if we wanted to?

We believe that the answer is more or less no. Humanity is likely to change her habits to some degree but not cut them off entirely. From our point of view, since the environment and our habits are changing, a more interesting question is how does technology need to change so that we meet not only today’s demands, but also tomorrow’s, without having too large of an impact on the climate.

“Disruptive” technology shifts

In the EU, transportation stands for roughly a quarter of all greenhouse emissions, with road transportation claiming a whopping 73% stemming from road transports. Efforts to reduce road transportation’s contribution to greenhouse gas emissions are already underway. Hybrids cars, full-electric vehicles like the Tesla, hydrogen powered cars like Toyota’s Mirai; different versions of low-impact cars are appearing on the market every year, but the road to fossil-fuel free transportation is long. Similar test runs have been made within the haulage sector, and public transports: several municipalities in Sweden are currently doing test runs with autonomous, electric buses.

All of these solutions are impressive and some are truly pioneers in their respective fields, but a lone pioneer is not the same as a settled colony. Throughout the technological era, there have come several tipping points where new technologies changed the playing field forever. Take the digital camera for instance. It was an engineer at Kodak who successfully constructed the first self-contained electronic camera in 1975. It would take almost 30 years before the digital camera showed its head for real in more commercial settings, but once it did, it only took five years for Kodak to drop from the number 1 seller of digital cameras to the seventh. Another two years later and Kodak was forced to file for bankruptcy.

In the Kodak case, the company had all technological advantages it needed to claim the market, but old business models and a lack of understanding for its customers lead to Kodak’s ultimate demise. Typically, this situation, where a new technology leads to the down fall of initially strong firms, is referred to a disruptive technology shifts. They disrupt well-established firms and change the playing field; those that manage to adapt flourish, while those who don’t perish.

When it comes to transportation, climate change is forcing a major shift in technology. Electrification and alternative power sources are a must if humanity wants to continue her current traveling and shipping habits. This pushes major firms like Volvo, Scania, Toyota and so on to step out of their comfort zones and give new technologies a try, or they will be outdone by upstarts such as Tesla. To deal with this, various pilot projects are launched, such as the already mentioned autonomous Volvo truck or Scania’s electric road in Gävle. These are early attempts that hope to set the global standard going forward, but is this the right way to approach the problem if the long-term goal is to remain leaders on the market?

The risk of Early Bird mentality

“The early bird gets the worm.” – Old proverb

The importance of being first on the market should not be underestimated as there are many cases where early-bird companies have continued to become leaders within that field for a very long time, such as with Apple’s iPhone. However, as with Kodak, being first isn’t always best. Kodak had all the technology they needed, but they misinterpreted the market and didn’t change their business model to adapt to the new situation. Facit is another example. They manufactured the first ten-digit calculator in 1932 and incorporated it into their already existing business model of selling office supplies and furniture. By the early 1960’s Facit dominated the market and continued to develop and enhance their mechanical calculators. Unfortunately, electronic calculators were on the rise and while Facit managed to develop an electronic version through collaboration with a Japanese company, the market very soon lost interest in Facit’s furbish-your-entire-office selling model. It didn’t take long for them to disappear after that.

In both of these cases, the needed technology was available but the business model was outdated. Compare this to Toyota – originally a maker of looms – who didn’t have the technological knowhow of building cars but used their unique mind set so create an adaptive business model for car manufacturing and sales. They were not early birds, far from it, but they used their strengths and learned from the T-ford product line, developing a more adaptive product line that allowed for a variation of customers. They, much like Scania, didn’t lock their product to one solution but rather planned for the possibility of variation.

This ability to variate the product after the customer, in a form of mass customization, was and is what have given both Toyota and Scania their strength over the years. This is even more prominent within Scania where extensive modularization more or less allows each customer to design their own truck. If the customer wants it, Scania can produce it.

With this in mind, the idea of the early bird becomes less alluring. What point is there in being the first to develop a very specific solution if it doesn’t meet the customer’s needs? Not every new product can be the next iPhone and forcefully revolutionize humanity’s habits. More often than not, technological solutions have to adapt themselves after the customer, rather than the opposite. If we wish to extensively reduce transportation’s impact on the greenhouse gases, single solutions will not do the trick. All transportation needs must be fulfilled, both present and future. Is it then best to be first on the market, or is it better to be most adaptable?

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