Toward disruptive innovation

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Toward disruptive innovation

In 1878, Karl Benz, founder of Mercedes-Benz, declared that he would invent a “horseless carriage.” Six years later he produced the first automobile that ran on gasoline. With an investment by Julius Gans and Friedrich von Fischer, the company in 1894 was the first to mass produce automobiles. In the 20th century, automobiles came into wide use. As they emerged as a “disruptive innovative technology,” cars came to have a tremendous impact on other industries and ways of life.

Imagine enjoying breakfast and browsing online news and email in your car on the way to work. Or sleeping through the whole ride to your office. The car would return home automatically, so you no need to worry about parking. This is soon to become a reality.

In the 21st century, the development of driverless cars is in full swing, involving automakers Mercedes-Benz, BMW, Audi, Nissan and Toyota; electric car maker Tesla; auto parts maker Delphi; and IT companies Google and Apple. They want to take the lead in innovation for what will surely be the most disruptive change in history of automobiles. The Korean government held its third ministerial regulation and reform meeting on May 6 and announced a plan to support commercialization of autonomous vehicles with GPS by 2020 and a pilot-run of driverless cars at the PyeongChang Winter Olympics in 2018.

Google announced it would commercialize driverless cars by 2017, and many other carmakers plan to offer them by 2020. Early stage self-driving technology that reduces risks to drivers is already widely available. After active automated control of the steering wheel, gas pedal and brakes, and limited automated driving in designated zones, the final stage of allowing driverless driving in all situations will be available in a few years.

The upcoming changes in lifestyle will be thrilling.

Automated driving will bring revolutionary changes on par with, or exceeding, the transformation that the Internet and smartphones have made in our lives. We will not only be free from the act of driving, but experience direct and indirect impacts on countless industries and jobs related to automobiles. Cars will not be owned, but shared, and local government or housing units will own vehicles for that purpose. Then the number of cars will probably decrease, alleviating parking problems. Consulting firm McKinsey and Company predicts that driverless cars could reduce the number of traffic accidents by 90 percent.

If that prediction is realized, radical changes in the automobile insurance, automobile maintenance and medical sector are inevitable. Development of new cars used to require investment and research on collision safety, but the focus of development would change. Traffic facilities and equipment would change with respect to shape and function. Chauffeur services, traffic regulation, distribution and logistics, used car trades and driver’s license management are only a few of the areas in our society that would be affected by the new technology.

Industries not directly associated with automobiles will surely change to accommodate driverless cars, from media and advertising to communications and food service.

No one denies the possibility of the general use of driverless vehicles for location-based services, recognition technology, and information and communications. However, despite rapid development of autonomous cars, conventional vehicles and driverless cars would inevitably coexist for two or three decades. We need to thoroughly prepare for the transition period of conventional and autonomous cars existing together and devise systematic plans to prevent abuses.

The world is struggling with low growth and low employment. The only way for Korea to break through the slump is disruptive innovation technology. As the appearance of Apple’s iPhone changed the mobile phone market, autonomous cars have the potential to threaten existing technologies. As history has proven, only constant innovation guarantees survival of businesses and brings positive changes to our lives and the world. It is exciting to imagine Korea becoming the first country to sell autonomous cars.

Translation by the Korea JoongAng Daily staff.

JoongAng Ilbo, May 19, Page B8

*The author is the chairman and CEO of the Korea Insurance Development Institute.

by Kim Soo-bong

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