The Automotive Road to Technological Change: Diffusion of the Automobile as a Process of Technological Substitution

Working Paper

THE AUTOIKIWX ROAD

TO TECHIWLOGICAL CHANGE:

DIFFUSION OF THE AUTOMOBILE AS A TECHNOLOGICAL SUBSTITUTION PROCESS

Nebojsa Nakicenovic

April 1985 WP-85-19

International Institute for Applied Systems Analysis

A-2361 Laxenburg, Austria

NOT FOR QUOTATION WITHOUT PERMISSION OF THE AUTHOR

TI-IE A U T O I ~ ~ T ~ ? ~ ' E R O m

TO TECHE;OLOGICAL CKANGE:

DIFFUSION OF THE AUTOMOBILE AS A TECHNOLOGICAL SUBSTITUTION PROCESS

Nebojsa Nakicenovic

April 1 9 8 5 WP-85-19

Working _Papers a r e interim r e p o r t s o n work of t h e International Institute f o r Applied Systems Analysis and have r e c e i v e d only lim- ited review. Views o r opinions e x p r e s s e d h e r e i n d o not neces- s a r i l y r e p r e s e n t t h o s e of t h e Institute or of i t s National Member Organizations.

INTERNATIONAL INSTITUTE FOR APPLIED SYSTEMS ANALYSIS 2361 Laxenburg, Austria

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This working paper describes one of t h e ongoing activities in t h e study of t h e evolution a n d development of t h e world automotive i n d u s t r y within t h e IIASA Science a n d Technology Program. The r e p o r t considers t h e evolution of t h e automobile a s a s e r i e s of i n t e r l a c e d technological s u b s t i t u t i o n s t h a t c h a n g e d t h e production methods a n d vehicles with a high degree of regularity.

Boris Segerstahl Deputy Director

The Automotive Road t o Technological Change:

D i f f u s i o n o f the A u t o m o b i l e as a T e c h n o l o g i c a l S u b s t i t u t i o n P r o c e s s

ABSTRACT

Advancement of t h e motor vehicle a n d i t s production methods i s analyzed as a p r o c e s s of technoiogical change. In a b r o a d e r c o n t e x t , motor v e h i c l e s evoiveci as a n i n t e g r a l component of r o a d t r a n s p o r t t h r o u g h a s e r i e s of i n t e r l a c e d substitutions of old by new technologies. Buiiding on a l a r g e number of s t u d i e s t h a t d e s c r i b e d technoiogicai substitution p r o c e s s e s , f i r s t i t i s shown how new e n e r g y forms r e p l a c e d t h e i r p r e d e c e s s o r s a n d how t h e oici marine t r a n s p o r t technologies w e r e substituaed by new ones. These examples c o n s t i t u t e some of t h e o l d e s t , empiricaiiy documented technoiogical c h a n g e s and show t n a t many e v e n t s in t h e dynamics of e n e r g y substitution a n d marine t r a n s p o r t are r e l a t e d t o technological c h a n g e s in r o a d t r a n s p o r t .

I t i s shown t h a t t h e s e substitution p r o c e s s e s c a n b e d e s c r i b e d by simple r u i e s and t h a t t h e r e p l a c e m e n t of a i d by new technologies in t h e e n e r g y a n d t r a n s p o r t systems l a s t e d a b o u t 80 y e a r s . The technological c h a n g e s within r o a d t r a n s p o r t , however, were m o r e r a p i d . Replacement of h o r s e s by automobiles a n d o l d e r by newer g e n e r a t i o n s of motor vehicles and production methods l a s t e d only a f e w d e c a d e s in t h e United S t a t e s . Thus, technological substitutions within t h e r o a d t r a n s p o r t system were considerably s h o r t e r t h a n t h e expansion of r a i l r o a d s , s u r f a c e d r o a d s , a l l r o a d vehicles t o g e t h e r , a n d t h e more r e c e n t expansion of a i r t r a n s p o r t .

TABLE OF CONTENTS Page

1 1 INTRODUCTION

1 2

ENERGY

SUBSTLTUTION

11 3 MOTOR VEHICLE OR THE HORSELESS CARRIAGE

21 4 TECHNOLOGICAL CHANGES

3 1 5 AUTOMOBILES

AND

EMISSIONS

35 6 AUTOMOBILES

AND

THE TRANSPORT SYSTEM

37 7 CONCLUSIONS

39 DATA SOURCES

42 BLBLIOGRAPHY

LIST OF FIGURES

2 F i g u r e 2 . 1 P r i m a r y E n e r g y Consumption.

4 F i g u r e 2.2 Substitution of Fossil, Hydro a n d N u c l e a r f o r Renewable E n e r g y .

5 F i g u r e 2 . 3 P r i m a r y E n e r g y Substitution.

7 F i g u r e 2.4 Tonnage of Merchant Vessels.

8 F i g u r e 2 . 5 Substitution in Merchant Vessels by Propulsion System.

8 F i g u r e 2.6 S u b s t i t u t i o n in Merchant Vessels b y S t r u c t u r a l Material.

13 F i g u r e 3.1 Number of C a r s , Buses, a n d T r u c k s . F i g u r e 3 . 2 Road Mileage in t h e United S t a t e s .

F i g u r e 3.3 Substitution of Unsurfaced by S u r f a c e d Roads.

F i g u r e 3.4 Number of Non-Farm H o r s e s (and Mules) and C a r s . F i g u r e 3.5 Substitution of Non-Farm H o r s e s (and Mules) b y C a r s .

F i g u r e 3.6 Actual a n d Estimated Number of H o r s e s (and Mules) a n d Cars.

F i g u r e 3.7 Actual a n d Estimated Number of Road Vehicles.

Figure 3 . 8 P r o d u c t i o n of Buggies ( C a r r i a g e s a n d Sulkies) and C a r s .

F i g u r e 3.9 Substitution in P r o d u c t i o n of Buggies ( C a r r i a g e s a n d Sulkies) and C a r s .

F i g u r e 3.10 Actual a n d Estimated P r o d u c t i o n of Road Vehicles.

F i g u r e 4.1 Substitution in P r o d u c t i o n of Open a n d Closed C a r Bodies.

Figure 4.2 Substitution in P r o d u c t i o n of Factory-Installed Transmissions.

26 F i g u r e 4.3 Substitution in P r o d u c t i o n of Drum a n d Disc B r a k e s . 2 7 F i g u r e 4.4 Diffusion of Factory-Installed Air Conditioning.

2 8 F i g u r e 4.5 Substitution of Factory-Installed Diagonal a n d Radial Tires.

2 9 F i g u r e 4.6 Substitution in Production of Manual a n d Power S t e e r i n g . 32 Figure 5.1 Substitution of C a r s with Emission Controis.

34 F i g u r e 5.2 Substitution of Leaded by Lead-Free Gasoline.

3 6 F i g u r e 6 . 1 I n t e r c i t y P a s s e n g e r T r a f f i c Substitution.

The Automotive Roaci to Technoiogical Change:

D i f f u s i o n o f the A u t o m o b i l e as a T e c h n o l o g i c a l S u b s t i t u t i o n P r o c e s s

1 INTRODUCTION

Analysis of t h e h i s t o r i c a l r e p l a c e m e n t of old by new technologies h a s shown t h a t most of t h e s e p r o c e s s e s c a n b e d e s c r i b e d by simple r u l e s t h a t a r e c a p t u r e d in t h e logistic s u b s t i t u t i o n model ( s e e ~ a r c h e t t i , 1977; M a r c h e t t i a n d Nakicenovic, 1979; M a r c h e t t i , 1979; a n d Nakicenovic, 1984). The evolution of motor v e h i c l e s d u r i n g t h e last 1 0 0 y e a r s c a n a l s o b e s e e n as a s e r i e s of i n t e r l a c e d technological c h a n g e s of p r o d u c t i o n methods a n d vehicles. I t will b e shown t h a t t h e s e c h a n g e s c a n b e c a p t u r e d by logistic s u b s t i t u t i o n anaiysis a n d t h a t t h e y h a v e o c c u r r e d with a high d e g r e e of r e g u l a r i t y . W e will distinguish t h e s u b s t i t u t i o n p r o c e s s e s in t e r m s of annual p r o d u c t i o n of motor v e h i c l e s from equivaient p r o c e s s e s at t h e level of t h e whole f l e e t .

In o r d e r t o i i l u s t r a t e a n d d e s c r i b e t h e p r o p e r t i e s of t h e model, w e will f i r s t give examples of how new e n e r g y f o r m s r e p l a c e d t h e i r p r e d e c e s s o r s , s i n c e technoiogicai c h a n g e s in t h e e n e r g y system c o n s t i t u t e o n e of t h e f i r s t a n d most complete a p p l i c a t i o n s of logistic s u b s t i t u t i o n analysis a n d b e c a u s e many e v e n t s in t h e dynamics of e n e r g y s u b s t i t u t i o n are r e i a t e d t o technological c h a n g e s in t h e t r a n s p o r t system. In addition, w e show some of t h e o l d e s t documented technological c h a n g e s within t h e t r a n s p o r t system

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t h e s u b s t i t u t i o n of sailing by steamships.

