Dr. David Cole is the Chairman of AutoHarvest (autoharvest.org), a web based tool to accelerate innovation in the auto industry. Dr. Cole is Chairman Emeritus of the Center for Automotive Research and a former Professor of Engineering at the University of Michigan where he taught courses related to the automotive field for over 25 years. He is a fellow of the Society of Automotive Engineers, Engineering Society of Detroit and Society of Manufacturing Engineers and was recently elected to the Automotive Hall of Fame.
To say we live in a world of exploding knowledge is a profound understatement. With the amazing set of research and discovery tools available today there is growing competency to provide innovative solutions to problems across the world. With this knowledge explosion and a rapidly expanding interest in entrepreneurship, we are witnessing the positive “perfect storm” foundation for significantly accelerated innovation. This is happening across all sectors of knowledge from the physical sciences to the life sciences and is certainly applicable to manufactured goods and the processes used to create them. Many understand the application to product areas but the truth is that process areas are of equal importance.
In a very schematic way we can illustrate the innovation environment we are in today. As shown in Figure 1, the creation of new knowledge is increasing at an exponential rate while the application of this knowledge is expanding at a slower rate.
Therefore the gap between what we know and our ability to apply it is growing rapidly creating a dramatic increase in the opportunity for innovation which is the application of this knowledge to our products and processes. Clearly in the auto industry as with other parts of our economy, the potential to gain competitive advantage or lose competitive advantage is increasing.
The recent trauma of the auto industry in America and to a major extent in the rest of the world has led to a rethinking of the business model with regard to innovation. In the middle years of the last century, innovation in the domestic auto industry was largely driven by the so-called original equipment auto manufactures typically referred to as the OEM’s. In fact less than 10% of the product technology used by the industry was attributable to auto suppliers. This was at a time when the domestic auto manufacturers had extremely large internal component supply operations. Today, for example, Chrysler, Ford and GM have spun off their captive supplier divisions and created independent supplier companies including Delphi, Visteon and American Axle. With the current domestic auto companies, often referred to now at the D3, nearly half or more of product innovation is attributable to external suppliers and this fraction is growing. This is also true for most of the world’s auto manufacturers. As part of this structural shift, GM and Ford have largely phased out their more basic research activities that were conducted under the auspices of the GM Research Laboratories and the Ford Scientific Laboratory. Advanced efforts today are now focused on the support of their various car and truck divisions. They have shifted from internal efforts to collaboration with government laboratories, universities and suppliers both within and outside of the auto industry.
Partnering and collaboration are becoming the norm. For example a few years ago, arch market place rivals GM and Ford, worked together to develop a six-speed automatic transmission. They saved 10’s of millions of dollars and nearly a year of time. This collaboration is continuing with a new series of advanced transmissions.
In general the pressures to conduct business differently and collaboratively are growing. We, indeed, are moving rapidly to a new business model. All organizations are faced with a combination of tough issues related to the development of new products and processes. There are insufficient time, talent, capital and natural resources for them to do everything themselves. For example the talent issues is a worldwide issue that is exacerbated by the exit of many “Baby Boomers” from the work force even as the auto companies are beginning to re-grow after the collapse of the market and numerous bankruptcies of a few years back. This issue, in fact, is a critical national issue facing all segments of our economy and other major economies in the world as well. Here In the United States we will be short 10 million skilled workers in 5 years and 30 million in 15 years due to the smaller follow-on generations to the Boomers. For example here in Michigan there are currently openings for nearly 3,000 CNC (computer and numerically controlled) machine operators and nationally there are openings for about 3.6 million skill based jobs that lack appropriately educated and skilled applicants. Even a job on the auto assembly line today requires someone with a 2 year Community College degree. At a recent Economic Summit hosted by Michigan’s Governor, Rick Snyder, the primary topic was talent for Michigan companies, or more appropriately the lack of talent. In fact the top area of need was for skilled trades and technicians followed by engineers with electro-mechanical skills.
As noted earlier the domestic automotive industry has gone through a phase of extreme distress, where they have been forced to cut research budgets and halt many long term innovation programs. This adds to the risk of losing valuable ground in a continually advancing global technology environment. Many organizations have critical technology needs and long term research goals for which they lack both internal resources and expertise. The automotive sector, from academic researchers to carmakers, has historically practiced research in silos, it has not created a network or method to robustly identify, assess and manage globally located opportunities for collaboration. All the while, this industry, both foreign and domestic, houses a vast quantity of intellectual property (IP) with applications in adjacent industries, all of which requires significant investment to develop and which now, in many cases, is being under-utilized. Industry leaders have realized they need to change tactics to remain competitive as well as to solve today’s needs for clean energy and safer, greener and connected vehicles
Consequently we are facing a very tough task. It is a time of opportunity but also of severe challenge. On all fronts across our economy we are being pressed to do More, Better and Faster. These challenges have led to the creation of a method to increase the effectiveness and efficiency of innovation through the use of a web-based tool that we call AutoHarvest. It is really a kind of Facebook or Linkedin for technology. Its purpose is to bring buyers, sellers, collaborators, inventors, researchers and investors together in a highly secure environment quickly at very low cost around given intellectual properties.
In the next section of this essay we will introduce AutoHarvest, the innovation accelerating tool we are developing.