In the evolving technology space, there can be a tendency to assume that a single class of technology will come to dominate. The stand-out example is Tony Seba’s projection that all new road vehicles—buses, cars, vans, trucks —will be entirely electric by 2030, and that all of these vehicles will be autonomous or semi-autonomous. Seba’s makes some good points – of course batteries are getting cheaper and eventually they’ll hit a sweet spot in some market segments, but the use of a logistic function shows that Seba’s projections are way off.
But in an increasingly increasingly complexified world, we tend to observe technological speciation. In this context, speciation is compared to the biological sphere in which multiple species fill different niches by mutation and competition, but share a common genus.
In ‘The Ascent of Money’, Niall Ferguson argues that banking can be described by a sort of evolutionary process with biological corollaries. While being careful to avoid a direct Darwinian comparison, Ferguson argues that the significant shifts in banking business models can be described as speciation. While a casual observer might note an apparent convergence of banking through agglomeration, in fact the process of banking speciation is continually driving divergence in banking, leading to an expanding range of business models, especially related to digital.
A case of technology speciation is consumer audio. From the 1960s to the 1980s, vinyl records and cassette tapes dominated consumer audio. 8-track cartridge players were popular in the US in the 1960-70’s, and premium makes of motor vehicle in the UK, but the introduction of the compact cassette in 1962 diminished its popularity. The Playtape enjoyed short term success in the late 1960s with a 1/8 inch format. 1/4 inch reel-to-reel produced a higher frequency response than compact cassette, better signal to noise, and was a recordable media. The Dolby noise reduction system reduced noise to an acceptable level on cassettes.
When the CD arrived in 1982, it rapidly displaced vinyl, and eventually displaced the cassette tape for cars. The later introduction of CD-stackers permitted 6 to 12 CD’s to be pre-loaded and played in cars. The Sony Walkman (Discman) introduced audio buffering, overcoming the main weakness of CD’s – skipping of the laser. The CD dominated the home, car, portable and mobile players market for 20 years but eventually, even the CD’s dominance was challenged. It’s interesting the way in which vinyl has come back into vogue because of the supposed analog ‘purity’. We now have many audio formats, compressed and uncompressed, platforms and physical media, ITunes, Spotify, MP3 players, USB, MP3, AAC, PCM, SACD .. the list goes on.
The point of this is that technologies tend to evolve towards greater complexity. Although some platforms dominate for a time, there seems to be an underlying process of speciation that fills new niches, expanding diversity. I used the example of the CD because it was superior in so many ways – the physical media, audio quality, signal to noise ratio, frequency response, ease of skipping tracks, cost, longevity – yet even the CD couldn’t withstand the process of technology speciation.
How does this apply to Seba’s thesis? The fundamental error Seba is making is arguing that a single driveline (electric) and a single operating principle (level 5 autonomy) will completely dominate the passenger and commercial vehicle landscape. Gasoline and diesel have dominated because of their superiority as transport fuels. Such is their importance that since the end of the gold standard in the early 1970s, oil has taken on a role as a quasi-monetary commodity. Interestingly, BMW, Honda, Toyota, Hyundai and Daimler are investing in hydrogen. Despite nearly all car makers investing in EV programs, some clearly believe that batteries are a problem.