Paul Higgins is an experienced foresight consultant whose business is geared towards identifying those organisations that want to get on with doing things that will accelerate our path to our 100 year future. He explains his latest interesting work tool, Wardley Mapping, his upcoming book on driverless cars and how through venture philanthropy he is trying to create an innovative ecosystem that drives a new not-for-profit sector.
Interviewed by: Peter Hayward
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AUDIO TRANSCRIPT
Peter Hayward
Hello and welcome to futurepod. I'm Peter Hayward. The futures and foresight community comprises a remarkable and diverse group of individuals who span academic, commercial and social interests. At futurepod, we seek to honour and learn from the wisdom of those who have established and developed our field, to connect and support the practice of those who work in this space, and, most importantly, to give pathways and inspiration to those who wish to join us in creating humane and better futures for ourselves and those who come after us. Paul Higgins is a futurist and strategist with Emergent Futures. He holds a first class honours degree in Veterinary Science, a Bachelor of animal science, and a Master's degree in Strategic Foresight. He has been president of Victorian country labor for five years, and chairman of the pork industry national board for a decade. He has also been a director on Auspork for 16 years, and he served on a number of nonprofit boards. Paul has lectured at Victoria University, on the disruptive effects of web technologies, and Swinburne on foresight practice. Paul is a venture philanthropy partner at social ventures partners Melbourne. He's also chair of the policy and research advisory board for the future Business Council. Paul writes and presents regularly on future disruptions to business models, and consults to a range of organisations on how to think about and plan for the future. He is currently co authoring a book on the future of driverless vehicles. Welcome to futurepod, Paul.
Paul Higgins
Thanks Peter. Great to be here.
Peter Hayward
Good. I'm glad you gave us the time. Question one, we start with Paul his firm, our guest to tell us the story of how how they became a member of the future and foresight community. So how did you?
Paul Higgins
Well, there's a really short story, and there's a really long story (PeterI'd like the long one Paul) I'll do the short one first because it will not take up much time. So I did the Williamson leadership program here in Victoria, a year long program in 1997. And they had this newsletter, which comes out afterwards to all the alumni. And one of those editions had in it that the master's program was starting at Swinburne and I made a decision in six seconds, that I was going to do that program, which is actually true, I did that. I spent the next six weeks justifying it logically and analyzing it, but I'd already made the decision anyway. So that's the short story. The long story probably starts at the dinner table with my parents. So very much our ethos was, you know, you'd better have an opinion when you come to the dinner table about what was going on in the world. So my father, probably more than my mother was very big on, you know, you should be interested in talking about these things. And the second part of that was woebetide if you came to the table with an opinion but without the ability to back it up. So from a very young age, we're always sort of engaged in what are the big ideas, where's the country heading? We came here from England, because my father felt that England wasn't really going anywhere and wanted new and different opportunities. In fact, he told my mother when they met at 17, that no matter what happened, he was going to Australia or Canada. And she thought and says this, yes sure he will but a couple of kids and he will settle down and it won't matter anymore. And here we are. So that that's basically where it started. So I've had an abiding interest in those things. And even now, a view I can recount our last two Christmas dinner table discussions. One not instigated by me was the adoption pathway and timing on driverless cars as a transport. And the other one was the future of work for my stepchildren and nephews and nieces again not instigated by me, so always been part of my life. And that's the reason the six second conversation..... six second decision happened because of all that sort of background. That's basically how I came to do it went and did the master's degree and had been working in the field ever since?
Peter Hayward
Yeah, I mean, did you continue to dialogue with the data around this around the things that you were actually discussing in the classroom
Paul Higgins
I'll still do. So it's his 80th birthday this week. That's a good job I reminded myself myself. It's actually tomorrow. And we still have those conversations, applies to my brothers. And now it's applying to the kids as well. So it's an intergenerational thing. And I always remember something Richard slaughter said to me, when I first started, I do recall, you're in the same year, obviously, I arrived a little bit late,so the program had already started. But Richard said to me, after you've been here for kind of the time four or six weeks, you will find you are feeling like you're drowning in knowledge, not in reality. And he was right, it was such a broad and encompassing program that you had to sort of find your way. And he said that he said, You have to find the bits in it, which sort of resonate for you and work for you and, and find your own path through that. It's not a sort of cookie cutter approach to everyone doing the same things.
