By James Arbib and Tony Seba
In 1911, Ferdinand Foch, who would become the supreme commander of the Allied Forces during World War I, famously said “Airplanes are interesting toys, but have no military value.”
In 1927, Charles Lindbergh famously flew across the Atlantic, landing at Le Bourget field outside of Paris.
Three years later, France started building a wall, the Maginot Line–a massive series of fortifications along its borders with Germany that became the centerpiece of its defense strategy. A younger modernist generation, who had seen the evidence of the value of the airplane, favored investment in armor and aircraft, but this thinking was seen as disruptive and was defeated by the insiders and policymakers trained in 19th-century military strategy who still ran France’s military.
In the meantime, the Nazi government built the Luftwaffe which, by 1939, had become the most well-trained, modern, and experienced air force in the world.
The result? It took just six weeks for the German military to make it to Paris. The Nazis went easily around and over the "impenetrable" Maginot Line. The Luftwaffe deployed more than 5,000 combat aircraft to support this invasion.
Policymakers, insiders and experts who thought that the future was just a linear, incremental extension of the past, dismissed evidence of a technology disruption (aviation) and made choices for the future based on mainstream notions from the past–with massive implications for Europe and the world for generations to come.
History is littered with examples of government policies that stopped innovation and prevented industries from developing locally, causing their own citizens to become poorer and their countries to decline.
In 1865, the United Kingdom's Parliament passed the Red Flag Act, which required that “self-propelled vehicles,” which included automobiles, employ a crew of three people: two onboard and a man with a red flag who had to walk at least 60 yards (55 metres) ahead of the vehicle. The speed limit of these vehicles was set at 4 miles per hour in the country and 2 miles per hour in the cities. This regulation was the result of successful lobbying by the unlikely coalition of the locomotive industry and the old horse-drawn coach and carriage industry. The government effectively stopped innovation in the incipient automotive industry for 25 years. The Locomotive Act of 1896 repealed many of the provisions of the Red Flag Act, finally allowing the development of the automotive industry.
But it was too late. The United Kingdom, birthplace of the Industrial Revolution, did not benefit from one of the biggest spinoffs of that revolution: the automobile.
The United States, then an emerging economy, went on to become the 20th century’s economic and military superpower, based in part on the strength of its auto industry.
By the 1950s, the U.S. auto industry had produced more vehicles than the rest of the world combined. In 1960, automotive was America’s largest industry, employing directly or indirectly one of every six working Americans. During World War II, Ford alone built 6,790 B24 bombers, 282,354 jeeps and 42,676 army/navy cargo trucks.
By preventing innovation and technology disruptions, policymakers in France and the United Kingdom only ensured that the upside of building new industries would accrue to other countries, while denying and postponing the inevitable costs of the disruptions. These lessons are as important today as they were then.
The founders of RethinkX met at a military think tank meeting to discuss the potential geopolitical implications of the disruption of energy and transportation. There, top mainstream analysts discussed the linear, incremental progress that solar, batteries and electric vehicles were making and how the transition would take decades.
We shared a different viewpoint – this is not an energy transition but a technology disruption.
Technology disruptions are not linear progressions. They are dynamic and systemic. They may take a while to build up, but when they reach a tipping point, they move in exponential S-curves and trigger feedback loops–both positive and negative.
Yet mainstream analysts kept making mistakes in providing an incomplete picture to policymakers and decision-makers—the same mistakes that caused the French and British policymakers to fail to anticipate the implication of technology disruptions. And failure to foresee disruption leads to decisions based on flawed scenarios, which can become self-fulfilling prophesies, locking society into a high-cost, uncompetitive future.
Our conversation moved from transportation and energy to food, health care, finance, housing and education. We agreed that these sectors were on the cusp of being disrupted but there was no one providing a full picture of how these disruptions were going to evolve, their implications and the choices that society would have to make going forward.
The founders' conversation, we had laid out the conceptual underpinnings of what would become RethinkX.
There are some hugely beneficial aspects of disruption, including lower costs and broader availability of goods and services, from transport to energy to healthcare to food. This could help solve some of the world’s largest problems, including poverty, inequality and climate change.
But there are also adverse consequences that need to be acknowledged and mitigated. These include job losses and changing workforce needs, as well as value destruction for pensions and investment funds that don’t adapt in time.
RethinkX is an independent think tank that analyzes and forecasts the speed and scale of technology-driven disruption and its implications across society. We produce compelling, impartial, data-driven analyses that identify pivotal choices to be made by investors, businesses, policymakers and civic leaders.
Rethinking Transportation is the first in a series that analyzes the impacts of technology-driven disruption, sector by sector, across the economy.
RethinkX’s follow-on analyses will consider the cascading and interdependent effects of disruption within and across sectors. Our aim is to facilitate a global conversation about the threats and opportunities of technology-driven disruption and to focus attention on choices that can help lead to a more equitable, healthy, resilient and stable society.
We invite you to be part our community of thought leaders and experts to better inform this conversation.
Join us.