Synergy is the Mother of Invention

By Peter Pham - July 4, 2012 | Tickers: BHI, GM, BA | 0 Comments

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One of the things that I am constantly in search of in my travels is the evidence of disruptive technology.  The single greatest example of the concept is the internet itself.  Never has something created so many new opportunities for so many in so short a period of time.  One could argue Guttenberg’s printing press and I believe that is close.  But while the printing press ushered in a new era of the potential for information sharing, it was still limited by the ability of people to travel and bring the ideas contained in those new books to some place new.  It was constrained by our ability to personally travel, which until the 20^th century was not liberated from the horse.  Transportation technology created in the 20^th century enabled the great movement of ideas to spread at speeds that were unheard of previously: the internal combustion engine begat the car, the truck, the airplane and changed the economics of trains. 

The telegraph began the reversal of this model and it culminates now with the internet and all of its evolutions and permutations thereof.  Now, the ability to share more than just a conversation over great distances enables all manner of new and interesting ways that people can communicate with each other that we couldn’t conceive of just five years ago.   Not only do we have the Library at Alexandria and the Oracle at Delphi at our fingertips we can share that knowledge and speak directly with the creators of it with all the effort of typing a short note.

And it’s utterly fantastic. 

But, as great as the internet is at bringing people from all over the world together, speeding up the gaps in the supply chain and revolutionizing the way we look at, digest and disseminate information it has done very little to change our transportation infrastructure, which is still being built and developed along 20^th century lines.  Moreover, our spirit of innovation in the area of transportation and energy usage is being guided along lines that have been decided for us by those that have proven inadequate to provide leadership in the most basic of functions, banking and finance. 

The world is intimately affected by the fault lines that have developed in the U.S. and European banking systems, which has propagated itself around the world causing instability, distrust, and, most importantly, has retarded the opening up of major potential stores of wealth and progress, i.e. emerging markets.  China along with much of the developing world has moved very tentatively toward open economies, currencies and finance systems for fear of the instability that could be visited on their societies.  The same processes are at work internally. 

In the U.S. aviation progress has been ground down to nearly a standstill as the F.A.A. combined with a degradation of the rule of law and contracts has stifled innovation such that the technology is still grounded in, at best, the 1960s.  Costs are astronomical, adoption of 60-year-old engine technology like fuel-injection goes nowhere as no one wants to be the first to have their part fail in the air and their company ground into dust by the F.A.A. and the resultant lawsuit(s). 

Passenger air travel costs are not being driven down by innovation.  The industry the world over suffers from costs that are rapidly becoming uneconomical.  Boeing (NYSE: BA) competes with Airbus to see who can tweak a 50-year-old design 1% every 10 to 15 years.  The 747 is finally being unseated after 40 years as fuel prices make it too expensive to put in the air at any price close to what the market will bear given the current airport terminal infrastructure. 

The hub and spoke model works brilliantly with larger aircraft.  But now that system is an albatross because the bigger the planes you put in the air, like the Airbus A380, the more dependent you are flying certain pre-determined routes, which may or may not serve the customers’ needs at ever greater minimum breakeven capacities.  This lack of innovation is part of the reason why the airlines either need a bailout every 20 years or so, or the industry suffers one bankruptcy after another.

So, as we continue to approach the event horizon of our liquid fuels problem, which is more of a function of price rather than supply, I look at the state of aviation and wonder what it will take to move things forward such that the infrastructure can change.

Why can’t we envision air travel working similar to, if not in scope but in concept, to our ground transportation model?  The answer is we can’t with current designs and under current commercial aviation regulations, which have the effect of keeping general aviation on the fringes of the economy, a hobby for those with the passion but not the means to ever break out of a regulatory ghetto erected in the name of safety or worse, just good ol’ fashioned corporatism.

The most promising thing I’ve seen is a concept called Synergy, an aircraft that combines a number of physics concepts that will make your eyes glaze over, but not the overall effect.  According to the designer this is an aircraft that can change the economics for aviation not 1% or 2% but by 1000%.   In shipping, if you could magically reduce the drag on an oil tanker by 1% it would save the world billions of dollars per year in fuel costs and it is why surface modification of ship hulls gets a tremendous amount of research into low-energy coatings.  Friction reduction is something that everyone from GM (NYSE: GM) to Baker-Hughes (NYSE: BHI) wants.  If the energy needed to recover the fuel from the ground continues to rise then using that fuel more efficiently by reducing the loss due to friction improves those economics. 

The same problem applies in aviation.  Fuel efficiency with current designs is only achieved through special-purpose, non-practical airplanes.  Synergy, if it achieves even half of its promise in terms of energy efficiency, comfort and safety, would create a radical shift in aviation economics, bringing small-scale flight economics down to levels that could put serious pressure on the current hub and spoke model and free the skies up to a myriad of new and interesting solutions.  In essence, Synergy can change the way we think about regional travel the same way that the internet is changing the way we think of information.

The entrenched bureaucracy and paranoia that exists in the U.S. will likely mean that the implementation does not happen there, but in the same way that wireless communication is speeding up the connection of the third world to the first world, air travel that has economics similar to that of ground transport could have a similar effect on developing regions.

When you combine this with the coming manufacturing revolution represented by 3D printing and localized production the adverse effects of globalization can be minimized.  Synergy would not even be possible without the disruptive technology of the internet.  Their use of Kickstarter, the crowd-sourcing site, is the last mile effect of the internet on its design and progress to this point.  It couldn’t have gotten this far without a passionate community for the designer to bounce ideas off of and solicit assistance and funding from. 

Like the name of the airplane itself, it is the admixture of all of these disruptive technologies: the internet, wireless communications and the microprocessor (to name just three) that have reshaped the world in ways that individually they could never have. 

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