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Evolution of cars and society, what does foresight tell us?

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Author: Manu Steens

In this post I share my own opinion. Not that of any organization.

The evolution of transport in the west can partly be outlined with ‘PEST’. PEST is a mnemonic that helps to map the environment of an organization or society. It stands for ‘Political’, ‘Economic’, ‘Social’ and ‘Technological’.

‘P’: There is a strong call for electric cars and it is not yet clear whether the technical evolution will fully evolve towards only fully electric cars and other vehicles or not.

‘E’: the question is whether, once the electric car breaks through as a standard means of transport, the insurances, partly due to technical evolution, have a clear picture. There is a debate about who will be to blame for damage. One of the occupants, or one of the automotive companies that took care of the software development…

‘S’. Common use (car-sharing), which has long been promoted for classic internal combustion engine vehicles, will continue to apply to electric vehicles. This will need continued political support to become more successful. People don’t all like to share a car. As the livelihood increases, this is an option for more and more people.

‘T’: The ‘Society for Automotive Engineers’ created an evolution towards autonomy in 5 discrete steps. Here’s how they did it:

  1. First there was the ‘driver assist’ (also known as cruise control)
  2. Afterwards ‘partial control ‘, (known as lane control)
  3. Then comes ‘highly automated’ (limited vehicle control)
  4. The fourth step is ‘fully automated / driver override’ (default vehicle control)
  5. To get to ‘fully automated’ (complete vehicle control).

Cars today have level 1 and 2 and some vehicles use level 3 like a certain brand with its ‘autopilot feature’.

Here, in this situation, eight possible futures arise, depending on the following three uncertainties:

  • Does the electric car break through completely or not? In the latter case, the classic combustion engine will again play a more important role than expected, or the market will shift towards hydrogen gas as a fuel.
  • Is car sharing breaking through or not? In the latter case, man is too attached to owning his own car.
  • Will there come a period in which the technology succeeds in providing sufficient certainty to people with a fully automated vehicle (level 5) or not?

In this article I want to look at the consequences of the future with ‘yes’ to all three uncertainties in 15 to 20 years:

  • Pure electric cars are the standard.
  • Car sharing is becoming the main mode of personal transport.
  • ‘Fully automated’ completely breaks through with cars.

What does this possible future mean for people and society? Thinking through PEST provides the following possibilities:

Politics

  • Power plants will have to become ecological, because the defense of fossil power plants will become incomprehensible in the eyes of future generations. This is due to the great need for electricity.
  • Politicians will demand a major say in technological development in terms of cyber security for cars.
  • Ambiguity of liability in the event of damage must be decided politically. Possibilities in the legislation must be investigated. This differs for the vehicles depending on their technically automated level.
  • Electric classic cars will not have a number of advantages in terms of insurance due to a lower level of safety in automation. This requires a political decision with changes in traffic legislation. If necessary, they will be banned.
  • Police can conduct multiple types of investigation on any vehicle. This requires legal protection of the owner. (route, location, times of use,…) .
  • By sharing cars for short distances, public transport will be more attractive for longer distances.
  • As state revenues from cars fall, other excise duties and taxes go up.

Economic

  • Fewer impulse purchases of snacks and soft drinks by drivers in those gas station stores that survive the switch with charging stations. Many products will have to reinvent their outlets, or they will suffer potential loss of sales.
  • Less shelf length for soft drinks and snacks, CDs and DVDs and booklets and magazines in remaining gas station stores.
  • Insurance is becoming cheaper for car-sharing users. Car owners may be the victims.
  • Transport costs with more car sharing become less per kilometer: you only pay when you drive.
  • Savings on personal transportation costs favor other expenses.
  • Electric cars are getting cheaper and cheaper. Until they become more expensive again?

Social

  • Less serious or less likely damage.
  • Less or no speed violations depends on the rigor of the legislation and its technical implementations.
  • Less pressure on emergencies in hospitals in terms of accidents on weekends. More intoxications on weekends or during the week. This entails a reorientation of doctors’ specializations.
  • In the cities, the air becomes purer, resulting in fewer particulate matter-related patients.
  • When you drink, cargo is safely delivered to your home. Will that be allowed?
  • The police will have to invest in cyber technology for vehicle checks.
  • Cybercrime for transport is also becoming a problem on a social level. It is not whether cars will be hacked, but when and what will happen to them.
  • Illegal drug deliveries with fully automated cars become possible.

