Telecommunications usage has caused growth and structural change in the economy, which in turn have led to growth in the use of transportation.
We explained in an earlier section of this report that travel savings are not the usual motivation for the implementation of teleprocesses but that travel saving could sometimes be a result. In this section, we focus on the economy as a whole and show how teleprocesses act to increase the use of transportation in the economy through restructuring that requires more movement of people and goods. These effects are related to but distinct from the geographic dispersion effects described in the previous section.
There are two underlying economic mechanisms: qualitative and quantitative. Qualitatively, telephenomena drive economic restructuring. Quantitatively, telephenomena drive economic growth. Both the qualitative effect of restructuring and the quantitative effect of growth stimulate higher levels of trip making.
The growing dependence of American business on telephenomena is shown by Morgan Stanley calculations that information technology capital as a share of total industry capital across the combined manufacturing and service sectors has grown from 4% in 1960 to 14% in 1991 (Roach, 1993).
Examination of national economic data by DRI/McGraw-Hill and Parker Telecommunications has demonstrated that telecommunications investment causes economic growth (Cronin, 1991) and productivity improvement (Cronin, 1993). The authors of the latter study calculated that, over the period 1963-91, the portion of total economy-wide productivity gains attributable to advances in telecommunications averaged 25%.
The economic growth stimulated by telecommunications investment causes more use of transportation as the production and delivery of goods and services increases. For example, the vehicle miles traveled by single-unit trucks with more than four tires rose 4.1% annually in the period 1982-89 (Davis, 1992, p. 3-40). Economic growth in turn causes further growth in telecommunications investment, and the cycle continues (Cronin, 1991).
Productivity improvement leads in the long run to personal income growth. To the degree that a telecommuter, for example, consistently gets more work done in the same number of working hours, the employee and the organization perform better and incomes increase. Higher household incomes lead to more consumption of transportation, as seen in Exhibit 2-12. This graphic shows household spending for transportation and all telecommunications, including computer hardware and television. Spending is much higher for transportation; at the same time, elasticity of demand as personal income rises is higher for transportation than for information technology.
Telecommunications and teleprocesses also create structural changes in the economy that lead to more use of transportation. The most important of these are a more rapid pace of activity and increased pressure for improved performance.
Companies tend to move faster in the face of competition coming from all directions. The time it takes to bring a product to market is critically important to the product's life-cycle profitability. Telecommunications-based service processes can start sooner and be completed faster, which is valued by customers. Telecommunications (including e-mail, voicemail, portable computers, and cellular phones) establishes a faster rhythm. As noted by Alvin Toffler (1990), because of telecommunications and computers, the most modern, competitive societies are moving faster than the rest. He writes, "In fast economies...[the] pace is determined by the speed of transactions, the time needed to take decisions (especially about investment), the speed with which new ideas are created in laboratories, the rate at which they are brought to market, the velocity of capital flows, and above all the speed with which data, information, and knowledge pulse through the economic system" (Toffler, 1990, p. 397).
One manifestation of a faster economic pace is the change seen in manufacturing. This sector is being restructured in response to technological innovation, competition, and rapidly shifting consumer demand. The new manufacturing models are information intensive and depend on more predictable flows of supply inputs and product outputs. These changes hold major implications for transportation and energy policy makers.
In the new manufacturing model, mass production of standardized products is giving way to shorter production cycles of customized products at higher levels of quality. In the new manufacturing model, productivity gains result from the introduction of information technology that supports every aspect of the production process, from product design to timely product delivery. More workers are information specialists involved in pre- and post-production functions. Fewer actual shop floor workers are needed. They too are information workers, as increasingly their job is to monitor computer-guided machinery.
In manufacturing today, the timing of production inputs and outputs is increasingly critical. Time-sensitive operations are called "just-in-time" (JIT). In JIT manufacturing, customer orders, rather than market demand forecasts, determine production schedules, which in turn dictate supply schedules. Parts flow to production facilities and products to customers on a just-in-time schedule. Inventory management in JIT manufacturing substitutes electronic supply ordering for parts on a warehouse shelf. Suppliers may produce and deliver parts as they are needed in response to automatic messages from the manufacturer's production information system. For example:
"Four or five times a day, employees at Dana Corporation, a $5 billion automotive-parts supplier based in Toledo, Ohio, dial into an IBM mainframe at Ford Motor Company in Dearborn, Michigan. Their mission: find out whether they need to ship more automotive parts to Ford. Dana employees--schedulers and material managers--call up a menu listing the parts they regularly supply to Ford and start checking. Is Ford experiencing any parts shortages?" (Alter, 1993).Just-in-time manufacturing has an important effect on transportation demand. Since JIT requires a continuous flow of inbound supplies to support a continuous flow of products out, the transportation patterns it produces are fundamentally different. Rather than large, infrequent delivery of parts by tractor trailer or rail car, parts are more likely to arrive frequently by small trucks and vans. Product shipments will also decrease in size and increase in frequency. At the same time, this dynamic tends to cause suppliers to locate facilities closer to their customers.
A more rapid pace of activity leads to increased pressure on people to use time more efficiently. Saving time is sought in all activities, including more single occupant vehicle use and overnight package delivery, both of which consume more energy than slower modes. Jumping into one's car and driving solo to the office or to an off-site meeting usually takes less time than waiting for the bus or coordinating a shared ride with a co-worker.
At the same time, workers are under pressure to do their usual job plus the job of a laid-off co-worker. Employer expectations for greater productivity, fewer errors, and speedy outcomes are higher. This seems to be translating into longer working hours. Juliet Schor (1992) writes, in The Overworked American, about the increasing number of hours spent on earning and spending and the decline in time spent around the home. She estimates that the average employed person worked 163 hours more in 1987 than in 1969, or the equivalent of one month more per year. Workers are spending more hours per week and more weeks per year on the job--sometimes on two or more jobs.
More time is also spent in job searches and in waiting for a call to work as the economy shifts to a worker-on-demand model. U.S. firms are placing increasing reliance on contract employees. Every day, 1.5 million temporary employees report to work, mainly doing work that used to be done by regular, full-time employees. The largest private employer in North America is the temporary help company Manpower, Inc., with 560,000 workers. Manpower Chairman Mitchell Fromstein says that "The U.S. is going from just-in-time manufacturing to just-in-time employment" (Castro, 1993).
As families spend more time working, less time is available for family and personal activities, including normal household work such as preparing meals and washing clothes. Travel data indicate that busy families compensate for the lack of home time and human energy by reducing their household labor and purchasing outside services. This is reflected in the rapid growth of trips that fit the category of "other family and personal business." Both average annual vehicle trips and vehicle miles traveled for this purpose more than doubled from 1969 to 1990 (Pisarski, 1992).
Commonplace consumer services delivery to homes in new ways via telecommunications offers some potential for working families to save time in the responsibilities of everyday living and to eliminate some trips as well. Renewing driver and pet licenses, interacting with the bank or an insurance broker, attending an evening training seminar, participating in job interviews, locating a new house or apartment, and even selecting groceries for delivery could potentially emerge as common uses of an interactive, broadband National Information Infrastructure reaching into millions of homes (Hadden, 1993). Whether the expansion of knowledge, choices, and relationships from such a telecommunications capability expands travel demand for purposes not served by network use is unclear.
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