When new technological developments have caused major market disruptions, it’s often the effect of combining several technologies that makes an innovation seem revolutionary rather than any single breakthrough innovation.
The iPhone, for instance, was such a disruptor, that contained numerous, mostly pre-existing, technologies, but when packaged as three devices into one in a relatively short period entirely disrupted the smartphone market.
Similarly, could the effect of combining the divergent innovations related to autonomous driving, electric powertrains, and mobile connectivity result in products that become more than the sum of their parts, to noticeably disrupt the automotive and, perhaps, other industries?
There are high barriers in the way of adoption of autonomous vehicle technologies, as well as electric vehicles, but one expert that attended a TSC organised workshop last month on self driving cars is optimistic that combining these technologies will be the ‘key enabler’.
Not forgetting that cars too are now becoming a mobile computing platform.
Business school curricula for market disruption will likely cite the Apple iPhone – a recent example of where incumbents failed to see, or rather decided to be blind to, an existential threat.
The case study could point to Nokia, the market leader in mobile phone devices at the time the iPhone was previewed in 2007. Likewise, Microsoft then held a near monopoly in the personal computing market.
Competitors publicly laughed at the iPhone thinking it an overpriced communication device, whereas it was actually a mobile computing device, that within 18 months or so entirely disrupted multiple overlapping markets, partly as it became a platform for an extendible ‘App’ ecosystem.
The case study will show how wrong even smart companies can be, in failing to consider beyond the next few months, and failing to see beyond their current world view.
The Wall Street Journal reported that between 2004 and 2007, Nokia outspent Apple on R&D by a factor of 9 ($22.2 billion vs. $2.5 billion) – but Apple’s research was focused on far fewer things.
The case study will also show how quickly markets can entirely change course. In 2007 the market leaders in Smartphones were RIM and Nokia. Fast forward five years and RIM was close to bankruptcy and in 2013 Nokia exited the mobile phone business.
Last July, the Secretary of State for Transport presented a report Action for Roads – A network for the 21st century outlining the government’s strategy for roads that included a promise to work to encourage the development and introduction of autonomous vehicles.
It also stated there would be a scoping study to look at the barriers to implementation and explore opportunities for UK trials.
Other parts of Government are intent on promoting Robotics and Autonomous systems as one of the ‘eight great technologies’ for driving UK growth.
Then, in last December’s Autumn statement George Osborne said the government will “ensure that UK industry and the wider public benefit from the development of driverless cars including a review, reporting by end 2014, to ensure the legislative and regulatory framework supports the world’s car companies to develop and test driverless cars in the UK, and a prize fund of £10 million for a town or city to develop as a test site for consumer testing of driverless cars”.
With the prize in mind, The Department for Transport in conjunction with the Department for Business Innovation & Skills and the Transport Systems Catapult ran a workshop in London on 14 February to discuss the design of this ‘driverless cars challenge’.
Over 80 stakeholders from sectors including local authorities, the insurance industry and the research community attended as well as representatives from The Treasury, Automotive Council and Technology Strategy Board.
The results will be analysed by the Government to produce the scope for the £10m driverless cars challenge which will be announced later this year.
Just yesterday, Michael Hurwitz (Director Energy, Technology & International at the Department for Transport) posted to his DfT Transport Futures blog – We are not condemned to a future of congestion, accidents and time wasting – that reviews some of the current UK based autonomous vehicle research, pointing to what he sees as an “inexorable, incremental appearance of ‘driver assist’”, and that “importantly, the UK is good at this kind of stuff, and has the potential to go further”.
Dr. Alexander Hars, of German software company Inventivio GmbH, was also impressed by the TSC/BIS/DfT workshop last month, and shared his thoughts on the event in a blog post titled United Kingdom prepares to play leading role in driverless car revolution.
According to Dr. Hars:
“The country which started the industrial revolution and the first revolution in mobility is determined not to sit on the sidelines as the next mobility revolution unfolds. The UK government wants to accelerate the adoption of autonomous vehicle technology and ensure that the UK plays a prominent role by establishing a UK city or region as a test and demonstration site for self-driving cars.”
“To start this process, it convened about 100 people in London in Mid-February to discuss the criteria for site selection. The city/region will be funded with £10M Pounds. The very efficiently managed workshop rapidly generated insights about success criteria for such sites.”
He also summarised the workshop discussions – including the state of autonomous vehicle technology, the importance of the speed of implementation and the legal issues.
Referring to the TSC supported LUTZ programme:
“Given that another project is already under way to implement 100 self-driving pods in Milton-Keynes between 2015 and 2017…, the UK might indeed achieve a critical mass to become a key player in this autonomous vehicle revolution.”
Perhaps inspired by the workshop, Dr Hars since published a paper Thinking outside the box that imagines the consequences of autonomous vehicle technology. In particular that it could be the ‘key enabler’ for widespread adoption of electric cars.
Autonomous vehicles, he asserts, could circumvent the most problematic disadvantage of electric vehicles, range.
According to Dr Hars, the increased popularity of car sharing could be a driver for autonomous vehicles since the main disadvantage of car sharing – getting to the next available car and restrictions on where it should be dropped off at the end of the journey – is obviated when the car is delivered and returned autonomously.
As Dr Hars foresees, “Anybody will be able to request an autonomous vehicle by phone or mobile app. Within minutes a car will arrive to pick up the passenger and drop him off at the destination, where the car will then be ready to service the next customers.”
Car sharing works best in urban areas where electric vehicle range is less an issue, and (because of likely better reliability and lower service costs), the economics should align.
Citing as an example the Transport Systems Catapult supported LUTZ programme, Dr Hars suggest that the first fleets with fully autonomous vehicles, “will appear in niche areas where it is easiest to control risk.”
Dr Hars suggest the auto industry will need to develop new vehicle platform from the ground up for fully autonomous operation, and as electric vehicles are inherently less complex and safer, plus the low cost of EV infrastructure in limited geographies, he suggests that, although autonomous cars need not necessarily be electric, such vehicles are “well suited to the first fleets of autonomous vehicles”.
Another advantage is a legal and insurance related one: self driving cars running on specified paths may not be required to meet the requirements of the Vienna Convention for traffic, that requires that every vehicle must be controlled by a driver.
Cars are a capital intensive purchase, and could also be regarded as a wasteful use of this capital considering the proportion of the time they’re actually in use.
Dr Hars picks out US Consumer Expenditure statistics for 2012 showing that US households spend, on average, more than 16% of their total household expenses on car-based transportation – but average utilisation rarely exceeds 6%.
A study of last year by Columbia University on the mobility patterns in Ann Arbor, a medium size city in Michigan with about 285,000 inhabitants, found that 528,000 local trips occur each day, with an average trip length of 9.3km and about 1.4 passengers per vehicle.
The study authors claim that a fleet of 18,000 autonomous vehicles would be sufficient to satisfy all the mobility demand and ensure no passenger would have to wait more than 60 seconds for a car – even during rush hours.
This translates into a reduction in the number of cars by almost a factor of seven.
The study also examined the use of light electric vehicles which , is claimed, would produce a further cost reduction of a factor of five.
As such, as well as encouraging a change in powertrains, Dr Hars also believes driverless cars will greatly reduce dependency on the car, and therefore reduce the need to purchase one.