Trevor McKendrick, Lambda School’s Chief of Staff, writes a great weekly email newsletter called “How it Actually Works”. If you’re not subscribed, you should definitely consider checking it out.
This week he wrote about a book he’s been reading called “The Box”, which is about the transformative impact of shipping containers. The shipping container was a simple idea, but had a profound impact on the world’s economic infrastructure and our way of life. Trevor compared it to the internet, another transformative piece of infrastructure, but the insights from the book really apply to any new technology that improves economic efficiency fundamentally –– including autonomy.
Since I’m thinking about autonomy all the time these days, I thought the newsletter did a good job of summarizing some what we can expect as this technology is deployed across the world. Here’s the relevant part of the email:
Hi all,
I’m been reading The Box, a book about how the shipping container changed the world.
The quick summary is that by standardizing the shipping container, freight costs were reduced by many orders of magnitude, creating entire new industries and destroying old ones.
I noticed a few interesting similarities between the shipping container & the Internet:
First, it took an entire generation for the full effects to be played out. Whole industries had to change how they did business to fully take advantage of the container.
Second, by decreasing the cost of shipping freight, the container reduced friction between buyers & sellers throughout the entire world. Suddenly local manufacturers weren’t limited to selling only to other locals, and the manufactures didn’t have to be physically near their suppliers or customers.
This helped created the modern supply chain, where manufactures use the best source of labor & raw materials anywhere in the world instead of what’s closest.
Third, the decrease in friction led to new types of transactions. In the 1950s it wasn’t normal to be able to buy, say, Korean goods in the middle of Kansas. But with less friction, suddenly new types of offerings were available because the supplier could afford to ship their product to totally new customers.
The overlap of these three points with the Internet is easy to see. The difference is that the degree of change enabled by the Internet will be many orders of magnitude larger than the shipping container.
For example:
–– It will take hundreds of years for the total impact of the Internet to play out.
–– The amount of friction removed is probably 1,000x more than the impact of lower freight costs.
–– There are untold new types of transactions enabled by the Internet (you’re reading one of them right now)
I’m working on a longer post that examines the effects of reduced friction from other industries and uses them as a lens to think about the upcoming changes enabled by the Internet.
The effects of the Internet are still under appreciated and I want to explore that.
Have a great week!
Trevor
How It Actually Works
If you’re interested in reading more, go pick up a copy of The Box.