S i n c e t h e United S t a t e s h a s t h e o l d e s t r e c o r d e d h i s t o r y of t h e development a n d expansion of t h e automobiie, \ h e examples of technological c h a n g e in p r o d u c t i o n methods a n d vehicles will b e i l l u s t r a t e d exclusively by t h e American e x p e r i e n c e . Thus, whiie t h e r e s u l t s may a p p l y in o t h e r industrialized c o u n t r i e s with a similarly long h i s t o r y of motor v e h i c l e s , i t would b e n e c e s s a r y t o d e t e r m i n e w h e t h e r o r not t h e same o r equivalent r e s u l t s c a n b e o b t a i n e d f o r o t h e r c o u n t r i e s .

2 ENERGY SiJBSTlTUTION

Analysis h a s shown t h a t t h e competitive s t r u g g l e between v a r i o u s s o u r c e s of p r i m a r y e n e r g y o b e y s a r e g u i a r substitution p r o c e s s t h a t c a n b e d e s c r i b e d by r e i a t i v e l y simpie r u l e s (Marchetti, 1977; Marchetti a n d il'akicenovic, 1979; a n d Nakicenovic, 1979). The dynamic c h a n g e s in t h i s p r o c e s s are c a p t u r e d by logistic e q u a t i o n s t h a t d e s c r i b e t h e r i s e of new e n e r g y s o u r c e s a n d t h e d e c l i n e of t h e old o n e s . F i g u r e 2 . 1 shows t h e p r i m a r y e n e r g y consumption in t h e United S t a t e s s i n c e t h e middle of t h e l a s t c e n t u r y . In addition t o f o s s i l a n d n u c l e a r e n e r g y consumption, t h e f i g u r e shows t h e u s e of m o r e t r a d i t i o n a l f o r m s of e n e r g y d u r i n g t h e l a s t c e n t u r y ,

F i g u r e 2.1 P r i m a r y E n e r g y Consumption.

inciuaing f u e l wood, ciirect u s e s of water a n d wind power, a n d u s e of working animais (calcuiated in t e r m s of e n e r g y c o n t e n t of animal feed). Data are p l o t t e d o n a logarithmic s c a i e and, show e x p o n e n t i a l growth p h a s e s in consumption of t h e most i m p o r t a n t s o u r c e s of p r i m a r y e n e r g y by piecewise-iinear, s e c u l a r t r e n d s . Thus, i t i s e v i d e n t t h a t e n e r g y consumption grew at e x p o n e n t i a l rates d u r i n g long time p e r i o d s b u t no o t h e r r e g u i a r i t i e s are d i r e c t l y d i s c e r n a b l e . However, t h e evolution of p r i m a r y e n e r g y consumption e m e r g e s as a r e g u l a r substitution p r o c e s s when i t is assumed t h a t e n e r g y s o u r c e s are d i f f e r e n t technologies competing f o r a m a r k e t .

Substitution of a n old way of satisfying a given need by a new p a t h h a s b e e n t h e s u b j e c t of a l a r g e number of s t u d i e s . One g e n e r a l finding i s t h a t s u b s t i t u t i o n of a n oid technology by a new o n e , e x p r e s s e d in f r a c t i o n a i t e r m s , follows c h a r a c t e r i s t i c S-shaped c u r v e s . F i s h e r a n d P r y (1971) formulated a v e r y simple b u t powerful

model of technoiogical s u b s t i t u t i o n . T h e i r model u s e s a two-parameter logistic function t o d e s c r i b e t h e s u b s t i t u t i o n p r o c e s s between two competing c o n t e n d e r s . ¹ The F i s h e r a n d P r y model c a n n o t b e usea t o d e s c r i b e t h e evoiutibn of p r i m a r y e n e r g y consumption, s i n c e evidently m o r e t h a n two e n e r g y s o u r c e s compete f o r t h e m a r k e t simuitaneousiy. iiowever, w e c a n g r o u p t h e p r i m a r y e n e r g y s o u r c e s i n t o two b r o a d c l a s s e s : t r a a i t i o n a i ( o r r e n e w a b l e ) a n d c o n t e m p o r a r y (fossil, h y d r o , a n d n u c i e a r ) f o r m s of e n e r g y . The t r a d i t i o n a l e n e r g y s o u r c e s include f u e l wood, d i r e c t u s e of water a n d wind power (i.e. w a t e r a n d wind miils a n d w a t e r f l o t a t i o n ) , a n d e n e r g y inputs of work animais e x p r e s s e d as t h e e n e r g y c o n t e n t of t h e f e e d consumed (i.e. f e e d equivalent). The c o n t e m p o r a r y e n e r g y s o u r c e s include c o a l , c r u d e oil, n a t u r a i g a s , h y d r o e l e c t r i c p o w e r , a n d n u c l e a r e n e r g y . F i g u r e 2.2 Hydro f o r Renewable E n e r g y . " shows t h e t w o c l a s s e s of e n e r g y u s e in t e r m s of t h e i r r e s p e c t i v e f r a c t i o n a l m a r k e t s h a r e s C p ) of t o t a l p r i m a r y e n e r g y consumption p l o t t e d in t e r m s of t h e q u a n t i t y J' / ( 1 -f ). The substitution p r o c e s s i s r e m a r k a b l y r e g u l a r o v e r t h e e n t i r e time p e r i o d ( o v e r 1 3 0 y e a r s ) . The l i n e a r , s e c u l a r t r e n d s i n d i c a t e t h a t t h e substitution of t r a d i t i o n a l e n e r g y s o u r c e s by fossil, h y d r o e l e c t r i c , a n d n u c l e a r e n e r g y c a n b e d e s c r i b e d with r e m a r k a b l e a c c u r a c y by t h e l o g i s t i c function. I t i s i n t e r e s t i n g to n o t e t h a t t h e 5 0 p e r c e n t mark in t h e s u b s t i t u t i o n p r o c e s s w a s r e a c h e d s h o r t l y b e f o r e t h e t u r n of t h e c e n t u r y . The time c o n s t a n t of t h e s u b s t i t u t i o n p r o c e s s i s q u i t e long

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m o r e t h a n 8 0 y e a r s were r e q u i r e d b e f o r e commercial e n e r g y s o u r c e s could c a p t u r e 5 0 p e r c e n t of t h e m a r k e t a f t e r t h e i r i n t r o d u c t i o n at t h e one- p e r c e n t m a r k e t s h a r e l e v e l b a c k in t h e 1820s. In f a c t , t h e e m e r g e n c e of c o a l at t h e o n e - p e r c e n t l e v e l ( t h e f i r s t of t h e fossil e n e r g y s o u r c e s t o find widespread u s e ) d a t e s b a c k t o t h e 1 8 2 0 s ( s e e F i g u r e 2.3 a n d Nakicenovic, 1 9 8 4 , w h e r e t h e substitution of f u e l wood a n d fossil e n e r g y s o u r c e s i s t r a c e d b a c k t o 1800), indicating o n c e m o r e t h e r e m a r k a b l e r e g u l a r i t y of t h e s u b s t i t u t i o n p r o c e s s .

In dealing with m o r e t h a n t w o competing technologies, w e must g e n e r a l i z e t h e F i s h e r a n d P r y model, s i n c e in s u c h c a s e s logistic substitution c a n n o t b e p r e s e r v e d in all p h a s e s of t h e s u b s t i t u t i o n p r o c e s s . E v e r y c o m p e t i t o r u n d e r g o e s t h r e e d i s t i n c t s u b s t i t u t i o n phases: g r o w t h , s a t u r a t i o n , a n d deciine. The growth p h a s e i s similar to t h e F i s h e r a n d P r y model of t w o c o m p e t i t o r s , b u t i t usually t e r m i n a t e s b e f o r e full s u b s t i t u t i o n i s r e a c h e d . I t i s followed by t h e s a t u r a t i o n p h a s e , which i s n o t logistic, b u t which encompasses t h e siowing down of growth a n d t h e beginning of decline.

A f t e r t h e s a t u r a t i o n p h a s e of a technology, i t s m a r k e t s h a r e p r o c e e d s to d e c l i n e logistically.