Technological

  • Car sharing makes it technically more feasible to provide sufficient electricitypoles for the cars in cities.
  • They are working purposefully to phase out fossil fuel plants: as they are insufficient in terms of efficiency for transport compared to other electricity generation, they become irrelevant.
  • Society is taking a big step forward with AI in traffic. This will require greater availability of the Internet.
  • Cybercrime is becoming a challenge. The vehicles of the future must in no way be an open system for intrusion from the Internet, except by police services.
  • The police and customs will be able to stop cars and freight transport for inspection in a secure manner.

Conclusions:

Governments will have to determine good indicators to see if this possible future will materialize. If necessary, they will have to develop regulations.

The insurance companies will work with governments to develop a method to allocate liability in the event of damage. This becomes more difficult when cars of different technical levels are involved in a claim.

The food industry will have to look for and find new outlets.

Automotive companies will have to invest heavily in the development of quality software algorithms and their implementation.

There will be a pressure reduction in urgency. Emergency services and their emergency physicians will partly reorient themselves to other specialties. Universities should follow the evolutions of traffic to see when they need to make and what changes.

A new type of crime or terror will eventually emerge: cybercrime on cars to disrupt them and associated extortion. Police and government departments will prepare for this. This will be difficult with the ‘war for talent’ that is already present. The automotive industry is therefore also making an effort to secure this, making cars as ‘unhackable’ as possible. Cooperation between the car industry and the police forces is inevitable.

War and Strategic Risk Management

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Author: Manu Steens

In this text I write my own opinion, not that of any organization.

By now everyone has an idea of what war means, which is why I start from a different starting point for this blog, strategic risk management.
Most people understand the concept of risk and understand mainly the operational risks, such as human error and system errors, but what is meant by strategic risks?

A strategic risk is a risk associated with an organization’s strategic decisions. A strategic decision can be any decision that determines the long-term survival of the organization. Such decisions are made within the framework of the mission and vision of each organization and have some consequences for the concept of risk.

A specific strategic decision is usually unique. Singular, so not frequently repeated throughout the history of the organization. The associated risks are therefore exceptional in nature and have no prior history. Determining the probability (‘p’) of occurrence of such risks (‘R’) is therefore always a perilous undertaking. They are pure unknowns and pure uncertainties. But, on the basis of rigorous thinking, one can indeed determine its impact (‘i’). The definition of risk as a product of opportunity and impact (R=p.i) therefore, in my opinion, does not apply to (most) strategic risks. As a result, they have a gap in their evaluation compared to traditional (often operational) risk management. This gap manifests itself in uncertainty.

Starting a war is such a strategic decision. The chance of success (with success as an event) is a priori unknown. So winning the war is an uncertainty.

What happens to uncertainties? People can’t handle that very well. We prefer certainties, even if the associated chances of risks are small. People want to know their chances and look for remedies. One such means is ‘uncertainty absorption’. This has a lot to do with systematically explaining away uncertainties, and replacing them with (personal) certainties.

Uncertainty causes stress and stress reduces the capacity of reasoning and deciding. Some even feel anger rising and we all know that making decisions in such a state is not optimal. That is precisely why we use a different phenomenon. We do a lot of mental gymnastics to replace uncertainty with an illusion of what we consider to be a credible certainty. This replaces a series of possible future outcomes with a single estimate.

To make that assessment, we use the past. We scan our history for similar situations and then we state that the past predicts the future. We use broad estimates of similar situations. This is necessary because the strategic decision is so unique. People start to cherish analogous reasoning and pay too little attention to the differences with the present. When the past gives that false sense of certainty, we eliminate any perception of unpredictability.

Uncertainty absorption can thus be defined as “The search for inferences in a large body of evidence. Then we communicate similar cases instead of the actual evidence from that body of evidence.”

A phenomenon that takes place at every layer of an organization.

One reason uncertainty absorption happens, even in warfare, is because many leaders don’t stand with their bones in the mire of the trenches. That way they don’t want to know what could happen, they do want to base their decision on a single possibility. Illusion goes through similar things to interpretations to move on to possibilities, probabilities and certainties. A wide spectrum of possibilities is thus reduced to a single one. As a result, the decision-maker in the C-suite is severely limited in his judgment as well as the correctness of his view of the future.

