• Satya Ramamurthy, Partner |

Alvin Toffler, an American futurist, has called technology the great growling engine of change. That sentiment sits well with the growing excitement around autonomous vehicles (AVs). As the technology matures, and self-driving trucks roll through the mining fields in Australia, the future of mobility is here. But what does it mean for the labour market?

Trials throughout the Asia Pacific (ASPAC) region show promise, with some countries at the forefront of this revolution. Chinese tech companies, such as Baidu, are taking the lead. The company sits in the middle of an ecosystem of partnerships across the region with activities such as testing 40 vehicles with passengers in Beijing.1

Singapore has recently started testing driverless vehicles at an airbase.2 The city-state has expanded AV testing to cover all public roads in western Singapore and will serve three areas with driverless buses from 2022. In fact, Singapore topped KPMG’s third Autonomous Vehicles Readiness Index (AVRI) in 2020. The report outlines AV's progress in 30 countries and jurisdictions across 28 measures.

At KPMG, we believe that the transformational potential of AVs in ASPAC is immense (seven of the 30 countries and jurisdictions covered by the index are in Asia Pacific). AVs are an increasingly viable alternative to move people and goods around. How will the trajectory of AV adoption play out in the region?

Electric vehicles (EV) and AV adoption intersect

A lot of what we think will happen in the AV space will transition through the electric vehicle (EV) journey. Due to a growing focus on achieving emission targets, countries are focused on decarbonization in the transport sector, which accounted for one-fourth of global greenhouse gas emissions in 2019.3

The EV momentum is picking up in ASPAC, driven by governments and corporates alike. The technology is not perfect yet – the autonomy components for self-driving vehicles can drain car batteries, which can be problematic for long rides. Still, research shows that although the initial self-driving cars on the road may well be hybrids, electric battery-powered AVs are a real possibility.

AV policy solutioning must have a local context

AV solutioning is about building a transport system – buses, delivery vehicles or warehouse vehicles – which can function within an ecosystem. Such solutioning will require partnerships between public and private sectors, and even among countries. But policies will need to be driven by the local context.

Ultimately, we believe the labor market dynamic will be key to adopt this alternative transportation mode quickly and smoothly. The question that policymakers should ask is, where do AVs fit in the employment landscape?

The workforce in some countries may be reluctant to take on jobs such as driving buses or trucks. Self-driving vehicles are a natural fit for such jobs in these economies. Or, there could be a shortfall of workers in a particular industry or region, and even workforce safety considerations. For instance, Australian mining companies are using various levels of AVs in mines to reduce risk and make mining safer. In this case, both labor shortages and safety standards play a role in the adoption of AVs.4

The ride-hailing industry is an example of where such challenges could play out. In many countries, the taxi industry is a vital employment provider. Resistance to any move that could result in drivers being replaced with self-driving cars is likely and will be an important future conundrum for transport policymakers.

Fundamentally, governments will have to consider the potential impact of AV-related policies on the labor market. Will there be a large pool of workers displaced? If so, then how can they be retrained? Therefore, careful long-term planning will be important to ensure that the journey to introducing AVs is smooth.

KPMG is tracking AV adoption across 30 countries. Read the full report.

  • Satya Ramamurthy

    Satya Ramamurthy

    Partner, Global Co-Head of Public Transport, Head of Infrastructure, Government & Healthcare and Head of Strategy, Advisory, KPMG in Singapore

    Blog articles

Stay up to date with what matters to you

Gain access to personalized content based on your interests by signing up today