W e assume t h a t only o n e c o m p e t i t o r i s in t h e s a t u r a t i o n p h a s e a t a n y given time, t h a t declining technologies f a d e away s t e a d i l y at logistic rates not influenced by competition from new c o m p e t i t o r s , a n d t h a t new c o m p e t i t o r s e n t e r t h e m a r k e t a n d grow at logistic rates. The c u r r e n t s a t u r a t i n g c o m p e t i t o r i s t h e n l e f t with t h e r e s i d u a l m a r k e t s h a r e (i.e. t h e d i f f e r e n c e between o n e a n d t h e sum of f r a c t i o n a l m a r k e t s h a r e s of a l l o t h e r c o m p e t i t o r s ) a n d i s f o r c e d to follow a nonlogistic p a t h t h a t joins i t s p e r i o d of growth t o i t s s u b s e q u e n t p e r i o d of decline. A f t e r t h e c u r r e n t s a t u r a t i n g c o m p e t i t o r h a s r e a c h e d a logistic rate of d e c l i n e , t h e n e x t o l d e s t c o m p e t i t o r e n t e r s i t s s a t u r a t i o n p h a s e a n d t h e p r o c e s s i s r e p e a t e d until all b u t t h e most r e c e n t c o m p e t i t o r are in decline. In e f f e c t , o u r model assumes t h a t

1 T h e b a s i c a s s u m p t i o n p o s t u l a t e d b y F i s h e r and P r y i s t h a t once a s u b s t i t u t i o n o f t h e old b y t h e n e w h a s p r o g r e s s e d a s f a r a s a f e w p e r c e n t , i t w i l l proceed t o c o m p l e t i o n along t h e l o g i s t i c s u b s t i t u t i o n c u r v e :

= e x p ( a t

+a)

1

-f

w h e r e t i s t h e i n d e p e n d e n t v a r i a b l e u s u a l l y r e p r e s e n t i n g s o m e u n i t o f t i m e , a and 8 a r e c o n s t a n t s , f i s t h e f r a c t i o n a l m a r k e t s h a r e o f t h e n e w c o m p e t i t o r , w h i l e 1 -f i s t h a t o f t h e old o n e .

f / ( 1 - f ) f r a c t i o n ( f )

Figure 2.2 Substitution of Fossil, Hydro a n d Nuclear f o r Renewable E n e r g y .

c o m p e t i t o r s t h a t h a v e a l r e a d y e n t e r e d t h e i r p e r i o d of m a r k e t phase-out a r e n o t influenced by t h e i n t r o d u c t i o n of new ones. Deadly competition e x i s t s between t h e s a t u r a t i n g c o m p e t i t o r a n d all o t h e r more r e c e n t c o m p e t i t o r s ( t h e a p p r o a c h w a s f i r s t d e s c r i b e d in Marchetti, 1977; a more comprehensive d e s c r i p t i o n of t h e model a n d t h e assumptions i s given in Nakicenovic, 1979, 1984). This g e n e r a l i z e d model o f f e r s a phenomenological d e s c r i p t i o n of t h e substitution p r o c e s s and h a s been successfully applied f o r a b o u t 300 c a s e s t o d a t e , involving examples from biology, v a r i o u s technological p r o c e s s e s (such as substitution of e n e r g y forms o r s t e e l production methods), and s o on.

Figure 2.3 shows t h e p r i m a r y e n e r g y substitution f o r t h e United S t a t e s . Data and model e s t i m a t e s of t h e substitution p r o c e s s a r e plotted o n a logarithmic s c a l e using t h e quantity f / (1-f) v e r s u s time (j r e p r e s e n t i n g f r a c t i o n a l m a r k e t s h a r e s ) . The piecewise-linear, s e c u l a r t r e n d s indicate logistic substitution p h a s e s . The d e p a r t u r e of h i s t o r i c a i m a r k e t s h a r e s from t h e i r long t e r m p a t h s , d e s c r i b e d by t h e logistic substitution model, sometimes l a s t s f o r o v e r two d e c a d e s only t o r e t u r n t o t h e t r e n d a f t e r the prolonged p e r t u r b a t i o n . This i s t h e case with t h e m a r k e t s h a r e s of c o a l and oil d u r i n g t h e 1940s a n d 1950s, a n d f u e l wood a n d animal f e e d d u r i n g t h e 1860s a n d 1870s. This may a i s o indicate a possibie a b s o r p t i o n of t h e d e p a r t u r e of c o a l a n d n a t u r a l g a s m a r k e t s h a r e s from t h e i r iong-term p a t h s d u r i n g t h e l a s t t e n y e a r s .

F i g u r e 2.3 P r i m a r y E n e r g y Substitution.

The s u b s t i t u t i o n p r o c e s s c l e a r l y i n d i c a t e s t h e dominance of c o a l as t h e major e n e r g y s o u r c e between t h e 1870s a n d 1950s, a f t e r a long p e r i o d d u r i n g which f u e l wood a n d animai f e e a were in t h e lead. In t h e United S t a t e s , wood remaineci t h e p r i n c i p a l f u e l for t h e r a i l r o a d s up to t h e 1870s, although r a i l r o a d s a r e c o n s i d e r o d t h e symbol of t h e c o a l a g e . The l a s t p h a s e s of r a i l r o a d expansion up to t h e 1920s, t h e growth of s t e e l , s t e a m s h i p s , a n d many o t h e r sectors a r e a s s o c i a t e d with a n d b a s e d on t h e tecnnologicai o p p o r t u n i t i e s o f f e r e a by t h e m a t u r e coai economy. The dominance of f u e l wood, a n d l a t e r c o a l , shows a n i n t e r e s t i n g symmetry, e a c h p e r i o d of dominance lasting 'slightly o v e r 6 0 y e a r s . A f t e r t h e 1940s, o i l assumed t h e dominant r o l e simultaneously with t h e maturing of t h e automotive, p e t r o c h e m i c a l , a n d many o t h e r modern i n a u s t r i e s . I t i s i n t e r e s t i n g t h a t o i l r e a c h e d a o n e - p e r c e n t m a r k e t s h a r e a b o u t t w o d e c a d e s b e f o r e t h e f i r s t automobiles were p r o d u c e d in t n e Gnited S t a t e s (actuaily f o u r were m a n u f a c t u r e d in 1 8 9 5 , see E p s t e i n , 1928).

F u r t h e r , t h e f i r s t u s e of oil a n d n a t u r a l g a s d a t e s b a c k to 1 8 5 9 , p r e c e d i n g t h e f i r s t automobiies by aimost half a c e n t u r y .

Animal f e e d r e a c h e d i t s h i g h e s t m a r k e t s h a r e in t h e 1 8 8 0 s , indicating t h a t d r a f t animals p r o v i d e d t h e m a j o r form of l o c a l t r a n s p o r t a t i o n and motive power in a g r i c u l t u r e , d e s p i t e t h e dominance of r a i l r o a d s and s t e a m s h i p s as long-distance t r a n s p o r t modes. H o r s e c a r r i a g e s a n d wagons were t h e only f o r m of l o c a l t r a n s p o r t in r u r a l areas a n d basically t h e only f r e i g h t t r a n s p o r t mode in c i t i e s . In addition, t h e y moved goods a n d p e o p l e to a n d f r o m r a i l r o a d s a n d h a r b o r s . I t i s c u r i o u s t h a t t h e f e e d a n d c r u d e oil s u b s t i t u t i o n c u r v e s c r o s s in t h e 1920s, as if to s u g g e s t t h e simultaneous substitution of t h e h o r s e c a r r i a g e a n d wagon by t h e motor v e h i c l e t h a t

will b e d e s c r i b e d below. F i g u r e 2.3 p r o j e c t s n a t u r a l g a s as t h e dominating e n e r g y s o u r c e a f t e r t h e 1 9 8 0 s , although c r u d e oil s t i l l maintains a b o u t a 3 0 p e r c e n t m a r k e t s h a r e by t h e e n d of t h e c e n t u r y . N e v e r t h e l e s s , t h e p r o j e c t e d dominance of n a t u r a l g a s may imply c h a n g e s in t h e kind of automobile propulsion systems t h a t c a n b e e x p e c t e d in t h e l o n g e r t e r m f u t u r e (beginning of t h e twenty-first c e n t u r y ) . Certainiy enough c r u d e oil would b e a v a i l a b l e f o r gasoline distillation, but t h e i m p o r t a n c e of n a t u r a l g a s i n d i c a t e s t h e possibility of e i t h e r d i r e c t u s e of n a t u r a l g a s in t h e t r a n s p o r t sector or i t s t r a n s f o r m a t i o n i n t o s y n t h e t i c fuels, s u c h as methanol.

The logistic s u b s t i t u t i o n model i n d i c a t e s t h a t i t i s possible to d e s c r i b e t h e b r o a d f e a t u r e s of t h e evolution of t h e e n e r g y system in t h e United S t a t e s o v e r v e r y long p e r i o d s of time by r a t h e r simple mechanisms, d e s p i t e many t u r b u l e n t a n d p r o f o u n d c h a n g e s d u r i n g t h e last 1 3 0 y e a r s . More importantly, t h e s e c h a n g e s are p a r a l l e l e d by t r a n s f o r m a t i o n s of t h e t r a n s p o r t system, from sailing s h i p s a n d animal drawn v e h i c l e s to s t e a m s h i p s a n d r a i l r o a d s , a n d later to motor v e h i c l e s a n d a i r t r a n s p o r t . B e f o r e r e t u r n i n g to t h e a n a l y s i s of technological c h a n g e of t h e automobile, w e will f i r s t c o n s i d e r t h e s u b s t i t u t i o n p r o c e s s in t h e m e r c h a n t f l e e t of t h e United S t a t e s , s i n c e t h i s example i l l u s t r a t e s t h e evolution of o n e of t h e o l d e s t modes of t r a n s p o r t . The automobile i s b a r e l y 1 0 0 y e a r s old, w h e r e a s t h e r e c o r d e d c h a n g e s e n c o u n t e r e d in t h e evolution of t h e m e r c h a n t f l e e t c o v e r a p e r i o d of 200 y e a r s a n d include a fundamental t r a n s f o r m a t i o n of propulsion s y s t e m s , i n c r e a s e d s p e e d a n d s i z e of t h e v e s s e l s , a n d c h a n g e s in t h e c o n s t r u c t i o n methods a n d m a t e r i a l s .