An important consequence is that strategy is determined by people with a adjusted version of reality. The further away the leader is from everyday reality, the greater the gap between strategic objectives and the actions to carry them out. As a result, it is difficult to answer the four important questions of strategic management correctly:

  • A: What unique value do we want to deliver to our customer (in a war: ‘our’ citizen)?
  • B: How do we create that value?
  • C: Where do we create that value?
  • D: How do we secure that value from disruption (in the future)?

If we take as a case the situation of the Russian population in Ukraine, before the start of the invasion, then there are some reservations to be made on the basis of these four questions.

  • A: It seems ok to me to want security for the Russian citizens in Ukraine.
  • B: Putin chose war. (The question is whether this makes sense with question D.)
  • C: He wants to create that security in Ukraine.
  • D: Securing the safety of one group can never succeed with a war against another. There was already a lot of resentment through the past and that resentment is only increasing with this war. In the long term, he thus creates a more unsafe situation.

This strategic decision (waging war in Ukraine) therefore entails the risk that the insecurity for the Russian population in the future Ukraine may be greater than before.

Unless the ‘trick with the pigeon would work’, as he applied it to the Chechens at the time, which made them obedient partners. In short, the strategy in the war in Chechnya was: hit them, don’t kill them, reach out to them and then rebuild their country. That this can work here, however, is uncertain because many Ukrainians have fled the country, and that in numbers that the Chechens could not. In my opinion, this ‘trick with the pigeon’ will not work here, with the main reason being that the leader is too far removed from the actual situation.

(for your information: https://historianet.nl/maatschappij/geschiedenis-van-rusland/tsjetsjenie-van-ruslands-zorgenkind-tot-poetins-jaknikker)

Outsourcing processes or services or not – What are strategic risks that you have to consider ?

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Author: Manu Steens

In this article I write my own opinion, not that of any organization.

The economic and financial cycle waves often lead to savings. One of the methods that is being tried is outsourcing services. In addition to the question as to whether this is a saving, because people often intervene with other budgets, which means that a cost is diverted from one’s own personnel costs, there are a number of criteria that I think should all be checked off. This before deciding to outsource a task in the short or longer term. There are a number of strategic risks involved.

The concerns are as follows:

  1. Is the service or process a core competence of the organization that should be kept in-house, even if it seems that this is an adverse cost? In my opinion, for many organizations since the information age came into being, ICT and all related processes are things that meet this. After all, it should not be forgotten that Flanders is increasingly evolving into a knowledge society. And knowledge depends one-on-one on information and information systems. ICT outsourcing provides an extra link in the risk chain, and reduces the involvement of ICT professionals with your business. The fact that there is a contract almost always means that there are gaps in the service, for which one has to pay extra.
  2. Is it really less expensive to outsource the process, if one considers all in-house and out-house life cycle costs? After all, an organization often continues to pay for the risks associated with the process that has been outsourced. One therefore remains morally obliged to remain awake to the risks associated with the process. Outsourcing the service does not outsource liability for it as long as it is done in the name of one’s own organization. Further, a contract between the two parties does not mean that the quality of the service is guaranteed at the same level. After all, another company often subscribes to different values. And a contract, as a legal binder, therefore has backdoors too easily.
  3. Is the process more expensive to carry out in-house, or can it be redesigned to reduce costs sufficiently to adequately meet the costs saved in outsourcing? If one can redesign it but doesn’t, one loses skills because off the outsourcing, and the opportunities to improve in one’s own field through cross-pollination with related or other services.
  4. Is there an investment involved in outsourcing the service, and if so, can this cost be easily recouped with the savings? Conversely, if outsourcing meant liquidating equipment, would the proceeds of sale mean anything in the return on the investment of outsourcing? This is a purely financial criterion. If the CFO does not address this, it is a missed opportunity or an unnecessary risk that one runs, depending on the facts post-outsourcing.
  5. If outsourcing is disappointing, can the service be easily insourced again in the future? Are the lost knowledge and skills therefore easy to reacquire? With the current ‘war for talent’, this is not obvious. And people who have been relocated will not like to be placed from one job to another on an ad hoc basis. People who are not permanently appointed will have found another job by now, perhaps even better paid. If insourcing is not successful, a strategic mistake has been made from the start.
  6. Does management have enough time to foresee a transition to outsource it? But do they also have enough time to foresee to insource it again if the outsourcing is disappointing? Because such operations are not low-hanging fruit, and require efforts from top management. It should not be a light decision. After all, top management is responsible for picking the high-hanging fruit, not for picking the low-hanging fruit .
  7. Could renting equipment or asking the vendor of equipment for this service (such as software vendors) provide a lifecycle with a solution that is doable, other than outsourcing? For example, by training an AI to support a service with software. If this is possible, would this mean a positive influence of innovation and therefore efficiency? In the short term, or only in the long term?
  8. What if the contractor goes bankrupt, despite ‘good papers’ when the contract was awarded?

