On the Future of the Automobile (and Telecom, Too)

The auto sector and the telecommunications industry have more in common than one might think: both are caught up in old paradigms at their peril.

I recently attended a breakfast event sponsored by Ogilvy Renault and Deloitte, whose TMT practice I follow pretty regularly. The breakfast session was about the future of the car, which is a hot topic for just about everyone these days. The focus was mainly around cleantech and energy, so I didn't go there expecting to hear about what's cool in GPS, wireless broadband, smartcar technologies, etc. While that would have been welcome, the energy angle was also very interesting. The panel had a mix of academics and real businesses – the latter being Magna and Zenn Motor Company. (Zenn is quite neat actually – a Canadian public company making an electric car. But why is that that within Canada, it's only available in Quebec?).

Anyhow, there was a lot of talk about the challenges involved in using hydrogen and fuel cells to power electric cars, and I couldn't help but notice the strong parallels to telecom, and what Internet Protocol (IP) has done to displace and disrupt the Public Switched Telephone Network (PSTN). Just substitute carbon/oil for PSTN, and hydrogen/fuel cells for IP, and the conversation unfolds pretty much the same.

As with IP, most of us can see that hydrogen holds great potential and in time should supplant carbon-based fuel to power our cars. Being early stage technology (well, sort of – they've been working on this for a very long time), adoption has been held back by the usual suspects – high unit costs, unreliable fuel cell technology, limited distribution/infrastructure, and worst of all, a lack of political will/vision to bring the electric car into the mainstream. It's really scary when you think about how U.S. and Canadian governments have devoted so little attention to broadband policy/regulation, and how far we're falling behind the rest of the industrialized world. Same story here.

I couldn't help but also notice how narrowly focused the discussion was on cleantech – as if that's the magic bullet that will save the auto industry. Aside from the banks, can you think of an industry that's in more trouble than this? If you think telecom is struggling to transition from 1.0 to 2.0, this sector really has a big hill to climb.

Looking through my telecom lens, it’s akin to talking about how technology is making phone calls cheaper, but not looking at the broader context of how telecom is now just one of many modes that define today’s communications experience.

Not that I was expecting a broader agenda, but there wasn't even a mention about the bigger picture issues around what kind of cars we need today, how the industry is evolving, where the auto fits relative to other modes of transportation (especially in big cities), etc. There was, thankfully, one good question from the audience, asking about the impact of using lighter materials to build cars. No doubt, the technology is there to develop lighter, stronger materials, and of course that would be a huge step forward in making cars more practical.

One panelist did concede that when the Chinese start bringing $5,000 electric cars to North America, we won't be able to compete. I don't think we're too far away from that scenario, and what is GM going to do then?

My reference to GM just now wasn't an accident. This meeting painfully reminded me of a must-see CBC documentary on the fate of the electric car. If this film, titled Who Killed the Electric Car, doesn't lay bare the 1.0 thinking that has effectively destroyed GM, I don't know what will. In short, it tells the ill-fated story of the EV-1, perhaps the greatest flash of innovation from GM in a generation. It was a first-generation electric car, launched as a trial in the 1990s in California in response to the growing need for greener, zero-emission automobiles in that state.

As the film shows, the vehicle was a hit with the lucky few hundred who got to drive one. Then the dark side emerges, and we learn about the ugly forces that caused the EV-1 to be taken off the market, and then destroyed with barely a trace. For Canadians, of course, this screams Avro Arrow, and you have to wonder where the auto sector would be today if GM hadn't been so shortsighted. You can check out this documentary online here. If you care about the auto market, you don't want to miss it.

Ditto if you think like me and want to look for lessons learned – or not – from this market and what they might mean for telecom, among other industries.