The t r a d i t i o n a l s h i p propuision, in u s e e v e r s i n c e a n c i e n t times, w a s wind power a n d t h e t r a d i t i o n a l c o n s t r u c t i o n m a t e r i a l w a s wood. With t h e development of t h e s t e a m e n g i n e a n d t h e r e i a t i v e i y high e n e r g y d e n s i t y of hign-quality coais, i t w a s possible to slowly r e p l a c e s a i l s with steam engines. The f i r s t d e s i g n s w e r e of a h y b r i d t y p e employing b o t h s t e a m a n d wind power. With t h e i n c r e a s e in t h e s i z e of v e s s e l s , along with t h e e x p a n s i o n of o v e r s e a s t r a d e , a n d with t h e growth of t h e i r o n a n d steel i n d u s t r i e s , wood w a s i n c r e a s i n g l y s u b s t i t u t e d by i r o n a n d l a t e r by steel as t h e b a s i c c o n s t r u c t i o n m a t e r i a l . In f a c t , t h e number of v e s s e l s remained p r a c t i c a l l y c o n s t a n t between t h e e n d of t h e e i g h t e e n t h c e n t u r y a n d t h e 1 9 4 0 s at a b o u t 25,000 s h i p s , doubling to almost 5 0 , 0 0 0 d u r i n g t h e l a s t t h r e e d e c a d e s u p to 1970. During t h e same p e r i o d of almost t w o c e n t u r i e s t h e t o t a l r e g i s t e r e d t o n n a g e of t h e m e r c h a n t f l e e t i n c r e a s e d by almost t w o o r d e r s of magnitude, implying t h a t t h e a v e r a g e v e s s e i i s a b o u t 1 0 0 times l a r g e r today t h a n in 1800. This enormous i n c r e a s e in t h e t o n n a g e c a p a c i t y of a n a v e r a g e v e s s e l c a n only b e e x p l a i n e d by continuous improvements in p r o p u l s i o n systems, c o n s t r u c t i o n m a t e r i a l s , a n d design.

F i g u r e 2.4 shows t h e t o n n a g e growth of t h e m e r c h a n t fleet in t h e United S t a t e s s i n c e 1 7 8 9 a n d F i g u r e 2 . 5 shows t h e s u b s t i t u t i o n of sailing by s t e a m s h i p s , both coal a n d oil f i r e d , a n d l a t e r t h e m a r k e t p e n e t r a t i o n of motor, d i e s e l , a n d semi-diesel s h i p s in t e r m s of t h e i r r e s p e c t i v e tonnage. Sailing s h i p s dominated t h e m e r c h a n t fleet until t h e 1 8 8 0 s , although s t e a m e r s a c q u i r e d a o n e - p e r c e n t s h a r e of t h e t o t a l tonnage in 1 8 1 9 , m o r e t h a n half a c e n t u r y e a r l i e r ( a t t h e same time a s coal r e a c h e d a o n e - p e r c e n t s h a r e in p r i m a r y e n e r g y ) . By t h e 1 9 2 0 s steam v e s s e l s c o n s t i t u t e d m o r e t h a n 9 0 p e r c e n t of m e r c h a n t tonnage, t h u s t h e r e p l a c e m e n t of t h e t r a d i t i o n a l sailing s h i p l a s t e d almost LOO y e a r s . During t h e same d e c a d e motor s h i p s were i n t r o d u c e d a n d t h e i r s h a r e of total t o n n a g e h a s i n c r e a s e d e v e r s i n c e , although e v e n t o d a y t h e y h a v e n o t a c q u i r e d much m o r e t h a n o n e t e n t h of t h e fleet tonnage.

Consequently, s t e a m s h i p s a r e s t i l l a n i m p o r t a n t t y p e of m e r c h a n t v e s s e l a n d a r e

nllllon Tons

Figure 2.4 Tonnage of Merchant Vessels.

Figure 2.5 Substitution in Merchant Vessels by Propulsion System.

p r o j e c t e d in F i g u r e 2 . 5 t o remain so until t h e e n d of t h e twentieth c e n t u r y , although today t h e y are f u e l e d by oil a n d in some c a s e s u s e s t e a m t u r b i n e s i n s t e a d of coai- f i r e d a t m o s p h e r i c engines. During World War, t h e s h a r e of motor s h i p s s h a r p l y i n c r e a s e d a n d a c c o r d i n g i y t h e s h a r e of s t e a m e r s w a s below t i e long-term t r e n d d u r i n g t h i s p e r i o d . But t h e s e p e r t u r b a t i o n s were r e a b s o r b e d d u r i n g t h e 1960s t o r e t u r n t o t h e long-term t r e n d indicated by t h e logistic s u b s t i t u t i o n model.

F i g u r e 2.6 shows t h e s h a r e of wood a n d metal s h i p s in t h e m e r c h a n t f l e e t of t h e United S t a t e s . The r e p l a c e m e n t of wooden s h i p s w a s a r a t h e r r a p i d p r o c e s s t h a t s t a r t e d soon a f t e r t h e i n t r o d u c t i o n of Bessemer steelmaking in 1857. The f i r s t metal s h i p s were made o u t of i r o n , b u t later steel w a s a l s o used. The d a t a are n o t a v a i l a b l e f o r t h e p e r i o d b e f o r e 1885, so w e c a n only e x t r a p o l a t e ("backcast"), using t h e logistic s u b s t i t u t i o n model, t h a t metal s h i p s a c h i e v e d t h e o n e - p e r c e n t s h a r e a r o u n d t h e y e a r 1850. By 1 9 1 0 half of all m e r c h a n t t o n n a g e c o n s i s t e d of metal s h i p s a n d today v i r t u a l l y all s h i p s a r e made o u t of metal.

f/( 1-f) froctlon (f)

F i g u r e 2.6 Substitution in Merchant Vessels by S t r u c t u r a l Material.

The a b o v e a p p l i c a t i o n s of t h e logistic s u b s t i t u t i o n model to t h e h i s t o r i c a l r e p l a c e m e n t of o l d e r by n e w e r f o r m s of e n e r g y a n d propulsion of m e r c h a n t v e s s e l s i n d i c a t e t h a t improvements a n d growth a r e a c h i e v e d t h r o u g h a r e g u l a r , b u t discontinuous, p r o c e s s a n d t h a t new e n e r g y a n d m a r i n e p r o p u l s i o n technologies needed m o r e t h a n 8 0 y e a r s t o r e p l a c e o n e half of t h e o l d e r competing technology.

From t h e time of i t s f i r s t commercial u s e , e a c h new technology grows logistically until i t r e a c h e s a s a t u r a t i o n p h a s e a n d t h e n p r o c e e d s to d e c l i n e logistically while being r e p l a c e d by a n e w e r a n d m o r e promising technology. During e a c h p h a s e of

t h e s u b s t i t u t i o n p r o c e s s t h e dominant technology a p p e a r s to b e s t r o n g a n d u n a s s a i l a b l e , but with time i t d e c a y s as emerging c o m p e t i t o r s " a t t a c k " t h e newly e x p o s e d position of t h e m a t u r e technology. I t i s i n t e r e s t i n g to n o t e t h a t t h e s a t u r a t i o n point i s not, by and l a r g e , determined by m e r e p h y s i c a l or r e s o u r c e limitations, b u t r a t h e r t h r o u g h t h e dynamics of t h e i n t r o d u c t i o n of new technologies.

Thus, t h e m a r k e t s h a r e s i n c r e a s e until limits are e n c o u n t e r e d t h a t a p p e a r to b e endogenous to t h e m a r k e t ( o r system) itself. T h e s e limits are e n c o u n t e r e d b e f o r e complete m a r k e t t a k e o v e r .

