Driving A New Narrative
As the 2016 North American International Auto Show (NAIAS) kicks into high gear, with media days happening now, it’s perhaps not surprising that my Facebook, Twitter, and Instagram feeds are full of automotive-related updates. I did, after all, spend a lot of time in the auto industry and many of my connections work for auto manufacturers, suppliers, or as journalists or bloggers covering the industry. It only makes sense that I’d see a lot of news from NAIAS this week.
What some might find unusual or unexpected is that this is the second week in a row that my feed’s been dominated by automotive news coming out of a trade show. Last week, as everyone in the tech and electronics industries knows, was the annual Consumer Electronics Show (CES) in Las Vegas. Formerly dominated by advanced technology and electronics companies showing off the hottest and latest gadgets and tools that would make our lives if not easier then certainly much cooler, CES has become what Engadget calls “the high tech auto show.”
CES 2016 featured major announcements, displays, or reveals from Chevrolet, Volkswagen, Mercedes-Benz, General Motors, Audi, Toyota, BMW, Volkswagen, and Ford, among others. It was even the site of the birth of a new electric vehicle company, Faraday Future, which aims to build an all-electric lineup of some of the most technologically advanced vehicles ever made. Indeed, the International Business Times gushed that “CES 2016 was as much a car show as a technology show” — and they were right. Technology publications like Wired and The Verge covered automobiles or automotive solutions as the lead stories from the show, and are even positioning CES as a more important auto show than even the industry ‘grandaddy,’ the Detroit show. Cars, it would seem, have arrived as technology drivers (ba-dum-bum).
For people who aren’t in the auto industry, this technology leadership from automotive feels like a sea change. Most of the articles in the tech media certainly have the tone that this is new ground for automakers and their industry. It’s fair to say that the automotive industry, most prominently the U.S. “Big Three,” has a reputation among many as a slow, “old-school” industry that is behind the times; this reputation is held especially among those who work in or report on the technology industry. Technophiles certainly aren’t used to looking to Detroit, Tokyo, or even Germany for the newest, most intriguing advances in the business.
But many of those who work in automotive would argue that automotive has been among the world’s technology leaders for a long time, and it’s the world catching up to that fact rather than automotive catching up to the world that is driving all this newfound attention. The auto industry has been the leading user of computer chips in the United States for at least a decade and a half. The automotive industry would suggest that its demands have spurred development of semiconductor chip technology, haptics, and even the science of enabling connectivity.
It’s not new for auto manufacturers to be present at CES, even for the Detroit Three; General Motors’ then-CEO gave a keynote at the 2008 show, while Ford’s CEO keynoted 2010 — but those appearances didn’t drive the kind of buzz that has come in 2015 and 2016. And major manufacturers have been scrambling since the late ’00s to out-do each other in integrating in-vehicle entertainment technology. Since at least as far back as my first year in automotive in 2007 — and very likely well before that — communications pros working for the automakers have struggled to gain acceptance for the narrative that the auto industry are leaders, not laggards, when it comes to advanced electronics and technology. But as we’ve seen, the hot story this year — and even in 2015 — is that the biggest and most interesting advances are happening in cars. Obviously, there’s something different in the air when it comes to the automotive industry, technology, and perceptions of innovation.
So what is it? Why has the narrative automakers have been trying to sell for years suddenly taking hold? Why have cars become the device of choice for many technology companies to develop to? Why has CES, long the domain of technology and electronics companies, suddenly been proclaimed an auto show? Have the automakers’ communications departments just suddenly gotten that much more sophisticated? Perhaps — but they also have some powerful new story elements at their disposal.
Obvious Change For Literally Everyone
First and foremost, the automobile is the most overt demonstration of the applications of technology. Most American households — 95%, in fact — own a car. Those that don’t own one certainly have ridden in one. It’s one of the most relatable places to notice the changes due to new technology. But there’s a key difference in how the technology in automobiles is being applied today. Until recently, technology has been applied to improve the existing in-vehicle experience. But now, technology is being applied to change the paradigm and create a new in-vehicle experience.
