I was reading my morning paper, and had just noted a headline reporting that Northwest had followed rival Delta by abolishing commissions to travel agents, when my wife interrupted me to report on her cell phone research.
Yes, we are thinking about taking the plunge and acquiring cell phones.
My wife is an efficient comparison shopper and had taken the time to scope competing packages. The best alternative, she reported, was one where we get two phones with substantial local and long-distance minutes for $60 per month. That is a lot of money, but the long-distance minutes in this plan are more than we currently use, so we could drop our current long-distance provider entirely.
Our conversation ended and my eyes returned to the story about how the end of airline commissions would affect travel agencies.
But it suddenly seemed clear that there was a link between the cell phone discussion and the plight of travel agencies.
Shades of Abbot and Downing, I thought — technological change is on the rampage again!
Who were Abbot and Downing and what do they have to do with cell phones and travel agents?
Abbot and Downing manufactured the famous Concord stagecoach seen in countless western movies.
In the 1880s, they were one of the largest employers in New Hampshire. By 1900 they were virtually out of business. Like travel agents and people who work with wire telecommunications, their world was turned upside down by technological change. This can happen to nearly anyone, and we better get used to it.
The Concord stagecoach was a marvel of engineering, built by skilled craftsmen. Abbot and Downing’s wheelwrights, woodworkers and blacksmiths had to combine their skills to turn out coaches that were light, strong and durable.
In the 1870s and 1880s, when the U.S. population was moving west of the Mississippi, Abbot and Downing could hardly produce the wagons fast enough. Trains would leave Concord with 10 or more flatcars filled with coaches.
But by the mid-1890s, sales had slowed to a trickle. Railroads had reached most important destinations and fewer coaches were needed. Streetcars and interurban trolleys were displacing horse transport in urban and suburban areas. With the advent of the automobile after 1900, Abbot and Downing passed into obscurity. Technological change had done in the entire stagecoach and carriage industry in a decade.
The travel industry is similar. Few travel agents existed prior to World War II. Few people had the funds to travel for pleasure, and most travelers went by train, buying their tickets at railroad depots. Travel agencies served a well-to-do minority. But with widespread prosperity in the 1950s and the rapid diffusion of air travel, agencies boomed. Planning a low-cost and time-efficient trip required mastery of the huge Official Airline Guide. Airlines paid commissions to travel agents, so the consumer saw no up-front cost for the agent’s expertise.
This continued with the introduction of mainframe computer-based reservations systems in the 1960s. Only airlines and larger travel agencies could afford the upfront costs of computer terminals to access Sabre and other reservation systems.
In less than 10 years, the Internet has turned things on their head.
Over half of airline tickets reportedly still are sold through agents. But people increasingly are using Internet-based services to do what only a trained and experienced travel agent could do 20 years ago. Some people will be willing to pay themselves for travel agents’ expertise and assistance. But the industry as a whole seems doomed to shrink, just as the stagecoach industry did a century ago.
Interlinked computers and modern software are slowly erasing a sector of commerce that thrived for 50 years. Wire telephony faces the same fate. My cousin and my wife’s father both learned the intricacies of installing and repairing electromechanical telephone switchgear in the late 1950s. Both are highly skilled technicians, and one is retired while the other will retire soon. But the electromechanical switchgear they spent years mastering, and that frequently required their maintenance and repair, went out the door 20 years ago. In another 10, most of the copper wire will be gone, too. There will still be telecommunications technicians, but many fewer of them relative to the volume of calls than just a few years ago.
The lesson? Technological change can change the job market for specific skills in a matter of a few years. Workers need to be psychologically prepared for the fact that skills learned just after high school may not earn them a living through to retirement.
© 2002 Edward Lotterman
Chanarambie Consulting, Inc.