3 MOTOR YEHlCLE OR THE HORSELESS CARFUAGE

The f i r s t motor v e h i c l e s were c u r i o s a n d v e r y few p r o p o n e n t s of t h e automobile envisaged i t s r a p i d development a n d dissemination t h r o u g h o u t t h e world d u r i n g t h e twentieth c e n t u r y . In t h e United S t a t e s t h e f i r s t h o r s e l e s s c a r r i a g e s posed a n a l t e r n a t i v e to t h e horse-drawn buggies a n d wagons. Especialiy as a commercial vehicle, t h e motor car o f f e r e d many p o t e n t i a l a d v a n t a g e s . P e r h a p s t h e most i m p o r t a n t w a s t h e possibility to i n c r e a s e t h e r a d i u s of l o c a l t r a n s p o r t c o m p a r e d with horse-drawn vehicles. In t h e 1 9 3 0 s t h e a v e r a g e d i s t a n c e t r a v e i e d p e r d a y by horse-drawn v e h i c l e s w a s between 1 0 a n d 20 miles a n d t h a t b y m o t o r v e h i c l e s w a s 3 5 a n d m o r e miles p e r day. Because t h e automobile w a s f a s t e r i t allowed many e n t r e p r e n e u r s to e x p a n d t h e i r c i r c l e of c u s t o m e r s a n d o f f e r e d a m o r e f l e x i b i e mode of l e i s u r e a n d business t r a n s p o r t . Also, r a i l r o a d s w e r e not c n a l i e n g e d by t h e beginning of t h e automobile a g e , but r a t h e r h e l p e d t h e expansion of motor v e h i c l e s s i n c e t h e y o f f e r e d a n e f f i c i e n t form of long-distance t r a n s p o r t t h a t combined w e l l with motor v e h i c l e s as t h e l o c a l , u r b a n , a n d r u r a l r o a d t r a n s p o r t . Within a few d e c a d e s t h e automobile became a n important form of t r a n s p o r t in t h e United S t a t e s a n d s t a r t e d also to c o m p e t e with r a i l r o a d s , e s p e c i a l l y f o r long-distance p a s s e n g e r t r a v e l . S i n c e .the 1 9 3 0 s up to t h e p r e s e n t , t h e total mileage t r a v e l e d by automobiles, a n d m o t o r v e h i c l e s in g e n e r a l , w a s divided almost equally between r u r a l a n d u r b a n t r a v e l .

E a r l y motor v e h i c l e s r e s e m b l e d horse-drawn buggies a n d wagons s i n c e most of t h e r u r a l r o a d s w e r e not p a v e d . L a r g e s p o k e d wheels, high r o a d c l e a r a n c e , a n d a wooden body c h a r a c t e r i z e d both horse-drawn buggies a n d wagons a n d m o t o r cars.

A l l told, o u r initial working h y p o t h e s i s i s t h a t in t h e United S t a t e s t h e automobile f i r s t d i s p l a c e d t h e horse-drawn vehicle. Only a f t e r t h e completion of t h i s s u b s t i t u t i o n p r o c e s s did i t e m e r g e as a n i m p o r t a n t t r a n s p o r t a t i o n mode in competition with t h e r a i l r o a d f o r long-distance movement of p e o p l e a n d goods a n d p e r h a p s also as a c o m p e t i t o r to u r b a n t r a n s p o r t a t i o n modes, s u c h as t h e t r a m o r local t r a i n . T h e r e f o r e , w e will divide t h e evolution of t h e motor v e h i c l e in t h e United S t a t e s i n t o t w o p h a s e s

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t h e f i r s t p h a s e e n c o m p a s s e s t h e s u b s t i t u t i o n of h o r s e s a n d animal-drawn v e h i c l e s a n d t h e s e c o n d p h a s e m a r k s a widespread diffusion of t h e individual t r a n s p o r t b a s e d o n t h e motor v e h i c l e , a f t e r o t h e r v e h i c l e s e s s e n t i a l l y d i s a p p e a r e d from American r o a d s .

The automobile h a d a r e l a t i v e l y late start in t h e United S t a t e s c o m p a r e d with E u r o p e a n c o u n t r i e s . C e r t a i n l y , n o single individual c a n b e c r e d i t e d with i t s invention. Steam motor v e h i c l e s e m e r g e d in t h e e a r l y n i n e t e e n t h c e n t u r y , b u t t h e f i r s t p r o t o t y p e s with i n t e r n a l combustion e n g i n e s a p p e a r e d in t h e 1880s. K a r l Benz w a s p r o b a b l y t h e f i r s t to design a n d build a fully functional m o t o r car b a s e d o n a t u b u l a r f r a m e a n d a single-cylinder i n t e r n a l combustion e n g i n e ( r a t e d at 1.5 h o r s e p o w e r allowing s p e e d s of up to 1 6 km/h). O t h e r designs of t h e time were limited to t r a n s p l a n t i n g e n g i n e s to v e h i c l e s designed f o r o t h e r p u r p o s e s . Be t h a t as i t may, t h e f i r s t motor v e h i c l e s t h a t a p p e a r e d in t h e United S t a t e s d u r i n g t h e 1 8 9 0 s included b o t h American a n d E u r o p e a n designs. In 1 8 9 5 f o u r m o t o r v e h i c l e s w e r e r e c o r d e d to b e in u s e in t h e United S t a t e s . The initial expansion of t h e automobile w a s v e r y impressive

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1 6 v e h i c l e s were in u s e a y e a r later, 9 0 in 1 8 9 7 , 8000 in 1 9 0 0 , almost half a million t e n y e a r s later a n d m o r e t h a n o n e million a f t e r a n o t h e r t w o y e a r s . Both in t e r m s of p r o d u c t i o n a n d number of v e h i c l e s in u s e , t h e United S t a t e s quickly s u r p a s s e d E u r o p e a n c o u n t r i e s . F o r example, Germany p r o d u c e d a b o u t 8 0 0 motor v e h i c l e s in 1900, F r a n c e a b o u t 3000, a n d t h e United S t a t e s m o r e t h a n 4000.

By 1 9 2 2 m o r e t h a n t e n million m o t o r v e h i c l e s were in u s e o n American r o a d s a n d t h e

100 million mark w a s s u r p a s s e d in 1970. In 1 9 8 3 1 2 5 million automobiles, 0.6 million buses, a n d 35 million t r u c k s were r e g i s t e r e d in t h e United S t a t e s . F i g u r e 3.1 shows t h e total r e g i s t r a t i o n s of c a r s , b u s e s , a n d t r u c k s in t h e United S t a t e s s i n c e 1895.

The expansion of motor v e h i c l e f l e e t s i s c h a r a c t e r i z e d by t w o , d i s t i n c t s e c u l a r t r e n d s with a n inflection in t h e 1 9 3 0 s f o r cars and t r u c k s a n d a less pronounced inflection in t h e 1 9 5 0 s f o r buses. S i n c e t h e t w o s e c u l a r t r e n d s of e a c h c u r v e a p p e a r t o b e r o u g h l y l i n e a r on t h e l o g a r i t h m i c s c a l e in F i g u r e 3.1, t h e motor v e h i c l e f l e e t s evolved t h r o u g h t w o e x p o n e n t i a l pulses. In a c c o r d a n c e with o u r working h y p o t h e s i s w e c o n t e n d t h a t t h e two e x p o n e n t i a l t r e n d s i n d i c a t e t w o d i f f e r e n t p h a s e s of dissemination of motor v e h i c l e s in t h e United S t a t e s . The f i r s t c h a r a c t e r i z e s t h e s u b s t i t u t i o n of horse-drawn r o a d v e h i c l e s a n d t h e s e c o n d t h e a c t u a l growth of r o a d t r a n s p o r t at l a r g e . Thus, t h e f i r s t expansion p h a s e i s m o r e r a p i d s i n c e i t r e p r e s e n t s a " m a r k e t t a k e o v e r " , w h e r e a s t h e s e c o n d r e p r e s e n t s t h e a c t u a l growth of t h e r o a d v e h i c l e f l e e t s a n d t h e a s s o c i a t e d i n f r a s t r u c t u r e s u c h as t h e highway system.

