In defense of a targeted open source strategy in the transportation industry

Claire Lepelletier, Market Development @Aster

The open source concept, inspired by the libertarian and anti-capitalist ideals of free software, may not seem to be a prime concern for industrial firms in the transportation sector. As the value chain in that sector prepares to undergo significant changes, these firms could be very tempted to hold on tighter to their patents and data. But we believe that, on the contrary, a targeted open source strategy can lay the groundwork for firms to gain a decisive competitive edge.

Embracing the open source philosophy: community creation and sharing of standards

The open source tradition started a new conversation about tapping more talent through crowdsourcing and unleashing synergies between different sectors and types of expertise. By way of example, Local Motors developed and marketed the Launchforth design platform, through which 70,000 members have co-developed 7,500 products. It brings carmakers and the developer community together through challenges. Domino’s Pizza received 441 design submissions for its delivery vehicles. The $40,000 price corresponded to the transfer of the intellectual property from the community to Domino’s Pizza.

By facilitating co-development, collaborative tools encourage the pooling of R&D costs and the tapping of talent from new fields (big data, artificial intelligence, Blockchain, etc.). Supported by micro-factories, community creation allows rapid iterations between developers, suppliers and end-clients, saving valuable weeks in the process of developing products and bringing them to market.

XYT is a company with a model that is also close to the open source world, and it illustrates another of its advantages. This Paris region-based startup holds IP rights for the standard, approved utility vehicles it sells. Its customers can customize the vehicles to suit their own needs. XYT is therefore creating a marketplace for community-developed accessories. This approach, which moves away from the traditional value chain, has won over Japan-based glassmaking giant AGC, which sees in it an opportunity to learn more about those who buy its products.

Adopting a targeted but resolute open source strategy is now a necessary step in the quest to share standards and reach critical mass

In July of 2017, Chinese search engine Baidu launched Apollo, a platform that provides autonomous driving software to all players seeking to develop their own systems. It makes available to a community the source code allowing partners’ vehicles to detect obstacles, plot courses and maintain control. The stated goal is to test its operating system as broadly as possible under real driving conditions in order to rapidly collect data that can be used to improve it.

It is urgent for industrial firms from the automotive and transportation sectors to start openly using the same resources rather than hiding behind their patents. Tesla set the example in 2014 when it made its patents public. This was a strategic decision intended to lay the groundwork for the electric vehicle market to boom, since it promoted the emergence of a standard for charging infrastructure. Indeed, the market cannot take off if this infrastructure is not quickly put into place. Ron Adner and Rahul Kapoor reiterated this in a recent article in the Harvard Business Review: “It may pay to focus a little less on perfecting the technology itself and a little more on resolving the most pressing problems in the ecosystem.” By giving up the exclusivity associated with its patents, Tesla made a fundamental tactical step toward standards adoption and critical mass.

In more general terms, industrial firms can use open source strategies as a spearhead in the fight against digital platforms. In his article Les communs, l’open source, les objets liens et l’Art de la Guerre, Gabriel Plassat is as clear as can be: “Industrial alliances must thus develop their own digital community platforms to provide a variety of stakeholders with the bricks needed for innovation and to catalyze distributed innovation. It is no longer an option.” In sum, open source is a means of opening without losing control: making public the code of some carefully selected subsystems seems a good strategy for an industry to become more flexible in terms of development and product testing, to innovate at the right level, to impose its standards and to have its solutions adopted on a massive scale.