Monthly Archives: November 2014

Renowned business strategist and futurist Peter Schwartz is issuing a warning to the automotive sector: Step up or step aside in steering the future of cars. The tech industry, he says, could become the main driver of new motorized transport technologies, including Internet-connected, self-driving cars.

If [automakers] don't adapt, they'll just be hardware suppliers to a software industry,Schwartz told a packed audience Tuesday at the Los Angeles Auto Shows Connected Car Expo. The very business model -- who are the winners and losers -- is up for change.

The founder of the Berkeley, California-based strategic planning consultancy Global Business Network said he envisions a future where either automakers adapt quickly to the changes taking place in passenger cars, or risk having tech companies like Google and Apple swoop in to fill consumer needs on their own.

Already Googles Android and Apples iOS are battling for control of the vehicle dashboard touch-screen interface, and Google is taking a strong position on autonomous driving technology. And some Wall Street dreamers have even suggested that Apple dive right into car manufacturing by purchasing Tesla Motors Inc. (If it does, CEO Tim Cook might find himself, as Tesla CEO Elon Musk did during a recent conference call with analysts, lamenting how hard it is to engineer and make a car.)

The auto industry certainly recognizes the need to embrace the innovation.

Speaking at a business conference in the United Arab Emirates on Wednesday, Ford Motor Co. Executive Chairman Bill Ford, the great-grandson of Henry Ford, outlined his companys vision of the future of driving, which seems to correspond with Schwartzs advice.

We are equipping cars and trucks with new technologies that improve the driving experience, guide you to your destination, manage the cars functions and keep you and your passengers entertained, Ford told an audience of business executives in Dubai. So wearebuilding smart cars, and they will continue to get smarter.

Ford outlined a vision where the future of driving focuses on the needs of congested urban environments where smart infrastructure and smaller, more connected forms of transport will be needed to cope with higher population densities. In what would have been industry sacrilege 20 to 30 years ago, Ford offered up a vision of access to transport rather than ownership, transport that is shared rather than individually owned.

In congested urban environments, we will see more peer-to-peer applications and on-demand transportation networks, he said, pointing to ridesharing services like Uber.

Ford Motor Co. three years ago released its vision of automotive transport through 2050, which predicted the arrival as early as 2017 of semi-autonomous driving, vehicle-to-infrastructure communication (smart roads that adjust speed limits in real time, the ability to warn of road construction or traffic jams well ahead of time) and growth in small city cars to navigate congested urban environments. Ford sees fully autonomous driving by as early as 2025.

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Peter Schwartz Warns Auto Industry Could Wind Up In Silicon Valleys Back Seat

Automakers face a bleak future if they dont make aggressive bets about the future of cars, according to Peter Schwartz, a renowned business strategy consultant.

If they don't adapt, they'll just be hardware suppliers to a software industry, Schwartz said Tuesday to kick off the Connected Car Expo at this weeks L.A. Auto Show.

The idea of cars being connected to the Internet, becoming smart enough to drive themselves and entertain consumers, doesnt just mean loading them up with more bells and whistles, he said.

The very business model -- who are the winners and loser -- is up for change, Schwartz said.

About 50% of drivers want smarter cars, whether for safety or entertainment, Schwartz said, citing a McKinsey & Co. survey.

In the worst-case scenario for traditional automakers, digital invaders like the Googles and Apples of Silicon Valley produce a fragmented market that slows adoption of connected cars and leaves consumers frustrated.

The best-case scenario has automakers matching the story of IBM, which has successfully adapted its culture to changes in the technology industry and remains a blue-chip stock.

Schwartz said he was enthusiastic that either the automakers or digital invaders would win out and the ideal of a connected car does take off. But if youre a business decision-maker, you have to think about all the scenarios, he warned.

Twitter: @peard33

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L.A. Auto Show: Futurist predicts tech will disrupt auto industry