Sometimes i t i s s a i d t h a t t h e automobile c a u s e d t h e need f o r good r o a d s , sometimes t h a t t h e c o n s t r u c t i o n of good r o a d s c a u s e d t h e g r e a t development of t h e automobile i n d u s t r y ( s e e , e . g . E p s t e i n , 1928). Actually, t h e e x p a n s i o n of t h e r o a d vehicle f l e e t s i s p a r a l l e l e d by t h e growth of s u r f a c e d r o a d s mileage, while t h e total mileage of a l l r o a d s i n c r e a s e d v e r y slowly from 3.16 million miles in 1 9 2 1 to 3.85 million miles in 1981. F i g u r e 3.2 shows t h e t o t a l r o a d mileage in t h e United S t a t e s a n d t h e mileage of u r b a n streets ( e a r l i e r defined as municipal s t r e e t s ) , r u r a l r o a d mileage a n d mileage of all u r b a n a n d r u r a l s u r f a c e d r o a d s (bituminous p e n e t r a t i o n , a s p h a l t , c o n c r e t e , wood, s t o n e , a n d o t h e r ) . The f i g u r e i l l u s t r a t e s t h a t t h e growth of s u r f a c e d r o a d mileage p a r a l l e l e d t h e growth of t h e motor v e h i c l e f l e e t s a f t e r t h e 1930s. However, t h e expansion of s u r f a c e d r o a d s p r e c e d e d t h e expansion of motor v e h i c l e s . In 1 9 0 5 e i g h t p e r c e n t of all r o a d s w e r e s u r f a c e d , b u t l e s s t h a n 8 0 , 0 0 0 motor v e h i c l e s were used c o m p a r e d to a b o u t 3.3 million non-farm h o r s e s a n d mules

(22 million d r a f t animals were used f o r farming). Thus, e a r l y r o a d s were developed f o r h o r s e s a n d not automobiles, but motor v e h i c l e s e x p a n d e d quickly i n t o t h e growing i n f r a s t r u c t u r e of s u r f a c e d r o a d s . F i g u r e 3.3 shows t h e substitution of u n s u r f a c e d by s u r f a c e d r o a d s . In 1 9 1 0 a b o u t 1 0 p e r c e n t of a l l r o a d s were s u r f a c e d , d u r i n g t h e 1 9 4 0 s a b o u t o n e h a l f , a n d today a b o u t 90 p e r c e n t are s u r f a c e d , so t h a t in r e t r o s p e c t t h e s u b s t i t u t i o n p r o c e s s l a s t e d l o n g e r t h a n 75 y e a r s . This i s a b o u t t h e same time c o n s t a n t as o b s e r v e d f o r t h e r e p l a c e m e n t of propulsion systems in t h e m e r c h a n t f l e e t a n d p r i m a r y e n e r g y s u b s t i t u t i o n in t h e United S t a t e s . P r o j e c t i n g t h i s s u b s t i t u t i o n p r o c e s s i n t o t h e f u t u r e i n d i c a t e s t h a t by t h e e n d of t h e c e n t u r y v i r t u a l l y a l l r o a d s will b e s u r f a c e d . T h e r e f o r e , w e c a n conclude t h a t t h e i n t r o d u c t i o n of s u r f a c e d r o a d s p r e c e d e d t h e i n t r o d u c t i o n of m o t o r v e h i c l e s in t h e United S t a t e s , b u t t h a t t h e f i r s t rapid-growth p h a s e of motor v e h i c l e f l e e t s o c c u r r e d while less t h a n o n e half of American r o a d s were s u i t a b l e f o r t h e i r use. I t i s a l s o i n t e r e s t i n g to n o t e t h a t t h e s u b s t i t u t i o n p r o c e s s d o e s not r e f l e c t t h e vigorous r o a d c o n s t r u c t i o n e f f o r t a f t e r t h e d e p r e s s i o n y e a r s in t h e United S t a t e s , b u t r a t h e r i n d i c a t e s a lack of s u c h e f f o r t d u r i n g t h e 1 9 1 0 s a n d 1 9 2 0 s b e c a u s e t h e a c t u a l e x p a n s i o n of s u r f a c e d mileage i s somewhat below t h e long-term t r e n d d u r i n g t h e s e t w o d e c a d e s . A s i m i l a r u n d e r e x p a n s i o n o c c u r r e d d u r i n g t h e e a r l y 1 9 7 0 s , b u t a p p e a r s to h a v e b e e n r e a b s o r b e d d u r i n g t h e last few y e a r s .

2 The growth of s u r f a c e d r o a d s mileage can be d e s c r i b e d w e l l w i t h a l o g i s t i c growth c u r v e t h a t h a s an i n f l e c t i o n point i n 1947, growth r a t e o f 7.63 p e r c e n t per y e a r , and a s a t u r a t i o n l e v e l o f 3 . 4 2 million m i l e s . T h i s i s i n good agreement w i t h t h e s u b s t i t u t i o n p r o c e s s of s u r f a c e d f o r o t h e r roads, g i v e n i n F i g u r e 3.3, b e c a u s e t h e t o t a l road mileage h a s remained a l m o s t c o n s t a n t during t h e l a s t 80 y e a r s .

1000 Units

F i g u r e 3.1 Number of C a r s , Buses, and T r u c k s .

Due to t h e obvious problems a s s o c i a t e d with t h e l a c k of h i s t o r i c a l r e c o r d s a b o u t t h e e x a c t number of horse-drawn v e h i c l e s in t h e United S t a t e s d u r i n g t h e f i r s t d e c a d e s a f t e r t h e i n t r o d u c t i o n of t h e automobile in 1895, w e c a n only a p p r o x i m a t e l y d e s c r i b e t h e assumed s u b s t i t u t i o n of h o r s e drawn v e h i c l e s by t h e m o t o r c a r d u r i n g t h e f i r s t , m o r e r a p i d , e x p a n s i o n p h a s e of t h e m o t o r v e h i c l e f l e e t s . A s a r o u g h

9

rural

Figure 3.2 Road Mileage in the United States.

f/( 1-f) fraction (f)

Figure 3.3 Substitution of Unsurfaced by Surfaced Roads.

approximation of t h i s s u b s t i t u t i o n p r o c e s s , we u s e t h e number of d r a f t animals a n d motor v e h i c l e s given in F i g u r e 3.4.

F i g u r e 3 . 4 Number of Non-Farm H o r s e s (and Mules) a n d C a r s .

Sometimes h o r s e a n d s a d d l e were used a s a "road vehicle", b u t o f t e n m o r e t h a n o n e h o r s e w a s used t o pull buggies a n d wagons, so t h a t F i g u r e 3 . 4 may o v e r e m p h a s i z e t h e n u m b e r of horse-drawn v e h i c l e s if t h e number of d r a f t animals i s used as a p r o x y f o r t h e number of v e h i c l e s a c t u a l l y in use. N e v e r t h e l e s s , w e will make t h i s assumption in o r d e r to analyze t h e p o s t u l a t e d s u b s t i t u t i o n p r o c e s s . F i g u r e 3.5 shows t h e s u b s t i t u t i o n of non-farm h o r s e s a n d mules by c a r s . Thus, w e implicitly assume t h a t t h e number of non-farm h o r s e s a n d mules c o r r e s p o n d s to t h e number of animal-drawn r o a d vehicles. C a r s r e p r e s e n t all r e g i s t e r e d m o t o r v e h i c l e s , omitting t r u c k s a n d b u s e s f r o m F i g u r e 3.1.

The d i s a d v a n t a g e of t h i s r o u g h comparison of n u m b e r s of animal-drawn v e h i c l e s a n d motor c a r s i s t h a t t h e e s t i m a t e s of t h e number of non-farm h o r s e s anci mules are c e r t a i n l y n o t v e r y a c c u r a t e a n d t h a t t h e y are unevenly s p a c e d in time. Thus, a n n u a i fluctuations of t h e a c t u a l number of d r a f t animals c a n n o t b e r e c o n s t r u c t e d f r o m t h e a v a i l a b l e h i s t o r i c a l r e c o r d s . Despite t h e s e d i s a d v a n t a g e s , F i g u r e 3 . 5 i n d i c a t e s t h a t t h e automobile r e p l a c e d h o r s e - a n d mule-drawn r o a d v e h i c l e s d u r i n g a r e i a t i v e l y

F i g u r e 3.5 S u b s t i t u t i o n of Non-Farm H o r s e s (and Mules) by C a r s .

s h o r t p e r i o d a n d t h a t t h e s u b s t i t u t i o n p r o c e s s p r o c e e d e d along a logistic p a t h . Motor v e h i c l e s a c h i e v e d a o n e - p e r c e n t s h a r e in r o a d v e h i c l e s s h o r t l y a f t e r 1 9 0 0 a n d a 5 0 p e r c e n t s h a r e in 1917. The complete t a k e o v e r of t h e "market" f o r r o a d v e h i c l e s ocs:lrred in 1 9 3 0 with 2 3 million cars in u s e a n d 0 . 3 million non-farm h o r s e s a n d mules. This r e s u l t i n d i c a t e s t h a t t h e inflection point of t h e s e c u l a r t r e n d of r e g i s t e r e d cars from F i g u r e s 3.1 a n d 3 . 4 a c t u a l l y coincides with t h e e n d of t h e s u b s t i t u t i o n of animal-drawn r o a d vehicles. This r e s u l t also e x p l a i n s t h e

" s a t u r a t i o n " of m o t o r v e h i c l e s in t h e United S t a t e s p e r c e i v e d by many a n a l y s t s d u r i n g t h e l a t e 1 9 2 0 s a n d e a r l y 1930s. However, t h e p e r c e i v e d s a t u r a t i o n of cars w a s a c t u a l l y t h e e n d of t h e s u b s t i t u t i o n of animal-drawn v e h i c l e s a n d t h e beginning of a new p h a s e in t h e motorization of America, with growth rates c o m p a r a b l e t o t h o s e of t h e expansion of h o r s e c a r r i a g e s a n d wagons b e f o r e t h e automobile a g e . S e e n from t h i s p e r s p e c t i v e , t h e growth in t h e total number of r o a d v e h i c l e s i s a continuous p r o c e s s without a n y p r o n o u n c e d c h a n g e s o v e r t h e e n t i r e p e r i o d from 1 8 5 0 to d a t e , with a n a v e r a g e a n n u a l growth rate of a b o u t 4.2 p e r c e n t . F i g u r e 3.6 shows t h e n u m b e r of non-farm h o r s e s a n d mules a n d cars from F i g u r e 3.4, t o g e t h e r with t h e e s t i m a t e s from t h e logistic s u b s t i t u t i o n model b a s e d o n a 4.2 p e r c e n t p e r y e a r growth of t h e "market" f o r all r o a d v e h i c l e s , while F i g u r e 3.7 shows t h e growth of all r o a d v e h i c l e s by summing t h e number of h o r s e s , mules, a n d automobiles.

