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Volkswagen sees opportunities, competitors in Silicon Valley

An one-day immersion tour of Silicon Valley, which included visits to Google, Tesla, and other auto-industry companies, was just the tune-up Volkswagen Ireland needed when they came to visit us last week. This was an eye-opening experience for the top executives that made the visit. Concepts that were once abstract were suddenly brought to life: artificial intelligence, automation and the sharing economy all came together throughout the week.

Startup engagement was definitely high on the agenda. Like many other international companies, Volkswagen is grappling with digital transformation. Looking for partnerships with early stage companies, as a means to accelerate the process of innovation, plays a key role in its strategy. With the help of SVIC, Volkswagen executives were able to fully immerse themselves in Silicon Valley. They were connected to plenty of start-ups and given a chance to see what their competitors are up to.

Social rides, electric cars

No trip to Silicon Valley for car industry heavyweights would be complete without a visit at Tesla. Tesla is a key player in the race toward autonomy on four wheels. Tesla describes its Full Self-Driving Capability as “able to conduct short and long distance trips with no action required by the person in the driver’s seat… which we believe will be a probability of safety at least twice as good as the average human driver.” The Volkswagen team were given the opportunity to test drive the new Model 3 and Model X. This provided Volkswagen with a clear insight into the field of electric vehicles, something they are interested in manufacturing.

Not only did the Volkswagen team get a chance to visit Tesla, they also got to visit Google, where they learned about Waymo. Waymo is Google’s self-driving car project which has been in development for the past couple of years. This experience gave Volkswagen Ireland a glimpse into the internet giant’s plans for the automotive industry.

After visiting Google and Tesla, the team of executives attended a presentation at Waze. Waze is a transportation app that uses a community of 100-million users to crowd source information and create driving maps that identify traffic. Waze also provides a carpool functionality to connect drivers and passengers heading in the same direction.

The rise of the sharing economy has prompted Volkswagen to create a ride-sharing offering of its own. The product is to be called MOIA, and is scheduled to launch this year in Germany. This smartphone app will connect human drivers and electric vehicles to bring together passengers traveling similar routes. MOIA bills itself as “the new mobility concept of the future.”

Innovation or stagnation?

One of the key concepts the Volkswagen team learned about was Digital Transformation. Achieving digital transformation is not just down to utilizing new technologies. It requires innovative thinking. When it comes to big corporations, this is much easier said than done. These companies often face well-established people and processes that prefer orthodox functioning.

To overcome these internal obstacles, many companies look beyond themselves. By establishing partnerships with startups they can jumpstart the innovation process. This technique has become a prominent trend here in Silicon Valley. When it comes to the creation of disruptive startups Silicon Valley is still the world leader. For incumbents everywhere this is a double-edged sword; both a potential source of collaboration and a threat to business. Startup engagement doesn’t necessarily mean bringing in outside partners, it can also involve fostering innovation from within. This concept is called intrapreneurship, which is key to the Silicon Valley ethos.

The group of executives finished their adventurous day by visiting Menlo Park Ventures where they were put into the hot seat. The team heard pitches from early stage companies at the cutting-edge of the latest technologies. The presenting startups vied to win attention and investment with their impressive computer vision products as well as customer service automation. The process benefited everyone, Volkswagen was given a chance to ask founders about their thoughts on the future of the automotive industry. With current experts predicting that all corporations need to be more entrepreneurial to survive digital disruption, the session proved to be an excellent chance to put that advice use. Internalizing this idea was perhaps one of the biggest takeaways for the carmaker. Taking it back home to Ireland was crucial.

The road ahead

The information that Volkswagen Ireland learned this week is sure to help them with their future  development as a large company. We know that this knowledge is pivotal in the face of global trends such as decreasing car ownership and the rise of the shared economy. For today’s carmakers, there is no single solution to avoid such disruptions. It is up to their commitment to having an open mindset and coming up with creative ideas. We are excited to see how Volkswagen’s partnership with SVIC will affect their success in the future.

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