Wither the Automobile in the New Economy?

Employer Location and Impact on Modal Choice

It's really people who drive the technology business."

December 3rd and 10th,2001 - If you have ever seen the movie L.A. Story, there is a clip of comedian Steve Martin walking out of his house, stepping into his car and driving it no more than 60 metres down the same side of the street to another house whereupon he reaches his final destination. This parody of automobile behavior in Southern California is too often taken as gospel among transportation planners. "We can't compete with the automobile." "Only losers use public transport." Well, the truth is we forget how limited the performance of the automobile is, preventing us from assessing whether the automobile may be an outdated commuting mode in the New Economy.

The truth is that the decision to choose an automobile is almost always a rational modal choice for auto travelers. In New York City and London, England, public transport modes carry the majority of commuters. Conversely, in places like L.A., especially outside of the City of Los Angeles, the automobile is the most time and convenient efficient mode of transport. Often the choice of commuting mode is determined more by the location of an employer.

I remember in 1969 when my father's workplace, a factory, moved from the inner city to the outer edges of Montreal, in a suburb called Ville-St. Laurent. He used to commute by bus and it would take him less than one hour to get to work. But once Jarry Hydraulics Ltee moved, the location of the new plant alongside a major freeway 20 kilometers away where the bus network was not yet sufficiently developed, determined modal choice in a significant manner: it converted an employment force of bus commuters into auto commuters. My father began to car pool, eroding public transport market share.

At the time, I was puzzled why my father's employers wanted to move the company so far from our home. Obviously, the company needed more space for their assembly line and only a new suburban location was able to provide space at an affordable cost. For the industrial economy, the capital value of fixed assets such as land, buildings and equipment is greater than the capital value of labor, explaining the Jarry Hydraulics Ltee decision to relocate at a much more distant location regardless of the consequences to their employment force or the road network.

But today in the New Economy, the capital value of workers is greater than the capital value of fixed assets, portending major spatial implications in the organization of our urban activities. This shift is providing urban and transportation planners with a new opportunity to create centralized urban cores. But only if the new collective transportation mode can link employers to a larger labor force than can the present day commuting automobile.

There is an interesting article from Canada's Globe and Mail newspaper that appeared on the 19th of November. The article is appropriately entitled, "It's Really People Who Drive the Technology Business." The founder of Electronic Arts, Paul Lee explains how his organization is spread out with offices in Canada, the United States, Australia, Britain and Japan.

This spatially extended organization allows Electronic Arts to become the leading developer of computer games. No doubt the footloose facility of telecommunications allows them to manage their intellectual capital efficiently. But please note how often their workers must travel, demonstrating how telecommunications is creating a new demand for longer distance travel. If the company had chosen to centralize their workforce in one location, their ability to lead the market would never have materialized.

"Certainly it would be easier, especially for me and Don, to have everything in one location," Mr. Lee says. Don Mattrick, president of Worldwide Studios, is also based in Vancouver. "But the reality of it is, we want really, really good people. We hire the best. And the best don't always want to leave where they are living.

Electronic Arts in contrast to Jarry Hydraulics Ltee, is bringing the work closer to their workforce. These companies are defying the limitations of the metropolis by reorganizing their workforce and creating new travel markets. We can be certain that unlike Steve Martin L.A. Story, Mr. Lee does not use the automobile to travel to his distant offices but travels by airplane, a collective transportation mode.

The creation of an expanded urban labor market beyond the metropolis to the Interactive Megalopolis, The Interlocking Metropolitan in China, or the Deltametropolis in The Netherlands will again influence the modal choices for commuters by changing the organization of work in spatial terms.

The automobile is largely limited in range to 100 kilometers or so, roughly one to two hours in commuting travel time. The Magplane Commuter System is able to transport workers hundreds of kilometers within 60 or 90 minutes, including station access and egress times. Because the Magplane system will still require passengers to get to the many stations that we can serve, a whole new type of centralized land development could occur as both employers and employees will wish to limit their commuting travel times if only to gain access to a larger labor market.

The irony is striking because the centralization of the urban core can also be achieved by the dispersal of urban activities over greater distances and the New Economy is providing us with this opportunity but only if we are able to exploit the continuing desire for New Economy companies to change their organization of work to achieve needed labor productivity increases.

In contrast to my father, I am allowed to work from Montreal rather than commuting daily into the Boston area where the offices of Magplane Technology Inc. are located. This generational change can only be explained by the changing nature of work in the New Economy and the location liberating effects of telecommunications and transportation technologies.

See Globe and Mail article: "It's Really People Who Drive the Technology Business."

This article is published with the express permission of Richard Zavergiu. Please visit www.magplane.com

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