Autonomous vehicles (or “driverless” if you like) would change everything you know or have ever experienced about being in a car. Many of the major manufacturers, from Mercedes to Volvo to Ford, announced concrete plans for autonomous vehicles. General Motors is even making a $500 million investment in Lyft to develop and build a fleet of driverless cars. When you’re talking about really building the vehicles and technology that have only been the realm of science fiction for generations, you’re going to get attention. Technology has allowed such a broader storytelling that even people who don’t love cars can understand the new possibilities.
Smart mobility also promises to change the car experience as we know it. New technologies will will give car owners and passengers the ability to tailor their in-car experience with personalized, customizable dashboards, connectivity to their smart homes, and entertainment or information apps. Getting in your car once meant a welcome getaway from the rest of your life; a generation later, it became an unwelcome disconnect from the rest of your life. Now, the technology exists to make the car a seamless extension of not just the rest of your life, but of your individual personality. That changes the experience for good. Communicators, whatever their medium (traditional media relations, advertising, digital and social content, etc.), have always thrived on telling a great story — and thanks to the technology that they’ve helped drive, there’s a much sexier story to tell.
New Industrial Partnerships Are Driving Faster Innovation
But it’s not just the technology that’s driving this narrative, it’s the partnerships; it matters who the industry is working with. The automotive industry is notoriously insular, both in terms of personnel and development. Few industries have demonstrated such stubborn self-dependence and belief in their own ability to solve problems or innovate. This has been both to automotive’s benefit, and then over the last 25 years to its detriment. Outsiders don’t often get access to automotive R&D; even within the industry, companies’ development plans are closely guarded secrets divulged on a need-to-know basis. This insularity has led to, at best, perceptions of the industry as tired laggards who wouldn’t know the cutting edge if they fell off it; at worst, this industrial xenophobia has stifled innovation and prevented more dramatic advances in everything from cleaner technology to entertainment.
By 2016, however, the automakers have figured out that technology is moving faster than most any industry other than high tech can keep pace with. They know what’s possible, but they are willing to acknowledge that they can’t execute these changes on their own — or if they could, it would take much longer than the market wants to wait. So they’ve come off of their island and have reached out to the technology industry for partnerships to drive them both forward.
I’ve already mentioned GM’s partnership with Lyft. Ford has announced a partnership with Amazon on smart mobility. Toyota has hired Google’s former head of robotics. Volvo is working with Apple on CarPlay and with Ericsson on intelligent HD streaming into the vehicle. Automotive suppliers like Continental AG, Robert Bosch, ZF and LG Electronics are partnering with Google on autonomous vehicle technology. Volvo, Mercedes-Benz and others are working with Nvidia Corp , a Silicon Valley chipmaker. Rumors continue to fly that Google and Ford are contemplating a partnership.
These are some of the technology industry’s sexiest names and most innovative companies. By fully embracing partnerships with an outside industry for the first time at such magnitude, automakers get access to some of the leading engineering and technical minds to be found anywhere. Better yet, embracing these new technology partnerships has opened up a new communications narrative that allows the automotive companies the ability to credibly and demonstrably position themselves as at the forefront of innovation in any industry. If you want to find the most exciting things happening in any industry, they can say, look to us. We’re going to make the next generation’s life experience as different from today as anyone in business. The coolest new smart device you can buy won’t be a smartphone, a tablet, a virtual reality device, or anything wearable; instead, it will be your vehicle.
For their part, consumer technology companies get access to a virtually ubiquitous platform on which to deploy their advances — not to mention partnerships with the automakers’ wealthy and innovative-in-their-own-right R&D teams. And they open up their own partnership narrative; Silicon Valley has in some corners almost as big a reputation for self-importance as the automakers have. These partnerships chip away at the image of Silicon Valley as a self-absorbed tower of innovation that sometimes pursues disruption for its own sake.
