Southeast Michigan’s connected and automated vehicle (CAV) environment can achieve greater collaboration between the defense and automotive sectors and realize significant growth opportunities in this space.
A new report from the Center for Automotive Research (CAR), titled Strategic Growth Plan for Connected and Automated Vehicle Assets in Southeast Michigan, focuses on key findings from a three-part project: a benchmarking exercise that compares southeast Michigan with three other regions on a variety of CAV technology topics, maps of regional CAV assets, and a SWOT analysis. Together, they provide the region with a strategic, forward-looking plan.
“We sought out opportunities for key players in the region to sustain and grow the area’s robust CAV ecosystem in both industries,” says Valerie Sathe Brugeman, the report’s lead author. Of the many collaborative opportunities identified, the biggest relates to venture capital funds. “Compared to other benchmarked regions, the Detroit area has a high commercialization gap, or the difference between R&D investment and VC spend. This means the area is ripe for more VC investment.”
Michigan is known worldwide for leading-edge research and manufacturing for the automotive and defense industries. Southeast Michigan (greater Detroit), in particular, is an established hub of industrial innovation, including in the high-tech, communication technology arena.
CAR’s benchmarking effort compares the Detroit region to Seattle, Silicon Valley, and Pittsburgh—three regions that compete with Detroit for leadership in CAV technology development. The benchmarking effort highlights differences and similarities between the four regions and their CAV assets, and identifies ways to improve southeast Michigan’s standing as a hub for CAV and other technological development.
These four regions have influential ties to both the manufacturing and technology industries, though the specific industries and connections vary. CAR researchers compared and contrasted the regions utilizing criteria that help define regional CAV assets: industry presence, patents, talent, education, investments, legal and regulatory framework, governance and CAV strategy. Figure 1 displays a snapshot of key regional comparisons.
Figure 1. Benchmarking Comparison
While the Detroit area has the highest manufacturing intensity relative to the three comparison regions, it also has the highest unemployment rate. Silicon Valley leads the regions in patents per capita as well as percent of population with higher education degrees. Detroit is comparable to Seattle in terms of patents per capita, and to Pittsburgh in terms of percent of population with higher education degrees.
In addition to the benchmark research, CAR interviewed representatives from a variety of companies and organizations to gather their views on the region’s strengths, weaknesses, opportunities, and threats with respect to the CAV ecosystem. Organizations were selected to represent different aspects of the CAV value chain, including vehicle manufacturers, Tier 1 suppliers, software suppliers, the defense industry, and Michigan public sector organizations. From these interviews, CAR researchers developed a SWOT analysis, which was then supplemented with findings from the benchmark analysis.
Based on interviews with the organizations participating in this research, Michigan has a clear set of strengths and opportunities to be exploited.
By far, the Detroit region’s most commonly mentioned CAV strength was its strong automotive ecosystem. In addition to being the place where “decisions are made,” the entire manufacturing value chain is located here. The Detroit area also has the highest concentration of automotive manufacturing, R&D, and headquarters in the country. The region boasts top-notch universities, test beds, and venture capital funds, thus creating an even more robust ecosystem. Having all these players in one place allows stakeholders to easily meet and collaborate with others and to see things in person. Respondents overwhelmingly view this density as extremely valuable.
Not surprisingly, talent was by far the biggest weakness recognized for CAV advancement in southeast Michigan. The Detroit region is not unique in this respect, however, as most regions vying for CAV leadership face this same challenge.
To maintain southeast Michigan’s leadership position in the CAV space, CAR researchers have identified several action items that key stakeholders can take to better coordinate and align the region’s CAV efforts. These actions are organized into five categories:
- Greater Collaboration
- Regional Geographic Assets
- Education and Workforce
Given the potential economic benefits of CAVs and new mobility development, there are many regions in the United States and globally competing for technological leadership. The competition for both public and private investment dollars is fierce, and Michigan cannot take its CAV leadership for granted. Michigan must continue its focus on investing, developing and nurturing the technology and industry as a whole in order to maintain the state’s leadership position.
To get more information about growth and opportunities for CAV technology in Southeast Michigan and to read the full report, click here.