Peter Hayward
When you're sort of finding your way into the field where they obviously Richard was part of it with other people who you'd look back and they somehow supported your encourage you or gave you encouragement or support to actually continue.
Paul Higgins
I guess the main one was Richard Hames. So Richard came and taught at the program. And then I got involved, he asked me to get involved in a project he was doing with land and water Australia, that was happening during the actual master's program, because of some of my background around that sort of agricultural sector, etc. And so both that process and some of his writing was one of the early, early influences on the thinking about what I wanted to do and how I want to do it.
Peter Hayward
And you also started The Tumbleblog, I would say fairly early in the process of starting your practice to do and maybe just talk a little bit about how that the role that played in the kind of in your sort of practice development
Paul Higgins
It wasn't really more wasn't really a practice development thing. It was more a marketing thing than anything else. So I had this basic theory that says, a very simple marketing person, I used to bring marketing ideas to those boards, you talked about in the introduction, and they'd sort of pat me on the head and tell me to go away. But there's really just two factors. One is, Here I am, Here I am, Here I am, here I am. So just putting stuff out on a continual basis, so that when someone comes to make a decision that they want to do something, they sort of have me in their mind. And the second part is just allowing the customer to choose their channel. So we will put stuff out through a newsletter, which we still do, but has really stayed very static, whereas the other social media stuff we do has grown. So you can access through a blog, through Twitter through Tumblr, the tumbler has changed a bit over time, it was a much more visual medium than some of the others. So again, it's sort of suited to have a different channel that had different appeal to different people. We still use it, although Tumblr itself I think, has become a bit of a problematic space. We still have quarter million followers on this so reluctant to, to wander away from it. Now I recommend it to people in the field when they want to just yeah, follow other bloggers around futures. I
Peter Hayward
always point them to that, if they will, that's a good starting point.
Paul Higgins
Yeah, it's more sort of throws now sort of just sort of examples of sort of things we're scanning. And we probably spend less time on it than we used to. It's more just sort of posting stuff, the different sort of channels in the process. But we also use as a back end process. So we have a subcontractor system with an organisation in India, which does some stuff for us. And they actually construct our newsletter from the posts. So I do the posting bit, and then they via a sort of STEEP matrix process, construct the links we send every couple of weeks to our newsletter list. (Peter:Thank you)
Peter Hayward
So Paul, second question. I like the guest to talk about something that's over a foresight technical nature. So what is it you'd like to talk about?
Paul Higgins
We use a range of tools. But the the one I'm sort of most interested in excited about recently is a thing called Wardley mapping. That's a technique which was developed by a guy called Simon Wardley. In the UK. He works at the Leading Edge Foundation, he has developed this method and actually shares it freely. So if anybody's interested in listening to this, they can actually go and have a look, as he says he gets paid enough doing what he does and doesn't need to build a business around the rest. And essentially, it's it's a way of mapping the landscape. And what what Simon Wardley says is, you know, if you go back and fight a battle in the Battle of Thermopylae, or whatever it is, would you use a map or would you use a SWOT analysis, etc. So, it it really is a map that says position and movement matters. And so, if you think about a piece of paper, the top of the piece of paper on the left hand side visibility to the customer. And the bottom is invisibility, so it's not visible to the customer. And the bottom axis is, sort of an arc of change. So what it says is that people go, or ideas go from Genesis or the novel idea to custom built, you know, people hacking stuff together to product. You know, this, we're industrialized sort of things to utilities. And that sounds like a technology description. And it partly is. But it also is one of practice, the way we do things, methodologies, as well as the technologies. And what you do is you map all the components that are actually producing a value proposition for a customer, and all the sub components that are required to make those components work. And then you place them on the map where they are relative to those two points. And Simon would say a map has five characteristics. It has to be contextual. So it has to be a map of something Philip Island if you are trying to get around Phillip Island, it has to be visual, it has to have an anchor, and in this case, instead of a compass, you've got the customer value proposition, it has to have a capacity for position. So positional stuff, and it has to have a capacity for movement when movement matters. And so what you do is you you essentially map out the existing landscape. So it's useful in itself, because most people don't go to that trouble. And