In my opinion, the answer to all these questions must be that outsourcing is the only meaningful answer, otherwise, when in doubt of an argument, it is better to keep the service in-house.

This does not alter the fact that outsourcing tasks can be useful. But especially when the viability of a new service has to be determined, and at a start-up, during the transition period in which the service has to prove itself. In this way, the new service can be optimized not only with cross-pollination with other own services, but also with the experiences of consultants, at the most important moments of the life cycle, namely the design and the teething problems period.

It is best not to outsource essential management needs of an organization. When you have them in the organization, you have unique assets in your hands. Outsourcing skills means that in the long run the cost of outsourcing will increase because one gets stuck by losing the skills.

CAW (Combined Arms Warfare) and climate drought

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Author: Manu Steens

In this article I write my own opinion, not that of any organization.

We write February 20, 2023. A Flemish newspaper writes “Drought plunges Argentina into a perfect storm – Argentina is groaning under the most severe drought in sixty years. The whole world will feel that”.

On the internet, journalists explain that neither Ukraine nor Russia are making progress in terms of gaining ground, and that the West’s arms supplies to Ukraine matter less than how those weapons are used. CAW – Combined Arms Warfare – is the new magic word. (More information about CAW can be found at Combined arms – Wikipedia)

One question is, does it make sense to post this wisdom about CAW and Ukraine on the net? With the collection of his flying equipment, it seems that Russia could also be planning something similar. Furthermore, there is a chance that Russia wants more than that: will it apply hybrid warfare in total warfare? What if it attacks Ukraine’s economy by destroying grain production in the fields? The other countries in the world will have to step in with the food supply. What could such a future look like?

There are the following uncertainties here that I plot against each other:

  • Russia is actively or trying to eliminate Ukraine’s grain production or not;
  • other countries (not just the West) may or may not be able to provide sufficient assistance in terms of grain production.

This gives us the following possible futures:

1: The show goes on – Assisting succeeds and the grain of Ukraine is not destroyed by Russia. Ukraine can export its grain and generate income. The disappointing harvest in Argentina does cause increases in food prices. This is going to be felt by ordinary citizens in many countries and is going to cause inflation to rise.

2: Feeling hungry – Assisting succeeds and the grain of Ukraine is destroyed by Russia.

In addition to the rising food prices, famine is imminent in Ukraine. More people are seeking refuge in neighbouring countries. Aid organizations are providing more food packages to Ukraine.

3: Also hungry – Assisting is not possible and the grain of Ukraine is not destroyed by Russia. There is a famine that is spreading: countries that depend on foreign grain see their livestock shrink. Meat production in a number of Western countries is coming to a standstill or is shrinking sharply. In the southern hemisphere, too, there is a cry for help with regard to livestock. A number of grain exporting countries impose export restrictions. Part of the global food supply chain comes to a halt.

4: Human disaster – Assisting is not possible and the grain of Ukraine is destroyed by Russia. The global supply chain of cereals and meat products is partly at a standstill, but the production and export of beer and alcohol production is also experiencing serious problems. Not only Ukraine is experiencing a famine, parts of Africa were also dependent on the grain from Ukraine. Inflation is skyrocketing, reaching more than 10% year-on-year again. Certain foods are taken out of the basket that defines inflation, in order to try to moderate wages and not derail the economy. The number of suicides among ranchers is increasing.

Conclusion: regardless of whether the war in Ukraine increases in intensity, food prices come under attack, and world hunger is not getting any better. Sectors that depend on grain production are also coming under attack. Ostensibly, this is independent of the war, but given that Ukraine is a breadbasket for the world, one disaster here may fuel the other. So a conclusion may be that it is a bad time to go to war. But it always is.

Reconstruction Ukraine – what are key points ?

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Author: Manu Steens

In this article I write my own opinion, not that of any organization.

Ukraine is currently being shot into the Stone Age. The target par excellence is critical infrastructure: water and energy installations, as well as others, such as road infrastructure, ports and airports, do not come out unscathed.

