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Intel Foresees a $7 Trillion Self-Driving Future

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【Summary】Intel Corporation revealed the findings from a new study that predicts an explosive self-driving car economy growing from $800 billion in 2035 to $7 trillion by 2050.

Original Eric Walz    Jun 02, 2017 2:19 PM PT
 Intel Foresees a $7 Trillion Self-Driving Future

Intel Corporation revealed the findings from a new study that explores the yet-to-be-realized economic potential when today's drivers become idle passengers. Titled the "Passenger Economy" by Intel and prepared by analyst firm Strategy Analytics, the study predicts an explosive economic trajectory growing from $800 billion in 2035 to $7 trillion by 2050. Additionally, An estimated 585,000 lives could be saved due to autonomous vehicles between 2035 and 2045, the study predicts.

History has proven that technology is the catalyst for massive societal transformation and that businesses need to adapt or risk failure, or worse, extinction. New digital business models ushered in by personal computing, the internet, ubiquitous connectivity and smartphones gave birth to whole new economies. Autonomous driving will do the same.

"Companies should start thinking about their autonomous strategy now," said Intel CEO Brian Krzanich. "Less than a decade ago, no one was talking about the potential of a soon-to-emerge app or sharing economy because no one saw it coming. This is why we started the conversation around the Passenger Economy early, to wake people up to the opportunity streams that will emerge when cars become the most powerful mobile data generating devices we use and people swap driving for riding."

Read the Report: Accelerating the Future: The Economic Impact of the Emerging Passenger Economy

"Not unlike the space race of the 1960s, today's announcement is a rallying cry to the world to put its best minds on this challenge," said Greg Lindsay, urbanist and mobility futurist. "The future of mobility, economic advancement and the emergence of new growth opportunities like the Passenger Economy demand ongoing dialogue. I am excited to partner with Intel, take this discussion on the road and look at solutions through the lens of the diverse industries that will shape our future – from automakers to investors and policy makers to startups."

The new report frames the value of the economic opportunity through both a consumer and business prospective and begins to build use cases designed to enable decision-makers to develop actionable change strategies.

"Autonomous technology will drive change across a range of industries and define a new landscape, the first green shoots of which will appear in the business-to-business sector," said study co-author Harvey Cohen, president, Strategy Analytics. "The emergence of pilotless vehicle options will first appear in developed markets and will reinvent the package delivery and long-haul transportation sectors. This will relieve driver shortages around the world and account for two-thirds of initial projected revenues."

The research firm further points out that autonomously operated vehicle commercialization will gain steam by 2040 – generating an increasingly large share of the projected value and heralding the emergence of instantaneously personalized services.

Vehicle-Sharing and the Rise of Transportation Networks

Ride-hailing companies such as Uber and Lyft are pursuing pilotless fleets with the ultimate goal of obviating the need for drivers and converting what is currently a taxi alternative into, in essence, a public transportation network of shared vehicles comprising a range of vehicle types.

The transportation environment will be increasingly dominated by Uber, Lyft, Zipcar and a host of other ride-hailing and car-sharing services that are already driving down owned-vehicle usage in some metropolitan areas. The global nature and scale of this change has major implications for the long-run potential for the Passenger Economy.

Mobility as a Service

Mobility-as-a-Service (MaaS) represents the value that will be created by the shift in transportation expenditures by consumers and business from vehicle ownership, taxi use, rental car use and public transport to the use of third party transportation services based on autonomous vehicles. Mobility-as-a-Service solutions will represent the essential nature of future transportation and open the door to the passenger economy of the future.

Traffic is a Global Problem

Self-driving vehicles are expected to free more than 250 million hours of consumers' commuting time per year in the most congested cities in the world. City governments in Nairobi, Kenya; Delhi, India; Istanbul, Turkey; and São Paulo, Brazil report that congestion is costing residents and businesses in each city millions of dollars per day in productivity.

The World Bank estimates that over 1.3 million people die in traffic accidents each year. Over 90 percent of those deaths are in emerging markets. To combat this, local, state and federal governments have their collective thumbs on the scale influencing transportation decision-making through the increased application of tolling and road-use charging and restricting cars from driving on particular streets and neighborhoods either for specified time periods or completely.

Major metropolitan areas including Stockholm, London, Singapore, Paris and Hamburg are restricting areas from vehicle traffic, taxing private vehicle owners for driving into the city center, or otherwise discouraging or forbidding the use of vehicles within city limits. Reductions in public safety costs related to traffic accidents could amount to more than $234 billion over the Passenger Economy era from 2035-2045.

Autonomous driving and smart city technologies will enable the new Passenger Economy, gradually reconfiguring entire industries and inventing new ones thanks to the time and cognitive surplus it will unlock.

Being comfortable with a pilotless vehicle, enough to take your attention off the road with all of its inherent concerns and dangers, a concept that most consumers are not comfortable with today. Studies have highlighted this issue. For this vision of the Passenger Economy to truly arrive, consumers' perceptions of autonomous vehicles will need to evolve to where they believe and embrace as fact that these vehicles are 100% safe.

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