then you go, generally everything moves towards the right. So a novel idea becomes a custom built thing becomes a product becomes a utility or a service. So if you think about, say computing, computing went from the early ideas and say Charles Babbage and Ada Lovelace, in the 1850s, to custom built models, and you can talk about different stages. But if you look at say the PC, you've got the homebrew clubs of the 60s and 70s, with Gordon French, to an industrialised product model of Dell, or IBM, or whatever, to now were there is computing as a service, you can plug in and you don't need the server or the computer in the first place. So that's the general idea. And then what you do is you start thinking about, what are the changes, I've got, say, 50 components on this map, which of them might be moving more rapidly to the right than something else? And what does that mean to the practice or methodologies that happened around that change, and particularly that point where you move from product to utility. So if you think about a product, you can get product substitution. Now let's talk about cars. So you can go from fossil fuel cars to electric cars, you get a product substitution, it's still a car, still got wheels, it's still a personal ownership model. It's it changes the energy supply system, but it doesn't change much else of parking models, or whenever you move to a utility where say, driverless cars. Yeah, they're providing a service, it changes lots of things, because it turns over design, parking models, airport parking, travel, government taxes, local government income, transport, shopping, food delivery, there's a whole range of things. So when you get those sort of substitutions which move to a utility, you get massive change in the environment. And so mapping that out and thinking about what that looks like, what might change, starts a conversation between the people involved about where are these things on this axis? And there's no exact right or wrong, it's about having that conversation, but also saying, What if this happens, what if that happens? Now? What are the emerging signs of change that we can use to determine to our best surety in these systems, but to the best of our capability? What's the changes can look like? And how do we actually produce a strategy built around that?
Peter Hayward
You certainly imagine it'd be tremendous organisational vulnerabilities in a shift from product to utility if your business was in people just buying the products. And at the same time, there'd be tremendous opportunity for competitors to emerge who say, I don't even need the product, I can actually I can actually create my business idea actually have the utility.
Paul Higgins
And yeah, you got examples like Amazon in the last little place, Netflix versus blockbuster, those sort of things. But also new businesses can build without any legacy issues, because they've decided to go down the utility path. And so you got the the older businesses in a competitive position where they got all this capital, infrastructure, ways of rewarding people, the KPIs, the promotion systems, all of those things are bound up in the old way of doing things. And so you can get real disruption when that happens. A bit like like when sort of, you know, mobile became big thing. So companies that actually started just as a mobile company can have a distinct advantage over an older company which is trying to bolt sort of mobile onto what they already do.
Peter Hayward
So my question to you is, as a tool that sounds fascinating, what does it really offer? A person coming from the futures or, or foresight discipline? What's this kind of what's the actual additional value added, you see in, in bringing this idea into your practice,
Paul Higgins
it probably goes back to some of the original reason I wanted to do the master's degree in the first place. So I come from a background of scientific rational approaches. My father has a PhD in metallurgy, I have a brother who is an engineer I trained in veterinary science, did a research degree. So I've always had a very rational, analytical bent, I feel like the master's degree itself added another part of me or another part of the social and philosophical, political sort of stuff. So I sort of try and marry those two together. What the wardley mapping does is provide a structured tool that I really like that allows people to have those conversations. So defining where it is in the map is almost irrelevant sometimes. it's actually the fact that you and I have a disagreement about where it should be, and the underlying reasons and drivers for that. And when you talk about the shifts, you start talking about those underlying drivers and logics as well. And it's not just about technology or things. It's about how people organise themselves, how social systems work, what will the political implications be, you know, the people try and build a defensive position over this through political regulation processes, what's the social acceptance of this new way of doing things. There's a whole range of things which tie into the discussions about a look at stuff. And the best parts of it. are those conversations where you actually use that as the basis for starting off? The next stage its not the map itself.
Peter Hayward
Thanks, Paul. So Paul, as you sensemake, what's going on around us? What are the emerging futures that you sense are coming or starting to arise, and particularly the ones that excite you or interest you?