Both industries get to advance faster than they otherwise would have. Both industries get to have a significant impact outside of their traditional spheres of influence, and can fuel the imaginations of fans of each. Both industries crack open a new narrative and new storylines to tell. It’s a win-win. Actually, it’s a win-win-win, as consumers stand to reap the most obvious benefits of these partnerships.
So what will this mean for the road ahead? Where does this exciting next leg of the journey take us?
A Look Ahead
I talked in the last post about the significant partnerships between leading automakers like Audi, General Motors, Volvo, Ford, Mercedes-Benz, Toyota and others, and technology Nvidia, powerhouses like Google, Apple, Amazon, and Lyft, among others. The technology industry and the automotive industry, after years of perhaps regarding one another warily, have embraced each other like long lost siblings — much to each other’s benefit.
What will this mean for the future? In terms of technology, look for more partnerships between Detroit/Tokyo/Germany and Silicon Valley. I don’t think the technology companies like Apple or Google will really make a serious push to develop their own vehicles, no matter what Elon Musk says. It’s harder than it looks (just ask Tesla), and most technology companies recognize their core competencies and may not want to risk getting established in a wholly different industry. (Yes, I do realize that Apple in particular has a successful track record of getting into industries they weren’t in before — music and phones, anyone? — but mass production of heavy industrial products is far more costly and materials-intensive than digital files of music or building a phone.) Apple may keep experimenting (as might Google) and produce limited editions of electric cars, but I don’t see them entering the mass market automobile business.
Instead, I expect that the big tech companies to continue to license their EV or smart mobility technology to the automakers who will be willing to pay for it — kind of like “Intel Inside,” it will be a selling point to have Apple or Google or Amazon technology inside your car. This would allow the tech companies to extend their operating systems and technologies into the next big consumer smart device, without having to invest in manufacturing and industrial capital.
Look for joint R&D and deeper integration between the two industries as the partnerships deepen and the products become more intertwined. Look for faster advancement than we’ve been promised — because once technology and automotive join forces fully, they’re going to drive change at previously unthinkable pace.
The technology industry has already engineered three wholescale revolutions in how we live in one generation — with the introduction of the personal computer 35 years ago, the rise of the mass internet and the World Wide Web in the early 1990s, and again with the smartphone revolution of the past ten years. Now, working with the automotive industry, we’re about to see a fourth revolution: the first transformative changes to the in-car experience and the way we drive in generations.
On a societal note, there’s an economic side effect of all of this integration that excites me as a resident of Metro Detroit, and I hope excites most Americans who’d like to see a once downtrodden American city revitalized. Look for the Detroit metropolitan area to attract a mini-industry of engineers, computer scientists, developers, and more — providing a much-needed boost, and much-needed diversification, to the area’s economy — as the development teams from technology companies and automakers become more entwined. There may even be a new “nerd bird” airline route: from San Jose or San Francisco to Detroit. The impact on the southeast Michigan economy could be profound, and while there is already something of a revival happening in Detroit already, the infusion of talent and energy from the technology industry as it partners with auto could take it to another level entirely and make Detroit “the” comeback city of the first half of the 21st century. Other auto manufacturing centers in the United States, like Alabama (Hyundai), Nashville (Nissan), and South Carolina (BMW) should also benefit from this infusion of exciting new talent.
From a communications and storyline standpoint, look for automotive to continue growing as the primary application of technological advancement. CES is now more important to the automotive industry than it is to the electronics industry — and the CES headlines from 2017, 2018, and 2019 will continue to be, er, driven by the automotive industry. Look for tech reporters to show up at the Detroit, Los Angeles, New York, and Geneva auto shows because these events are now must-attends on the tech beat. Look for automakers to tout internet speeds as much as they tout 0–60 times, and to boast of the power of their technology like they’ve always boasted of torque ratios and horsepower.
Rarely have two industries converged on such a similar flashpoint of transformative change. It’s an exciting time — for innovators and leaders in each industry alike, and for we the consumers who stand to benefit from this convergence.