Although t h i s r e s u l t s t r e n g t h e n s o u r working h y p o t h e s i s of t w o d i f f e r e n t p h a s e s in t h e dissemination of t h e automobile, i t is by n o means conclusive d u e to t h e r o u g h approximation of t h e number of r o a d v e h i c l e s d r a w n by h o r s e s a n d mules. I t should a l s o b e o b s e r v e d t h a t t h e smooth growth of all r o a d v e h i c l e s c o r r e s p o n d s well to t h e continuous growth of s u r f a c e d r o a d s in t h e United S t a t e s d u r i n g t h e last 8 0 y e a r s .

F i g u r e 3.6 Actual a n d Estimated Number of H o r s e s (and Mules) a n d C a r s .

By t h e time h o r s e s d i s a p p e a r e d f r o m t h e American r o a d s o n e haif of t h e r o a d s were s u r f a c e d a n d t h e r e a f t e r a n n u a l c o n s t r u c t i o n r a t e s of new s u r f a c e d r o a d s declined.

Thus, while t h e i n f r a s t r u c t u r a l c n a n g e of t h e American r o a d system took almost as long as t h e s u b s t i t u t i o n of m e r c h a n t f l e e t s a n d p r i m a r y e n e r g y , t h e s u b s t i t u t i o n of v e h i c l e f l e e t s was a much s w i f t e r p r o c e s s l a s t i n g only t h r e e d e c a d e s .

The n e x t example s e r v e s to v e r i f y t h i s r e s u l t by independent o b s e r v a t i o n s . F i g u r e 3.8 shows t h e p r o d u c t i o n of buggies (including c a r r i a g e s a n d sulkies) a n d f a c t o r y s a l e s of motor c a r s in t h e United S t a t e s . W e h a v e not e x t e n d e d t h e c u r v e s beyond 1 9 5 0 s i n c e t h e f a c t o r y s a l e s ( o r p r o d u c t i o n ) of motor v e h i c l e s cease to b e a good p r o x y f o r a c t u a l v e h i c l e s a l e s d u e to t h e emerging i m p o r t a n c e of imports.

Because of t h e s c r a p p i n g rates of r o a d v e h i c l e s , t h e two c u r v e s d o n o t e x a c t l y r e p r e s e n t "derivatives" of t h e a c t u a l number of r o a d v e h i c l e s in use. N e v e r t h e l e s s , t h e y e x h i b i t t r e n d s similar to t h e number of non-farm h o r s e s (and mules) a n d r e g i s t e r e d cars. In f a c t , t h e s e c u l a r t r e n d of motor car p r o d u c t i o n shows a n inflection d u r i n g t h e 1920s p r e c e d i n g t h e similar inflection in t h e growth of t h e automobile f l e e t by less t h a n t e n y e a r s . F i g u r e 3.9 shows t h e s u b s t i t u t i o n p r o c e s s in production of buggies, c a r r i a g e s , a n d s u l k i e s ( r e p r e s e n t i n g animal d r a w n r o a d v e h i c l e s ) a n d f a c t o r y s a l e s of m o t o r c a r s . This substitution p r o c e s s confirms t h e r e s u l t s from t h e p r e v i o u s example. Automobile m a n u f a c t u r e a c h i e v e d a o n e - p e r c e n t s h a r e in t h e p r o d u c t i o n of r o a d v e h i c l e s s h o r t l y a f t e r 1900, a 5 0 p e r c e n t m a r k e t s h a r e in 1 9 1 4 , and by 1 9 2 4 v i r t u a l l y a l l r o a d v e h i c l e s p r o d u c e d (i.e. sold) in t h e United S t a t e s were automobiles. Thus, t h e m a r k e t t a k e o v e r in p r o d u c t i o n p r e c e d e s t h e t a k e o v e r in t h e v e h i c i e f l e e t s by a b o u t s i x y e a r s . This may b e d u e t o t h e l o n g e r

- - - -

Figure 3.7 Actual a n d Estimated Number of Road Vehicles.

life s p a n of animal-drawn v e h i c l e s compared t o c a r s ; however t h i s is only a speculation s i n c e t h e s t a t i s t i c s a r e not available. The lag of a b o u t six y e a r s between t h e substitution of vehicle f l e e t s a n d vehicle production i n d i c a t e s t h a t t h e a v e r a g e a g e of a l l r o a d v e h i c l e s could h a v e been a b o u t s i x y e a r s by t h e 1930s, which i s in a good a g r e e m e n t with t h e a v e r a g e a g e of 5.5 y e a r s f o r cars (and 5.6 y e a r s f o r t r u c k s ) in 1 9 4 1 ( e a r l i e s t y e a r f o r which t h e d a t a were available, see Automobile F a c t s a n d Figures, 1971). N e v e r t h e l e s s , in both examples t h e major deviations from t h e logistic substitution p a t h s o c c u r toward t h e complete r e p l a c e m e n t of horse-drawn vehicles. In g e n e r a l , o l d e r technologies tend t o s e r v e r e c r e a t i o n a l o r a e s t h e t i c r o l e s o n c e t h e r e p l a c e m e n t i s complete. This w a s t h e c a s e with f u e l wood, sailing s n i p s , h o r s e s , c o n v e r t i b l e (open) c a r s , a n d many o t h e r exampies. Thus, i t i s c o n c e i v a b l e t h a t t h e d e p a r t u r e s of t h e a c t u a l m a r k e t s n a r e s from t h e i r logistic p a t h s could b e r e d u c e d toward t h e end of t h e substitution p r o c e s s by eliminating t h i s "non-substitutable" niche f o r o l d e r technologies from t h e analysis.

Given t h e p o o r quality of h i s t o r i c a l r e c o r d s , i t i s obvious t h a t t h e two examples give a c o n s i s t e n t d e s c r i p t i o n of t h e introduction of t h e automobiie as a n a l t e r n a t i v e t o o i d e r r o a d vehicles. F u r t h e r m o r e , Figure 3.10 shows t h a t t h e p r o d u c t i o n of a l l r o a d v e h i c l e s ( c a r r i a g e s , buggies, sulkies, a n d motor c a r s ) grew with a c o n s t a n t a v e r a g e annual growth rate of a b o u t 3.1 p e r c e n t between 1900 a n d 1950 without a c h a n g e in t h e s e c u l a r t r e n d .

F i g u r e 3.8 P r o d u c t i o n of Buggies ( C a r r i a g e s a n d Sulkies) a n d C a r s .

I t i s i n t e r e s t i n g t o n o t e t h a t by t h e time t h e automobile h a d s u b s t i t u t e d t h e horse-drawn v e h i c l e s (during t h e 1920s), fundamental technologicai c h a n g e s in p r o d u c t i o n had o c c u r r e d as well. These c h a n g e s were p r o b a b l y a n i m p o r t a n t f a c t o r in f u r t h e r diffusion of t h e automobile o n c e i t became t h e e x c l u s i v e means of r o a d t r ? . n s p o r t , by making i t m o r e r e i i a b l e , c h e a p e r to p u r c h a s e a n d maintain, and e a s i e r t o o p e r a t e .

- --

f r a c t i o n ( f )

F i g u r e 3.9 Substitution in P r o d u c t i o n of Buggies ( C a r r i a g e s and Sulkies) a n d C a r s .

1 0 0 0 u n i t s

F i g u r e 3.10 Actual a n d Estimated P r o d u c t i o n of Road Vehicies.