Paul Higgins
I think that the best example I can use is we're running a, the start of a project at the moment with a future Business Council, which is called vision 2029. And what that essentially is about is, if you go forward, I had this conversation with the CEO the other day, we go forward 100 years, which is impractical from the point of view of strategy a lot of the time, but if you think about Australian 100 years, you can clearly say that we'll be almost 100% renewable energy, we will be, have significantly changed industries, that the structure of what we do will include probably vastly improved resource utilisation in terms of closed loop manufacturing or other things like this? So the conversation is, okay, that's, no one would argue with that. But if you look at the current politics, everyone wants to argue over coal and renewable and whatever. And so the question we're asking ourselves in this project is, how much better can Australia be in 2029? If we accelerate our path towards that 100 year future, and doesn't mean achieving it, you know, in 10 years instead of 100 years, but how much better would we be if we can accelerate that process. And the best advice someone gave me early on was, it's the best way to actually have those discussions is to is to move the point of discussion beyond people's current strategic plans. So someone's got a five year strategic plan, let's talk about a seven year future. Because if you come back to a five year future, and they just settled their plans six weeks ago, they don't want to refight those sort of turf battles. So let me give you an example, about what we're trying to do. Ross Garnaut, who many people would be familiar with has been doing some work recently saying that he believes that Australia can be an energy superpower of the 21st century. And that energy will be renewable, not fossil fuels. So we have had these sort of massive resources in terms of minerals and things like that, but and gas obviously, it's been developed recently. But we have, according to Ross, the largest amount of renewable energy capacity in the developed world, per capita. And we have a competitive position against the emerging economies that says we're much more stable in a political sense of investment framework sense etc. So can we build industries that have energy in them as an export, not export the actual energy, but for example, can we make steel products can we make aluminium that essentially are exported energy because they take so much energy and transform them. And the example of that is what say Sanjay Gupta's is trying to do with the Whyalla steel mills now in South Australia, about building renewable energy systems, pumped hydro systems, battery storage systems and actually powering a steel mill completely with renewable energy to get away from all of those sort of things. So that's one aspect of it. We're having a similar look at the transport sector, having a similar look at sort of closed manufacturing, bringing together a consortium that will be working on this together. And with a future Business Council. So I quite often say to people around the place and at the Council itself, that we are the future Business Council, not the future Environmental Council. So we see things through the lens of what is a sustainable model has to be sustainable environmentally to be sustainable, economically anyway. But unless it's sustainable, economically, it doesn't work either. So what we're looking at is, let's paint a picture of that future its 10 years away, 11 years, right? 10 years, by the time we produce it, identify the roadblocks regulatory hurdles, etc, that are stopping us maximizing our capacity by that 2029 period. A lot of those things, I think, are regulatory. And I'm a big believer in what we've seen, for example, in solar power in the last decade, which is, if you can produce an economic business model that works, then people would adopt far faster the changes, than you'd be trying to say you need to do this, because it's the right thing, or guilt people into doing it, etc. So the massive expansion we've seen in renewable energy in the last five years is because it's an economic model, it's not because of anything else. I was talking to one of the directors of one of the water companies here in Victoria a couple of weeks ago, in Tasmania, funnily enough, but they just signed a contract with the new solar farming in Kerang for four and a half cents per kilowatt hour. Now, once you get to those numbers, (Peter: now, coals not gonna deal with that is it) it starts becoming a no brainer. So those are the things that are sort of excited me, I guess. And we're trying to look at the same thing from a transport point of view with electric vehicles. So as you mentioned, in the beginning of the whole podcast, I'm writing a book about driverless cars. But we've actually changed a little bit in the last little while, because it was getting too big. I had this view that business books are way too big in the first place and started to writet one, which was too big myself. And electric cars are becoming too big a part of that. So I've actually pulled that out. And we're sort of publish that as a prequel. And the thing that applies to this sort of vision 2029 I was talking about is that once electric cars get to the point of being fossil fuel, price equivalent, so you can buy the same car, as a fossil electric vehicle as you can, a fossil fuel car, and numbers are that they're about $1500 a year less to run. So then that becomes an absolute economic model. And interesting enough, you know, think about that 15 $100 that's either fuel, or maintenace. And most of that money flows out of Australia. So we had a million electric cars on the road next week, that would actually probably keep close to a billion dollars of money, which is currently flowing overseas in the Australian economy. So I see that as a thats the thing if you can get that economic incentive in place, and I'm not about subsidy, I'm just talking about the actual change, then people's adoption rates will become quite rapid. And that has both an effect on carbon emissions, but also on people's bottom line, and how much discretionary spending they've got to spend in in their economy. So those are the sort of models that excite me or sort of involved in trying to work on with the future Business Council. And have you think about electricity or energy, generally, we think about cars, we're in the middle of a one in 100, yr 200. yr , transformation of energy to start with and vehicles secondary. And you don't get too many one in a 100 to 200 yr changes in your lifetime. I think so there should be things people get excited about.
