The car industry has been affected by technological changes both in the production and geographical distribution of cars across the globe. The major driving force of these technological changes include the increasing technological complexity of the automotive products that has resulted in outsourcing manufacturing and service activities from car makers and suppliers. With this, car makers have been focusing on the value of the final products that are being released into the market. With an increase in innovation, car industries are upgrading the future of automobiles across the globe. Empirical evidence shows that shared mobility, connectivity services and upgrades will be increasing the automotive revenue opportunities at a 30% or close to $6.5 trillion by 2030 (Forbes Technology Council, 2018).
The future technologies in the car industry include: autonomous cars, electric cars and artificial intelligent cars. These ground-breaking technologies will have a massive change in the car industry. As an illustration, these cars will be more fuel efficient because of the electric and hybrid vehicle technology being used. In 2016, there were approximately 2 million electric cars which were introduced into the global markets for consumers. Additionally, it is expected for the figure to increase in future since different car industries are producing more electric cars. With artificial intelligence and machine learning technology, cars will be having a predictive technology with a personalized driving experience.
Car industries are applying algorithms that will be using an automatic process. In this scenario, vehicles will be becoming IoT device with the capabilities of connecting to smartphones and receiving voice commands and cautiously changing the user interface (Ismail, 2017). The predictive technologies will be used as sensors to inform the car owner whether the vehicle needs a mechanical service. This will depend on the present condition of the car and the technology that will be used to assess its performances. These technologies have had a significant impact in the car industry (Hovorun et al., 2017). The purpose of this essay is to discuss the organizational/product innovation that has been introduced in the car industry, assess the reasons why they have been introduced and the impact of financialization.
Artificial Intelligence commonly abbreviated as AI is increasingly transforming the car industry. This is because, this new technology aims to unveil new efficiencies and capabilities towards revolutionizing the car industry and the type of products being released into the market. Empirical evidence shows that, in 2015, the rate at which AI technologies was being installed in cars was valued at 8%. The percentage is expected to increase to 109% by 2025.There are different ways in which artificial intelligence will be transforming the automobile industry. First, artificial intelligence will lead to machine learning capabilities. This means that, AI has been developed due to numerous scientific experiments in which when applied to machines, it will think and act like human beings.
However, there is being difference between AI and machine learning. Take for instance, in the case of Artificial Intelligence, devices will be carrying out tasks like human beings whereas in Machine learning there will be an application of AI where devices will be given a set of data to learn for themselves (Kale, 2017, pg.122). An example can be given by Toyota being that they have gone a step higher towards adoption of machine learning and AI with an objective of creating a highly responsive autonomous system. Secondly, there is the transformation of cognitive abilities where self-driving cars will be able to cruise along the roads carrying assortment of different goods due to be delivered in a designated location. This is a technological transformation in the cognitive abilities in the AI technologies. This is achieved through continuous assessment of the data behavioral patterns and mining capabilities (Burgin, mKlambach and Gnamm, 2018). The cognitive systems will be working like humans and how they normally interpret data and information. These cognitive capabilities will be able to deal with dynamic operating circumstances. Most car companies have started incorporating this type of technologies into the products. Thirdly, AI will change the infotainment systems of vehicles in which car companies will be in need of quality hardware and software that will be compatible with the AI. With infotainment, cars will be able to recognize speech, eye tracking, monitoring driving, recognizing gestures, storing the available natural languages.
With the AI technologies in the car industry, there will be a new experience of car driving across the globe where consumers will be satisfied and able to communicate with their cars. The innovation that has been introduced into the car industry has had enormous impact since the level of excellence has been taken to the next level. The major examples of AI technologies being used in the car industry include: Autonomous vehicle having unique driving features, and DataRPM which is being used to predict machine failure during machine learning and use of driver assist. Some of the AI trends which have been observed in the automobile industry include: self-driving cars, cloud computing, IoT, machine learning, deep learning and cognitive capabilities (Candelo, Matricano and Sorrentino, 2018, P.6).
AI was released into the car industry because car companies wanted to make it possible for people to interact with machines. This is an experience that is becoming easy with time because of the advancement in Natural Language Understanding. Additionally, the car industry wanted to introduce a new driving experience for their customers due to the increase in technological advancement and trends that have been taking place. Take for instance, when consumers are driving and having the right information at the right time is significant when driving. When it comes to a personalized experience, drivers will be able to seek for recommendation from their cars due to the type of technology that has been installed into their system. Additionally, AI was introduced to reduce fatalities such as accidents due to human errors on the road. AI was also introduced to increase safety protocols such as deploying airbags and monitoring objects in front of a car (Philip, 2017). Furthermore, AI was aimed to increase personalized experience for consumers in that, with AI older people could be helped and run a system diagnostic in case of any malfunctions in the car. This is an approach that will help in the reduction of accidents on the roads.
