Mercedes looks for Korean innovation

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Mercedes looks for Korean innovation

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Left: Philipp Gneiting, head of open innovation at Daimler Group, speaks Wednesday during an interview conducted on the sidelines of the “Connected Car Startup Hackathon.” Right: Mercedes-Benz Korea CEO Dimitris Psillakis, second row left, and Christian Diekmann, head of R&D Korea at Mercedes-Benz Korea, pose with hackathon participants during the event held in Gangnam District, southern Seoul. [MERCEDES-BENZ KOREA, YONHAP]

As the global auto industry faces a lengthy decline in sales, automakers are desperately searching for new growth engines in a rapidly changing market.

Like many other automakers, Daimler Group believes that the key to survival is partnering with start-ups across the world with innovative ideas, which could help the company transform into a mobility company.

In pursuing that initiative, the German automotive company believes that Korea is an important market that can provide some of the best ideas and human resources it needs.

On Wednesday, the Korea JoongAng Daily sat down with Philipp Gneiting, head of open innovation at Daimler Group, who visited Korea to act as a judge in Daimler Group’s first hackathon in the country.

The “Connected Car Startup Hackathon,” a 48-hour-long event that kicked off on Wednesday morning, challenges the nine start-ups that passed a preliminary round to come up with various connected-car technologies relating to mobility, user experience, maintenance, charging and social.

On the basement floor of the new “EQ Future” pavilion in Gangnam District, southern Seoul, each team of four members will use their laptops and coding skills to come up with possible improvements and modifications to the Mercedes-Benz User Experience infotainment system.

The final winning team, to be announced Friday, will be awarded 200 million won ($167,000) by the Ministry of SMEs and Startups.

“Nowadays, it’s a no-brainer for an automotive company to collaborate with start-ups,” Gneiting said. “For Mercedes-Benz, open innovation is finding promising ideas and embracing them, and we really see potential in doing that by working with start-ups’ technologies.”

Since 2016, Daimler Group has operated a platform named “Startup Autobahn,” which serves as a way for the automotive group to scout start-ups with new mobility items. The program has so far identified around 5,000 start-ups, had 70 of them do test runs and applied technologies from 15 for real-use on Mercedes-Benz products.

“This may look like a small number, but that’s perfectly fine with us,” Gneiting said. “Automotive innovation sometimes takes years, and there are internal regulations and high standards we have set that need to be met.”

To raise the probability of finding good ideas that can be of real use for Mercedes-Benz, Daimler has also hosted numerous competitions and fairs that invite students and start-ups to compete for prizes and a chance to work with the German automaker.

Now, the German automotive group has expanded the search to Korea by opening its first ever start-up competition in the country. Gneiting said hosting one in Korea was only a matter of choosing when rather than why, as his company saw the country as one of six important markets with promising potential.

Other promising markets are the United States, Israel, China, India and Singapore, he said.

“Korea is situated at the very front of innovation,” the Startup Autobahn head said. “You have 5G obviously, and that’s a big advantage. To tell you a secret, there is no 5G in Germany.”

Gneiting thinks that Korea has a unique socioeconomic situation that allows for innovation to be realized more quickly.

“You have such strong legacy corporations here, and they are highly innovative players in many global fields,” he said. “When that is the case, start-ups can grow as well.”

“The country also has so much competence, high standard of education and infrastructural services. Seoul is also a megacity that is able to support most needs of start-ups with brilliant ideas.”

But as start-ups and large corporations like Daimler Group collaborate for projects, Gneiting says that communication and coming to an understanding of both sides’ needs can prove challenging.

“The obvious challenge is that start-ups have very a different business base, and bridging the two worlds together [is] a challenge,” he said. “My jobs is to moderate between these two worlds. We try to translate different sets of expectations to overcome differences and combine the best of both worlds.”

And as more promising start-ups rise and increase their presence in markets, Gneiting said that granting more flexibility to new players in terms of regulations while finding ways for traditional firms to survive will be key.

“If I ask, for example, a German start-up whether regulatory conditions perfectly fit, I’m positive that they will say there always is a potential for more flexibility and improvement,” he said. “I think it’s always a trade-off for [the government] to foster good growth conditions for start-ups while safeguarding the ones in place. Germany also struggled in that field, and there’s always conflict.”

BY KO JUN-TAE [ko.juntae@joongang.co.kr]

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