Peter Hayward
I've got to ask, given your certainly political background, certainly with country Labor around the notion because what you're talking about there is that part of the community and the business community being well ahead of the political agenda being being actually well if you like, being actually more prepared to think outside the box and the political system seemingly unable. How do you sort of sense make how that tension between a lagging political conversation and a leading business or community conversation playing out
Paul Higgins
it's really interesting. I mean, before the, you know, the policy around the National Energy Market was abandoned by the government a few weeks ago. You hear stories The business was actually in Canberra begging. And I mean, literally begging the government to agree to it. So you have this sort of theoretical party of business, being begged by business to do something and then abandoning it. totally weird. And we had this discussion, around a members dinner the other day future Business Council about the balance between well if politicians are going to be like this, you just got to get out and do what other stuff and just forget about them. But a very strong view that if you do that, you only get part of the effort. So you can say, you know, solar farms are being installed. And you can say, how the Moreland Energy Foundation in here in Melbourne is doing various things, and they're getting investment. And that's true, that's absolutely true. But it's only a portion of what can be done, if we can unlock things. So I've just recently talked to a major investment bank as part of their off site program about thinking about the future, literally saying, we are actually holding our money out of the sector, because we can't really figure out a business model and an investment framework around this sort of risk. And when that happens, you know, you get less investment, you just get less stuff happening. So I think they can go and do stuff themselves. And that's clearly happening in in the wider economy. But if we can get the regulatory and political part right, then I think we can get a lot more investment in these things. And the change can happen more rapidly. So that's, that's my view about the overall process, how you resolve it in the current political climate, I have absolutely no idea.
Peter Hayward
So Paul, given that analysis, I want you to just talk about your future in terms of as a kind of citizen of Australia kind of thing. How do you act in relation to the emerging future just as a, as a human being?
Paul Higgins
Interesting question, I remember having a conversation probably around politics 15 or 20 years ago, some good friends of mine, who were saying, Why are you getting involved? I ran for federal pre-selection for the Labour Party, you know, Why get involved in this rubbish? It's, you know, that sort of conversation? My responses were twofold. One was, you know, if the right people, (being a bit egotistical), but if the right people don't get involved, if the good people abandon that process, then it becomes less. And secondly, we had a conversation about why they wouldn't work, why are they saying those things. And I figured out in the end that they were, these were people involved on their parent Teachers Association, the local Sporting Club, their local community, other staff, etc. So they weren't, they weren't disengaged citizens, they'd basically decided all this other stuff was never going to go anywhere and they were shrinking themselves, their actions back to what they could control, and where they could see they could contribute. I see those things that I guess it three, three points, where I try and make some sort of contribution. One is that involvement with the Future Business Council already talked about. So how do you create that vision or those messages and stuff that can impact a much wider audience, then I have a role in the venture capital stuff around philanthropy in Melbourne, I joined the Social Venture Partners in Melbourne to invest in innovative not for profits, because I'd been banging around the not for profit sector for quite a while. And I finally decided I had better put my time and my money into it, rather than just talking about it. So I do that. And we, my philosophy of that is we're actually trying to produce an innovative ecosystem there that will actually disrupt the not for profit sector. So over a 10 year period, it will actually change the way stuff is done. That's ambitious, and it might not get there, but trying to actually do stuff in the real world. And the last one is really around the for site work that I do with clients. So I have a set of questions that I ask clients about whether I'm happy to work for them or not. It's actually funny sometimes because they expect you to come as a sort of a mendicant, you know, begging for work. And when you actually tell them now, you've got to convince me It sort of changes the relationship. But one of those questions is, am I leveraging my skills to help others make a contribution to their community, and I mean, community in that sense, not 100% of our work fits those rules, but a large percentage of it does. So I try. And we try and reject people, rather than sort of just chase work. I have a rule that I reject around 30% of work that comes my way and try and work with organisations that are trying to do stuff that changes stuff. So I do, I'm doing the same things as those people I talked about before, trying to take action at the various levels and trying to make some sort of contribution to that change. There's a guy called Saul Kaplan, who I know in the US, I quite often go to a conference he runs .He calls that community because it is a community, not a conference. He said something to me one day I've always remembered which is He said I spent 20 years on the road as a consultant, trying to produce a better presentation or a better slide deck and more facts on the basis of that would change people. But he said, I've decided to forget about that have abandoned that, only now. Now all I do is preach to the choir. So he actually seeks out people who want to change stuff, tries to help them rather than change the rest of what's happening. So I try and do that a bit. If I talk to clients about my keynote presentations at conferences, I actually say, I'm aiming at the 30% of the room will actually go and do something that may upset 20% of the people in the room because they don't want to hear it. But that's what I try and do because I'm, I'm always trying to influence people to go actually do stuff in the real world.
