Transportation – an Exciting Investment Opportunity Thanks to Artificial Intelligence
Artificial intelligence is fueling a new transportation revolution. The greatest investment opportunities will be found where the possibilities offered by AI are matched by growing need for transportation.
Technological progress has a way of turning an industry on its head and making what was once commonplace completely obsolete. Before the Industrial Revolution, the majority of people worked on farms. Steam power and railway transportation generated a manufacturing revolution, creating new jobs and eliminating old ones.
Now, artificial intelligence (AI) is fueling a new transportation revolution. Driverless cars. Drone airports. The world, delivered. The idea of transportation robots and automation feels like science fiction come to life. However, it is the potential practical benefits that make this sector an exciting investment opportunity.
Automating the European Transportation Industry
In 2014, the European transportation market accounted for EUR 960 bn and over 10.5 million jobs between haulage and storage. Some 78% of that tonnage was moved by road – around 14.5 billion tons out of 18.6 billion.1 The problem is that these freight shipments by road create massive bottlenecks, impact the environment, and limit the mobility of both people and goods.
AI transportation solutions can reduce the number of accidents and costs relating to congestion while providing an additional benefit of improved energy consumption and a decrease in pollution. More generally, technological advancements in transportation, such as automation, can promote trade and make geographic areas more accessible, fueling economic growth and the creation of new jobs.
Quantifying the AI Opportunity
The European Commission and the robotics community formed a robotics Public Private Partnership (PPP) in 20122 and are working to reach certain market goals in accordance with Horizon 2020’s Strategic Research Agenda.3 They quantify the impact of AI on the European robotics industry as culminating in more than 140 new companies and over 245,000 new jobs. As routine work in the field of transportation becomes automated, increased labor productivity and new job types will transform transportation and the associated industries, much in the same way as the first Industrial Revolution took people away from the farms and into the factories.4
Roughly 60% of the new positions the PPP identifies are expected to be within the realm of service robots and driven by increased productivity as jobs in this area become more highly skilled. Another 75,000 jobs are expected to be created in European manufacturing companies, while the remaining 30,000 jobs will be new roles of a more high-tech variety, focused on the components and software needed to run these intelligent systems.
How AI Transportation Affects Business
AI transportation changes the way companies do business. For instance, in the EU, trucks can operate outside the country in which they are registered. As such, they do not have as many empty return journeys and competition is encouraged throughout the EU. However, these trucks are limited by the number of hours a driver can drive in a given day or week. As road transportation becomes automated, driverless trucks could be running three times as many journeys – giving road transportation a similar level of efficiency to rail transport, without being limited to where the train tracks run.
Soon, transportation may no longer be limited to where the roads run either. Landlocked areas in Africa, such as Rwanda, are already introducing drone ports that could make almost half the country accessible and dramatically increase the market opportunity for companies serving the area.6
Finding the AI Investment Opportunity
Horizon 2020’s Strategic Research Agenda says that most of the new AI companies that will come up over the next few years will be spin-offs from university research centers and institutions. However, the greatest investment opportunities will be found where the possibilities offered by AI are matched by growing need for transportation. AI presents a real opportunity for radical transformation of transportation, to the benefit of businesses and consumers around the world.