Why South Korea Could Be The Epicenter Of Self-Driving Cars

It sure is sexy to think of the autonomous car “race” as a battle between the Googles and the BMWs, the Teslas and the Ubers, the Silicon Valleys and the Wall Street Blue Chips. However, most of us are overlooking a very unsexy wrinkle: governments.

No, not your government. That’s the point — there’s more than one. Governments across the country, and indeed across the world, compete with each other just like Google and BMW. The propagation of autonomous transporation will be significantly impacted by how deftly governments change their outdated laws, change their allegiences to archaic processes, and change their perceptions of the government’s role itself in the future of transportation.

In short, autonomous transportation will grow wherever government uproots its old ways. Seeing it in that light, the U.S. is far from the clear favorite most of us assume it to be… as evidenced by the roughly zero mentions of this technology during the past six months of presidential primary debates.

Okay, so who’s better situated than the U.S.? Look to the far east.

No, not there. A little further. Try the kimchi.

Apple generated $230 billion in revenue last year. General Motors generated $150 billion. Those were America’s biggest hitters in mobile consumer electronics and automobiles, the two industries quickly converging as cars become more like mobile devices.

Juicy numbers, to be sure. But how much do those companies influence the U.S. economy, and by extension, the motivations of the U.S. government?

Hmm. Fair enough. Plenty of other fish in the world’s biggest pond. Now, let’s take a look at the influence Samsung and Hyundai have on their homeland of South Korea:

Okay, that’s… interesting.

The autonomous car “race” is really more of a land grab than a sprint to some mythical finish line. Those of you who work in startups can appreciate that being “first” hasn’t been a good thing since software became the language of business. No, what wins is contracts and partnerships — and South Korea’s government is highly motivated to keep such arrangements healthy between itself and its fattest native sons, Samsung and Hyundai.

SK’s economic reliance on these two chaebol is clear; what’s more, local competition is light and will stay that way. Hyundai owns Kia, and that’s pretty much the entire South Korean automotive sector. It also happens to be the fourth largest carmaker in the world.

Samsung’s distant second rival is LG, and that gap is growing. Powered in part by Samsung’s progress, South Korea is the world’s second-largest semiconductor manufacturer. And of course, who’s the 800-pound gorilla of mobile devices? It’s Apple, right? No, my fair-haired American fanboy.

http://www.statista.com/statistics/263355/global-mobile-device-sales-by-vendor-since-1st-quarter-2008/

All in all, South Korea has significant incentive to embrace the future of transportation and the confluence of mobile technology. How its government moves self-driving vehicles forward could mean the difference between a doubling of GDP and a 50% unemployment rate.

But South Korea knows all this, right? If so, why haven’t we heard anything?

Well, we have heard a little, to be fair. Samsung made a rather milquetoast announcement in late 2015 that they’d be pursuing innovations around “autonomous technology and infotainment” (though we should note for comparison that Apple has never publicly claimed to be working on autonomous software.) Hyundai recently made a similar me-too announcement about self-driving car development after most of its competitors had already demonstrated tests and beaten their chests; however, it is interesting to note that Hyundai declared they’d be producing their own microchips for such vehicles, which one assumes means partnering more closely with SK’s semiconductor industry.

Perhaps most notable is the statement coming directly from South Korea’s government itself, which, in a change of pace from the rest of the world, has been more bullish on the technology than its private conglomerates:

Autonomous cars could be on roads as early as 2020, and may account for 75% of the global car market by 2030

Those speculative figures are about as aggressive as any carmaker — or tech company, for that matter — has posited to date.

Now, an interesting reality check: I’ve had two South Korean friends claim that there exists an ingrained aversion to entrepreneurial risk on the peninsula. It’s not to say they don’t want to embrace change, but rather that they don’t want to take the leap to be “first.” They’d rather the U.S. or Japan or Germany experiment, and then learn from those first movers. If true, that might explain the dearth of newsworthy statements out of Samsung’s and Hyundai’s camps regarding AVs… but as to whether or not the fast follower mentality will pay off, we’ll have to wait and see. As I previously stated, it’s arguably become the best strategic position over recent decades.

That said, South Korea and the Far East in general share a few traits which are highly conducive to the adoption of autonomous transportation:

  • Aging population (resulting in less mobility) within a culture that places a high degree of value on the elderly
  • Intimate relationships between corporate sector and government in the name of mutual benefit (see: the “profitability” of Asia’s railways)
  • More recently-developed infrastructure, which should be able to carry its weight (without the significant maintenance dilemmas that are plaguing the U.S.) until the economic benefits of autonomous vehicles take shape
  • Proven acceptance of lower-speed vehicles and multi-modal transport, along with a less fervent emotional connection to cars than the West

The above is a pretty strong blueprint for the propagation of autonomous vehicle technology. If you’re an American who wants to understand what transportation will look like in the future, watch this space.