4 TECHNOLOGICAL CHANGES

I t is usually v e r y difficult t o distinguish between technological c n a n g e s in t h e production of motor v e h i c l e s a n d c h a n g e s in t h e vehicles themselves. These c h a n g e s went hand in hand: new design a n d p e r f o r m a n c e c h a r a c t e r i s t i c s imposed c h a n g e s in production a n d new production p r o c e s s e s made c h a n g e s in t h e v e h i c i e s possible. In 1914 when F o r d i n t r o d u c e d t h e moving assem'oly (by a n analogy t o t h e moving

"disassembly" in a Chicago s l a u g h t e r h o u s e ) , a b o u t as many horse-drawn vehicles were p r o d u c e d as automobiles ( s e e F i g u r e 3.8). Abernathy (1978) points o u t t h a t a n o t h e r t e n y e a r s went by b e f o r e techniques f o r t h e mass production of car bodies were r a p i d l y deveiopea. They couid not b e a p p l i e d successfully, in s p i t e of moving assembly methods, as long as wooden c o n s t r u c t i o n materials were used. A s if symboiically, wooden bodies were used in almost a i l models ( e x c e p t a few high-price vehicles) t h r o u g h o u t t h e 1 9 2 0 s a n d from t h i s point of view were no d i f f e r e n t from c a r r i a g e s . By t h e time t h e automobile became t h e main mode of r o a d t r a n s p o r t , major m a n u f a c t u r e r s were producing s t e e l bodies. This went hand in hand with t h e introduction of closed bodies t h a t depended upon a d v a n c e s in t h e widths and s u r f a c e finish of r o l l e d s t e e l , t h e development of welding technology, a n d new p a i n t s a n d painting methods (Abernathy, 1978).

Once t h e s e c h a n g e s were i n t r o d u c e d into t h e moving assembly, mass-production t e c h n i q u e s emerged a n d new methods of sheet-metal forming with p r e s s e s a n d welding were n e c e s s a r y . A moving assembly of metal bodies w a s b a s e d not on s h e e t - metal forming, b u t p r i m a r i l y o n machining o r metal removal, a n d w a s t h u s similar t o t h e f i r s t form of moving assembly f o r wooden bodies.

F i g u r e 4 . 1 shows t h e substitution of o p e n by closed c a r bodies. This substitution p r o c e s s c a n b e c o n s i d e r e d a p r o x y f o r c h a n g e s in production techniques a n d t h e r e p l a c e m e n t of wood by s t e e l in automobiles in t h e United S t a t e s . In 1915 closed bodies a c q u i r e d a o n e - p e r c e n t m a r k e t s h a r e in t o t a l production, only a y e a r a f t e r Ford i n t r o d u c e d t h e moving assembly. Ten y e a r s l a t e r 5 0 p e r c e n t of a l l cars were sold with closed bodies a n d by t h e middle 1930s t h e y were u n i v e r s a l , leaving only a small segment of t h e m a r k e t t o c o n v e r t i b l e s . All told, t h e diffusion of fundamental c h a n g e s in automobile manafacturing a n d design o c c u r r e d a f t e r most of t h e t r a d i t i o n a l r o a d v e h i c l e s had b e e n r e p l a c e d by automobiles a n d w a s concluded by t h e time o n e half of American r o a d s were s u r f a c e d .

Up t o t h e late 1920s most automobiles were l i t e r a l l y h o r s e l e s s c a r r i a g e s a n d p r o b a b l y did not need t o b e much more s i n c e , as s u c h , t h e y were i n h e r e n t l y s u p e r i o r t o c a r r i a g e s . However, t o a c q u i r e new c u s t o m e r s , o n c e t h e h o r s e had aimost d i s a p p e a r e d from American r o a d s , t h e automobile needed t o fulfill functions b e s i a e s individual t r a n s p o r t in t h e c r u d e s t s e n s e of t h e word. Epstein (1928) classified t h e p u r p o s e s f o r which automobiles were bought during t h e 1920s into f o u r main c a t e g o r i e s : t r a n s p o r t a t i o n s e r v i c e , s p o r t , p e r s o n a l possession, a n d s o c i a l p r e s t i g e . The fulfillment of t h e s e f o u r a n d p r o b a b l y o t h e r c r i t e r i a placed on t h e automobile implied t h e n e c e s s i t y f o r l a r g e improvements. Most importantly, t h e automobile had t o become e a s i e r t o u s e a n d m o r e r e l i a b l e . Both of t h e s e improvements were r e a l i z e d t h r o u g h technological changes. Reliability w a s a c h i e v e d mostly t h r o u g h b e t t e r m a t e r i a l s , design, and machining. Convenience, however, n e c e s s i t a t e d f u r t h e r changes: t h e e l e c t r i c s e l f - s t a r t e r , e l e c t r i c lights, low-pressure pneumatic t i r e s , closed, metal bodies, a n d s o on. I t a p p e a r s t h a t t h e p e r i o d s t a r t i n g in t h e l a t e 1920s marked a c e r t a i n tendency toward reconsolidation a n d i n c r e a s i n g

lo"

Figure 4 . 1 Substitution in P r o d u c t i o n of Open a n d Closed C a r Bodies.

homogeneity in t h e industry. While automobile design and prociuction methods v a r i e d widely d u r i n g t h e p h a s e of h o r s e a n d c a r r i a g e substitution, d u r i n g t h e 1930s most m a n u f a c t u r e r s a d o p t e d moving assembly methods and basically similar designs. Most of t h e "unconventional" v e h i c l e s d i s a p p e a r e d , including steam a n d e l e c t r i c cars. A t t h e same time, t h e "conventional" automobile a n d production improvements disseminated t h r o u g h o u t t h e i n d u s t r y , making p r c d u c t d i f f e r e n t i a t i o n n e c e s s a r y a s a r e p l a c e m e n t f o r genuine a l t e r n a t i v e s . Another way of p h r a s i n g t h i s new f e a t u r e of t h e automotive i n d u s t r y i s t h a t s u c c e s s f u l innovations disseminated r a t h e r quickly and o n c e a d o p t e d were improved r a t h e r t h a n r e p l a c e d by most firms as if t o r e d u c e t h e r i s k of making c h a n g e s which might not b e t o t h e c u s t o m e r ' s liking. Examples include t h e diffusion of four-wheel b r a k e s a n d low-pressure balloon t i r e s . In 1 9 2 3 a l i t t l e more t h a n o n e p e r c e n t of a l l new cars were o f f e r e d with four-wheel b r a k e s , by 1 9 2 7 t h e y were s t a n d a r d equipment on 9 0 p e r c e n t of new cars. In 1924 only a t e n t h of a l l t i r e p r o d u c t i o n w a s of t h e low-pressure balloon design. By 1926 balloon a n d t r a d i t i o n a l h i g h - p r e s s u r e t i r e s had a b o u t equal s h a r e s in t o t a l t i r e production. This shows t h e r a p i d diffusion of two important automobile improvements t h r o u g h o u t t h e i n d u s t r y d u r i n g t h e 1920s a n d , with a lag of a few y e a r s t o a d e c a d e , a l s o t h r o u g h o u t t h e automobile f l e e t . H e r e w e cannot analyze in d e t a i l a l l t h e c h a n g e s t h a t h a v e b e e n impiemented s i n c e t h e 1920s, b u t will r a t h e r c o n s i d e r t h o s e t h a t are documented a n d c a n b e empirically a s s e s s e d .

If w e n e g l e c t f o r t h e time being t h e r e c e n t use of e l e c t r o n i c s , most o t h e r f e a t u r e s of t h e modern automobile (including aerodynamic styling) were i n t r o d u c e d soon a f t e r t h e r e p l a c e m e n t of animal-drawn vehicles. However, t h e introduction of a new automobile component o r design c h a r a c t e r i s t i c usually p r e c e d e s by few d e c a d e s t h e widespread adoption of t h i s innovation b y t h e whole i n d u s t r y . Thus, many innovations t h a t were originally i n t r o d u c e d d u r i n g t h e e a r l y d a y s of t h e automobile did n o t diffuse t h r o u g h o u t t h e i n d u s t r y until t h e r e c e n t d e c a d e s .

F i g u r e 4.2 shows t h e s u b s t i t u t i o n p r o c e s s of t h r e e m a j o r t y p e s of transmissions in t h e United S t a t e s . The o l d e s t transmission, a l s o used in some of t h e f i r s t v e h i c l e s , i s t h e t h r e e - s p e e d manual g e a r box. In t h e United S t a t e s , t h e automatic transmission w a s basically t h e only a l t e r n a t i v e to t h e t h r e e - s p e e d manual g e a r box, mainly d u e t o t h e u s e of high t o r q u e a n d displacement engines. I n E u r o p e , d u e to d i f f e r e n t d r i v i n g conditions a n d g e n e r a l l y s m a l l e r c a r s , four-speed g e a r b o x e s were also common in t h e e a r l y d a y s of motor vehicles. Automatic transmission w a s in many ways s u p e r i o r to manual a n d c e r t a i n l y o f f e r e d more c o n v e n i e n c e t o t h e a v e r a g e motorist by simplifying t h e o p e r a t i o n of t h e automobiie. The f i r s t d e s i g n s f o r a n automatic transmission a p p e a r e d in 1904 in t h e United S t a t e s a n d E u r o p e . F r i c t i o n a l a n d c e n t r i f u g a l v a r i a n t s t u r n e d o u t n o t to b e v i a b l e a l t e r n a t i v e s a n d definitely n o t competitive with manual transmissions.

F i g u r e 4.2 S u b s t i t u t i o n in P r o d u c t i o n of Factory-Installed Transmissions.