The question then is, with what will remain of it, not only what it can look like, but especially what are key points for reconstruction.

On rough terrain, such as a broken road infrastructure, transport costs quickly rise to five times those of an intact road network. The financial cost has thus been demonstrated as an important risk for the supply chain.

Health care: care for the injured, but also the current tuberculosis and the still present corona pandemic and the flu wave and associated pneumonia, need for action: provide for a reconstruction of sick care.

Training: schools are needed to provide a renewed approach to training for future generations, but the infrastructure includes not only the buildings, but also the teachers, the classroom infrastructure, projectors, IT systems, course materials,…

Airports that have been destroyed must be rebuilt, not only for civil aviation, but also for military aviation. This is important for easy accessibility deep in the country, once there is peace.

The water supply needs to be redeveloped, debris cleared.

In order to rebuild that critical infrastructure, concrete mixers have to run, pumps move water, and therefore electricity is needed, for that in one of the most important first infrastructureworks the electricity nodes have to be rebuilt. In order to clear the debris and brick buildings, heavy machinery and vehicles are also needed on site. So transport will have to be possible, and one must provide fuel and people. Then nutrition is also needed.

With such reasoning we find out what is important for the reconstruction of the Ukrainian state, when we do this from scratch: a first attention should be given to the following sectors (not necessarily in that order) (non-exhaustive list)

  1. Agriculture and livestock farming and (sea) fishing as a basic link in the food chain.
  2. Food and beverage production and the hospitality industry, including drinking water sector
  3. Medicine, medicine and hygiene. They may be exhausted and run slower for a while, also due to recovery from past crises.
  4. Clothing for protection against weather conditions.
  5. Substances and simple chemistry (such as fuels, soap, calcium carbonate (for many applications), …)
  6. Advanced chemistry e.g. petrochemical sector products (e.g. for medicines).
  7. Materials such as clay, metals, glass, and building materials
  8. Electricity and other forms of energy (because then a lot can work where there are people who can work)
  9. Mobility / transport (because then factories can be supplied and the supply chain works back)
  10. Means of communication (because justice depends on it, but actually the entire society)
  11. Relaunch of the schools: what about the people who could not do their year?
  12. Politics: keeping predators at bay who want to take over the economic markets in the terminally ill country in order to make it easier to take the future markets
  13. Banks, with a key role for economic / financial transactions

What is important as a supporting skill is the specialized supply chain of many of these sectors. These include roads, railways, waterways, ports, airports, warehouses, cooling, production sites…

So a big interest of politics will be to facilitate those supply chains. A key role for her is to ensure that the different sectors work together to achieve optimal results. In order to get these things going, support from abroad is needed. Read the EU.

However, such a situation of reconstruction entails risks: threats and opportunities.

For example, every port that is set up threatens to become a hub of drugs, counterfeits, e-waste (waste import), weapons, illegal immigrants, etc.

The clearing of bombed-out apartments and critical infrastructure not only produces gravel, but also precious metals such as copper, which is wrapped in plastic. If one tries to remove this plastic by burning it, dioxins are released. They initially move in the air, then rain out and thus end up in the food chain or elsewhere in fauna and flora.

Due to the large future demand for vehicles, the country will become a market for second-hand and third-hand vehicles from Western European countries. Transport of such vehicles is known to transport a lot of waste in the cargo areas of these vehicles.

The high need for cheap means of communication will increase the demand for second-hand means of communication such as mobile phones and computers, causing second-hand devices to change hands again. In addition, a new reinstallation takes place, which greatly shortens the life cycle. That gives a false appearance of cost-benefit responsible means of communication.

Weak legislation and a lack of income from the country will tempt farmers to use very strong very unhealthy weedkillers to maximize their crops, which does not benefit the health of the customers.

Due to a shortage of police presence in the transition period to a rebuilt state, crime will flourish during that transition period .

A shortage of inspectors creates investors looking for pollution havens. Although, according to certain studies in the literature, this is often not the reason for attracting foreign investment. More often people are looking for many and cheap well-trained workers, for an abundance of skilled suppliers and for an environment with several other investors. A number of these are in themselves bottlenecks.

Longer-term investments are needed before they bear much fruit.

The destroyed country can become a haven for extremists.

The conclusion of all this is that peace in the short term requires a well-oiled government apparatus.