If automation and electrification in your business could reduce carbon emissions and increase savings by nearly 50%, would you do it? Probably. What if it meant wiping out a quarter of your available jobs? That’s a more complex conversation.
Recent research published by Daniels professor Murat Kucukvar explored that exact scenario, looking closely at carbon emissions, employment and the cost of moving to automation and electrification in the trucking industry. Kucukvar’s research team dove into the social considerations that come with new technologies, identifying what managers need to consider when making large strategic changes that impact employment.
Kucukvar spoke with the Daniels Newsroom to share more about the timely research and how it will impact the broader business landscape moving forward.
What sparked your interest in this topic?
The transportation sector is at the forefront of technological transformation, especially with the introduction of autonomous and electric vehicle technologies. What sparked our interest is the multifaceted impact these innovations can have on the trucking industry—a key pillar of both the economy and logistics. From an environmental standpoint, the potential to significantly reduce carbon footprints is promising, aligning with global sustainable development goals and net-zero targets. However, these advancements come with substantial social and economic implications, particularly in terms of employment.
The risks associated with widespread automation, such as job displacement, were a crucial concern that motivated us to explore the balance between improved operational efficiency and potential social disruptions. The economic impact, including cost savings for businesses and the broader supply chain, needed to be examined alongside these social risks. We wanted to assess how stakeholders—ranging from truck drivers to logistics companies—could manage these transitions, especially when it comes to retraining and redeploying the workforce in the face of automation. This complex interaction between environmental benefits, economic efficiency and social consequences made the topic a compelling research focus.
How did you approach this research? Where did you gather information?
We utilized a comprehensive life cycle environmental, economic and social sustainability assessment approach, combining life cycle assessment, cost analysis and multi-regional economic input-output analysis. This allowed us to assess not only the environmental but also the economic and social impacts of autonomy and electrification in the trucking industry. Our data was sourced from a wide range of regional and global databases related to vehicle manufacturing, fuel consumption, employment statistics and emission factors. This helped us build a robust model to predict outcomes such as carbon emissions, life cycle costs and employment changes.
What were your primary takeaways?
Our research revealed that combining autonomy and electrification in the trucking industry could lead to a 50% reduction in carbon emissions and 46% savings in life cycle costs. However, autonomy alone could result in significant job losses—around 27%—due to increased efficiency and the elimination of driver positions. This highlights the need for a balanced approach that considers not only environmental and economic benefits, but also the social impacts, particularly on employment.
How does this apply to the broader business ecosystem?
The insights from our research underscore the broader dilemma many industries face when adopting new technologies: the tradeoff between economic, social and environmental pillars of sustainability. For businesses, particularly in sectors like transportation, the integration of advanced technologies like autonomy and electrification offers clear economic benefits—reduced operational costs, improved efficiency and long-term savings on energy and maintenance. However, these economic gains often come at the cost of significant social impacts, such as job displacement and the need for workforce re-skilling.
Environmental benefits, such as a 50% reduction in carbon emissions, are essential for meeting environmental sustainability targets and regulatory requirements. However, achieving these reductions can lead to the loss of jobs due to automation, as we observed with a projected 27% decline in employment in the US trucking sector. This demonstrates that while businesses might cut costs and greenhouse gas emissions, they must also grapple with the societal consequences of technological advancement.
The broader business ecosystem can take a lesson from these findings: Technological transitions are not just a matter of economic efficiency or environmental responsibility, but require a comprehensive strategy that includes social resilience. Companies should proactively implement up-skilling and re-skilling initiatives, collaborate with educational institutions and engage in transparent communication with their workforce to manage these tradeoffs effectively.
What should managers across industries understand about the research findings?
Managers need to understand that technology adoption, while beneficial for cost savings and sustainability, requires thoughtful planning to address its broader implications. Managers should prioritize re-skilling and up-skilling programs to ensure their workforce can transition smoothly alongside technological advancements. In essence, balancing environmental, social and economic goals will be critical for long-term success.
What opportunities for further research could come from this?
One critical area is the exploration of the resource dependencies associated with electrification and automation, particularly the reliance on rare earth metals and other critical minerals. As the adoption of electric vehicles and autonomous technologies grows, so does the demand for materials like lithium, cobalt and nickel, which are essential for battery production and other key components. This raises concerns about the environmental and social implications of mining these resources, including environmental degradation and potential human rights violations in mining regions.
Future research could investigate the full life cycle sustainability impact of rare earth metals, from extraction to disposal, and explore ways to mitigate the risks associated with supply chain bottlenecks and geopolitical dependencies. The increasing reliance on these materials also brings economic risks, such as price volatility and resource scarcity, which could affect the scalability and sustainability of electrification efforts. Research into alternative materials and recycling strategies for batteries could help reduce dependence on these critical minerals.
Long-term studies could focus on how businesses and policymakers can balance the environmental benefits of these technologies with the social and economic risks tied to resource use and employment shifts. By addressing these broader issues, future research can contribute to a more sustainable and equitable transition to advanced vehicle technologies.
This is an excellent work and very relevant, thanks for sharing Dr. Murat.