Peter Hayward
So Paul, fourth question is, how do you talk to people who haven't heard of foresight or don't know what it is you do? How do you broach the subject and explain what it is you do?
Paul Higgins
One thing I do at conferences, things put up a thing. Yeah, there's these memes around Yeah, what I do for a living, there's quite a few of those. And there's a futurist one, which I use quite a lot. Because it provokes a bit of humor. So there's a picture of a fairground fortune teller and crystal ball, and that sort of things. My my youngest niece, heard artists, rather than futurists, so she saw thinks I'm an artist, and she's seen some of my artwork. And she's flabbergasted as to how I can make a living. But the reason I put the picture up is the last picture is a jigsaw puzzle with a few pieces missing. And what I say to people is, I help people think about what the future might look like with the caveat that it is not complete, and it will not be right. So if anybody I say to anybody come and say we'd like a 10 year vision of what the banking industry looks like, or the airline industry or whatever it might be. I say that's a great thing to do as long as you do at some depth, but I'll guarantee you only one thing and that is it will be wrong, because of the complexity of the space. So that's why I sort of try and approach it with larger groups. On a one on one basis, I just say to people, I help people think about the future differently. So they can make better decisions today. So that's a sort of a tagline for the business in a sense, but it's really about that, for me, it's about saying, how are we doing that and turning it into concrete action that allows organisations to see opportunities they otherwise hadn't seen, to identify unintended consequences, they otherwise hadn't seen, and to identify risks that they hadn't already seen. And to have that conversation set at some depth. So earlier on, I talked about the question I asked, I asked clients, the other questions center a little bit around, are we're going to push the thinking, you know, we're going to enjoy ourselves are two of my other questions. And so I really like working with people who are....And the great thing about my job is I get to be in rooms and organisations of really smart people trying to think about how to do things differently. And I quite often say it's like being a lead singer of a rock and roll band or captain, of the Australian cricket team, you do it for nothing, and people pay for it. So why wouldn't you do that? So it goes all the way back to that story about my father and the dinner table. A like being engaged by smart people who are trying to do the right thing by their communities.
Peter Hayward
Okay, cool. So the last one you introduced early that the book you're co-writing on driverless cars, which was getting a bit large. Maybe do you want to talk a bit about the book or about the concept, the driverless car transformation process.
Paul Higgins
So I'm co writing a book with Chris Rice another futurist from the US. And essentially, it's about a transformation from the personal ownership model of cars that have dominated the landscape for the last, pick a number..... 120 years to one as transport as a service. So a future where basically most of us will not own a car, that our personal assistants, phones, whatever they may look like, we'll have our diaries that know the traffic now all this sort of things, and a car will just come and pick us up when we've got to be because knows what time we're supposed to be to record a podcast in the evening. I'm interested in it as a general thing. Secondly, I'm interested because I think it has such a transformative power across what's happening in our economies. So if you think about .... I will give you an example, We think that people can get their cost of personal mobility in a motor vehicle or passenger vehicle, (there are other issues), but down to somewhere around 30% of the current cost. So average person in Australia, they've got a car, it cost them around $10,000 a year. They don't think it does. But I'llby the time you work out finance and depreciation and all those things. Even if we're only partially right, and that number is 50%. If you think about an economy like Bendigo, if you could take 50,000 cars out of Bendigo, and replace them with a service. And each person who I'm one of those cars says $5,000 thats $250 million, which actually ends up back in the Bendigo economy, just a regional town. Now, from Australia's point of view, most of those costs go overseas, because most of them are in the car you buy, and the fuel that you buy currently. So most of that flows out outside. So it's actually a transformation, which I think can actually revitalise the whole economy in a sense. But it's also going to change things like urban design, with huge amounts of parking space, our cars spend 94% of their time sitting around as a huge asset. And one of the interesting things that's come out of it is that we think the actual running costs, so the running costs of the driverless car, at the margins or marginal costs. So let's say a driverless car picks you up, drops you off, and doesn't have another fare to go and pick up in the next two hours. It's marginal cost, in our view is three cents a kilometer That provides all sorts of possibilities about business models that people can build on top of that, if the cost during low demand times is really, really low. So transport for people with disabilities, business models of shopping of short term tourism of a whole range of things, things we can't