We often talk about how advancements in technology lead to increased productivity which of course must manifest back into the land price.
Humans are wired to direct their energy and labour to the most productive purpose continually striving to create or obtain more by doing less.
Currently we are seeing the initial growth in the autonomous transportations sector. For many this just seems too far fetched. They just can’t see the possibilities. Many science fiction films from the 1950s depicted humans fancifully sending rockets to the moon, something that took until the 1969 Apollo 11 mission to achieve.
The rapid growth in the autonomous transportation sector will profoundly impact human productivity much sooner than we expect.
Rio Tinto is a step closer to automating its 1700 Kilometre Pilbara train fleet after they recently overcame another hurdle being granted a world-first approval by the regulator. See like many autonomous car operations, Rio Tinto’s giant autonomous trains have completed more than three million kilometres in autonomous mode – they have just had a driver on board in case of an emergency.
“Once commissioned, the network will be the world’s first heavy haul, long distance autonomous rail operation, unlocking significant safety and productivity benefits for the business,” Rio Tinto said and its due for completion by the end of 2018.
With the operation of about 200 trains, the impact is sure to be real and meaningful. Remember such advancements will mean that Rio will be more productive as it will be more profitable to mine ore at either lower prices or lower grades.
But this is just the beginning.
Land is the ultimate asset as there is no substitute.
Many people look towards the current Tech Billionaires and the natural advantage their superior technology affords them. But the problem with technology, unlike land, is that it can quickly become redundant as further technological improvements occur.
At Calnan Flack we have spoken about the great technological advantage that first movers in autonomous vehicles will gain. However, this advantage could be very short lived due to the speed of the current relentless technological gains we are seeing.
Unlike land, the autonomous motor vehicle is likely to go the way of the “Dodo” before it even penetrates mainstream society. See Uber is already talking about autonomous flying cars by 2020 and this is likely to create a more profound impact on society than automated cars.
With flying cars there is the continuing diminishing barrier of technology coupled with the immutable barrier that will be created by Government Granted Licenses.
Whoever wants to fly their vehicles around our cities will require the Government Granted Right to use the Air Space.
Own the “Air Rights” and you will control the “Autonomous Flying Cars” industry – and probably the “Drone Delivery” industry as well.
Think Telstra, Vodaphone and Optus here.
And what about the landlords that own the locations of these new “Sky Ports” where these autonomous flying cars will land and take off. Just like those who own the government granted airport licenses, you can see this locational value capitalising back into the landlords’ buildings.
This is just the infancy of this industry. Autonomous Trains, Cars, then Flying Cars.
It’s not too hard to extend your imagination to envisage automated mining technology being used deep in space. Further, one could see how that 1969 act of Neil Armstrong and Buzz Aldrin driving the American flag into the dusty crust of the moon will likely form part of the legal argument as to America’s ownership of the moon and more correctly “their” minerals that reside within it.
Just like Donald, I’m sure that the US as a nation, has the prerogative of changing its mind – which is likely to include what they think constitutes their 51st state…