AI and automation have transformed the car industry and its surrounding. According to the study conducted by McKinsey Global Institute, by 2030, the use of AI will have reduced the human labor by 30% across the globe (Kaisser, 2018). According to the institute, close to 800 million jobs will be lost by the ends of 2030. With AI there will be the introduction of many robotics in the car manufacturing industries. With the increased pressure from the manufacturing sector in the automobile industry, technology has doubled the capabilities of human labor. The new application of AI and robotics is benefiting the manufacturing process. Statistically, 38% of robotics have been introduced into the car manufacturing industry (Jain, 2018). According to the International Federation of Robots, they have predicted that automotive manufactures will be increasing their robotic workforce by approximately by 30% in the next three years. The robotics will be capturing the imagination and the technology that will be able to create a massive industrial revolution in the car industry.
When it comes to employment, there will be a reduction in the cost of labor and other overhead costs. In a recent article released by Forbes, car manufactures are introducing robotics that will be able to be compatible with the AI technologies (Lahy et al., 2018, pg. 2240). Additionally, it was discovered that robots are more efficient and increase productivity as compared to humans. In the employment sector, there will be increased rates of unemployment across the globe. There is a theory known as rise of the robots, which is a description of the negative impacts of robots in regards to the workforce. According to this theory, robotics and AI will reduce the number of the workforce across the globe. Experts predict that automation of car manufacturing industries will reduce the number of jobs by 70%. This means that, they will either get marginalized or completely eliminated.
Innovation can be considered as contemporary concept that incorporates different discourse. In this case, financialization is the spread of finance with an objective of increasing social life and increase generation of ideas. When it comes to the car industry, financialization will help in the generation of ideas and provision of resources that will help in developing better version of AI technologies that can be used in the car industries. Financialization has led to the search of talented employees who will be able to develop ideas through application of computer technologies (Klumpp, 2018, P.5). With this, different car industries will be able to compete favorably. This is because, with skilled employees in regards to development of AI technologies, it will be easier to fulfill the demands of consumers on a global scale. Most importantly, financialization has led to different mergers in the car industries with an objective of coming up with more ideas to help transform the AI technologies and its application in the automobile industry.
In conclusion, innovation has its benefits and disadvantages. However, the benefits of innovation outweigh the disadvantages. Therefore, the technological transformation should be embraced. As an illustration with the increased technological advancement, AI has become significant in today’s business. With AI, there will be a massive transformation in the car industry that will be helpful to people on a global scale. Other benefits will include; efficiency, strengthening the performance of the economy, and enhancing the lifestyles of humans.
References
Burgin M., mKlambach R and Gnamm j. (2018). Innovation in the automotive Industry: No more Experiments. Accessed date 18/10/2018.Retrieved from: https://www.bain.com/insights/innovation-in-the-automotive-industry/
Candelo, E., Matricano, D. and Sorrentino, M., 2018. HOW DO MILLENNIALS FORESEE THE CAR OF THE FUTURE AND THE FUTURE OF THE CAR? EMPIRICAL EVIDENCE FROM AN OPEN INNOVATION PROCESS PROMOTED BY A MULTINATIONAL COMPANY. In EURAM-Research in Action–Accelerating knowledge creation in management (pp. 1-19). EURAM.
Forbes Technology Council (2018).14 ways AI Will Benefit or harm society. Accessed date 18/10/2018.Retrieved from: https://www.forbes.com
Hovorun, T.P., Berladir, K.V., Pererva, V.I., Rudenko, S.G. and Martynov, A.I., 2017. Modern materials for automotive industry.
Ismail N. (2017).AI: the new driving force in the automobile industry. Accessed data 18/10/2018.Retrieved from: https://www.information-age.com/ai-the-new-driving-force–automobile-industry123468560/
Jain A. (2018). A VC Perspective-How valid is the threat of Artificial Intelligence on the Job Market. Accessed date 18/10/2018.Retrieved from: https://www.entrereneur.com/article/306811
Kaisser M. (2018).4 pillars of Artificial Intelligence that are building the car of the future. Accessed date 18/10/2018.Retrieved from: https://whatsnext.nuance.com/connected-living/artificial-intelligence-in-car/
Kale, D., 2017. Sources of innovation and technology capability development in the Indian automobile industry. Institutions and Economies, pp.121-150.
Klumpp, M., 2018. Innovation Potentials and Pathways Merging AI, CPS, and IoT. Applied System Innovation, 1(1), p.5.
Lahy, A., Li, A.Q., Found, P., Syntetos, A., Wilson, M. and Ayiomamitou, N., 2018. Developing a product–service system through a productisation strategy: a case from the 3PL industry. International Journal of Production Research, 56(6), pp.2233-2249.
Philip S. (2017).5 ways artificial intelligence is driving the automobile industry. Accessed data 18/10/2018.Retrieved from: https://bigdata-madesimple.com/5-ways-artificial-inelligence-is-driving-the-autobile-industry/
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