even imagine right now. And the transformation actually transforms all of car manufacturing. There's a company in California at the moment called Tesloop. They have some Tesla's electric cars, they did an interesting thing where they managed to trick Tesla in a way in that when Tesla first started selling electric cars, they gave customers free electricity, as long as they charged that their superchargers on the highway . Theory that most people wouldn't be there. Tesloop built a model of luxury chauffeured, chauffeured and non chauffeured transfers between Las Vegas, Los Angeles, San Diego, I think. And so 98% of their driving was on highways. And so they've had free energy from Tesla for the last three years. But the other interesting thing is, they just they publish all of their maintenance logs. They have a car, which is just ticked over 400,000 miles. (Wow), another one which has just ticked over 300,000 miles, and we've picked apart some of this stuff. And they do ignore things like you know, seat replacements and other stuff, but include drive train replacements, things, the average cost of that those vehicles over that time period has been 1.73 Australian cents per kilometer. If you go to RACV or RACQ figures, the average maintenance cost is somewhere around eight or nine cents, so you get these huge reductions and huge improvements. And if a vehicle is driving that far, and they say they're going to take it to 800,000 miles, it changes the manufacturing system, because now you have a thing that says if the car costs twice as much, but it's used 40xas much, we can produce a much better vehicle, we have closed loop manufacturing, we can do a whole range of things we couldn't do before. So it fascinates me and I tend to bang on about a little bit too much. But I think it has this capacity to really change what we look like in terms of particularly urban design, which has been dominated by traffic, less less here in Australia than say America, but still significant. And if I can give you an example, we talked about to a client just a couple weeks ago, Oxbotica in the United Kingdom, plus Ocado, which is the sort of automatic warehouse system people, are trialing a system where they put a warehouse for food inside a geographic area that where the actual customers for that food are more than a mile from the warehouse, and they're bringing back electric floats like the milk floats they used to have, that will deliver that food as a driverless system. But their vision goes beyond that. It says that we have driverless vehicles, we can take all of the parking away or and we can run those floats along the line that used to be parking, but maybe people will just get their dry goods and they're non-perishables delivered with the automated system. And we will build coffee shops florists, fishmongers around the warehouse to become a new urban center. And because everyone's only a mile from it, we can actually have a shorter scale system because the driverless car/floats will be much cheaper. So the actual delivery cost is low, the automation of the delivery system can produce a system, we don't need these massive warehouses. And we can completely redesign the urban experience and urban community systems back around a new system. Which sort of mirrors the old sort of community stuff for strip malls or stuff like that, but actually is built in a totally different way. And I think some of those things are really exciting, because in the end, the technology is just shiny bits of stuff. And it's, you know, what people do with it, and what it means in people's lives and how they live those lives, their economic circumstances, etc. that really matters.
Peter Hayward
It sounds to me like, what I'm hearing you see in this technology change, is that actually liberating us and communities to actually achieve some of the futures that they have been trying to have been articulating for quite a long time. But technology has almost existing products using your, your mapping model, simply say, Well, you can't do it that way because of this product.
Paul Higgins
And so to some extent, I think, you know, you go back to that sort of conspiracy theory about, you know, big oil or cars killed the electric car, and I think that's mostly rubbish. The technology's never been at that point to create some of this stuff. So you need the advancements to get past that, I don't think there's been that much blockage by the existing model. But the existing product model of ownership of vehicles, has certainly define huge swathes of our landscapes our economies and those sort of things. And I think about examples, like my parents, I think I said before my father's eightieth birthday tomorrow, you know, this month, both my mother and father are both in good health still and driving, etc. But they'll reach a point in the not too distant future where that's actually a bad idea. And just the capacity for them to still get around in a relatively low cost manner, in their current environment, where they can still live at home and all those sorts of things. Yeah, that's just a massive community good just by itself.
Peter Hayward
Well, thanks. Thanks for coming along and talking to the future pod people. Paul and I have really enjoyed our time. This has been another production from future pod. Future pod is a not for profit venture. We exist through the generosity of our supporters. If you would like to support your tripod, go to the Patreon link on our website. Thank you for listening. Remember to follow us on Instagram and Facebook. This is Peter Hayward saying goodbye for now.