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Skip to 0 minutes and 9 seconds Welcome back! Many people wonder why Google, which essentially is a software company, has launched an autonomous car. Let’s do a short Question & Answer session to shed light on this Google venture. Is the driverless car a radical innovation for Google? Absolutely. Google is not in the business of making and selling cars, let alone autonomous cars. It basically is a software company. So it involves quite a radical leap in technological innovation. The driverless car project is also quite risky for Google. Imagine the reaction of the public if one of Google’s self-driving cars causes a serious accident. The reputation damage would be enormous, especially in case of a lethal accident.

Skip to 0 minutes and 59 seconds Stakeholders would say: Google, stick to what you’re good at, every man to his own trade! Are there other reasons why Google’s driverless car is a radical innovation? Google’s intentions have always been radical. About 1.3 million people died in car accidents every year. Many more get injured. Well, Google intends to reduce the number of car accidents by no less than 90 percent with autonomous cars. Google also wants to radically reduce traffic jams. Every day, car drivers lose a lot of time in traffic jams. Google wants to reduce the waste of time and energy in traffic jams by 90 percent.

Skip to 1 minute and 43 seconds Finally, Google wants to reduce car ownership by again 90 percent. It basically sees the autonomous car as a shared community service rather than a privately owned product. This makes sense as car owners use their vehicle only 5 to 10 percent of the time. That is why its driverless car prototype is a very basic functional pod that is not owned by any individual, but used by everybody in a particular community actually. Google’s car is a new public transport vehicle. And when we look inside the pod, we can see that it comes without a steering wheel or brakes. All you’re supposed to do inside a pod, is have a chat or even better, use your mobile or tablet.

Skip to 2 minutes and 29 seconds so that Google can capture your Big Data. Do car manufacturers see Google as a threat? Well absolutely! Car manufacturers basically make money by selling as many cars as possible to as many people as possible. But why buy an expensive car that sits idle 90 percent of the time, when you can order a shared one and that one will drive up minutes later? That’s why the likes of BMW and other car manufacturers are becoming mobility companies rather than car vendors. But there’s not just the car companies; the oil industry would see its revenue plummet. Insurers would face obsolete business models. All these industries could lose trillions of dollars if they do not adapt in time.

Skip to 3 minutes and 15 seconds Are autonomous cars close to being commercialized? Well, established car manufacturers such as Volvo, Nissan and Daimler have already commercially launched bits and pieces of the future autonomous car such as a front crash prevention system, self-parking technology and even some autonomous driving capacities. By 2020 we could see autonomous cars driving and confines urban areas. But no one is close to commercializing a totally autonomous car that is fully self-driving in any challenging weather, geographical or traffic context. Is Google still leading the self-driving car race? It was for a long time, but manufacturers with proven commercialization capabilities are catching up. Given its inexperience and the risks involved, Google will probably need to focus on self-driving software and ally with car manufacturers.

Skip to 4 minutes and 14 seconds Even if it manages to do this, the future of sound driving cars may very well be Chinese rather than western or Californian. The Chinese government has been pushing self-driving cars to radically reduce pollution, supporting homegrown companies such as Baidu with its self-driving platform. Another reason China could leapfrog this is that it was a nation of bikers until very recently. Less addicted to car ownership, the Chinese people seem more willing to embrace self-driving vehicles. In conclusion, Google’s radical intentions with the self-driving cars still hang in the balance. But the impact of the driverless car project is undeniable across the world. Thank you very much for sitting through the question and answer session.

Skip to 5 minutes and 1 second See you in a second for the business model innovation steps.

How radical is Google’s driverless car?

In this video we discuss how radical Alphabet’s driverless car project is; a project renamed Waymo on which it has spent no less than $1.1 bn between 2009 and 2015.

In particular, we discuss the driverless car’s radicalness in terms of risks and capability leaps involved for Google; and the wider societal effects self-driving cars could have on a host of industries and user behaviours.

The effects of a radical innovation typically are much larger than that of a disruptive innovation. While the latter intents to shift the supply of customer technology in favour of customers with lower budgets; the former seeks to recreate the meaning and direction of entire industries and customer behaviours. For instance, the emergence of self-driving cars is pushing the car industry to redefine itself as a mobility industry - crossing the domains of the sharing and private ownership economies!

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This video is from the free online course:

Innovation Strategy: Challenging the Usual Suspects

Université Libre de Bruxelles