Prof. Rupert Stadler
Chairman of the Board of Management of AUDI AG
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Commissioner Oettinger, fellow speakers, ladies and gentlemen,
This series of lectures has nearly the same title as a book that I published together with two highly esteemed colleagues from the University of St. Gallen: “How to succeed in the digital age.” In that book, business leaders such as Mathias Döpfner, Herbert Hainer and Siegfried Russwurm describe the strategies of large corporations like Axel Springer, adidas or Siemens: strategies and new business models for the 21st century. All the authors from academic or practical backgrounds agree: The role of the individual has changed fundamentally. The reason is the digitalization of all areas of life and a new understanding of oneself in our society.
Nowadays, customers want to be involved in shaping products. Any private person who owns a 3D printer can even produce the individualized result of that shaping process. Customers see themselves as at the focus and not at the end of the value chain. And when they are dissatisfied, they know how to express this dissatisfaction – in strong social networks that can have a real impact on a company.
When we today talk about the connected world of tomorrow – each from his own perspective – we have to be aware of one thing: We are not only talking about laptops und Wi-Fi hotspots. We are not only talking about Facebook and Twitter. In the future, all areas of life will be connected. In the year 2014, only seven percent of all devices worldwide were online. In five years, that proportion will already have increased to 25 percent.
Studies show: This means that we will then have 50 billion intelligent objects in the world – with sensors and interfaces. That will dramatically change our society. That’s why we are here today, because we as business representatives all want to send a signal to politicians indicating where we see a need for action and shared opportunities. I am speaking today on behalf of the German automotive industry.
I therefore ask the question: What is the role of the car in this phase of transformation? And which added value can it offer? The new car in the Internet of things is more than hardware. It is the interface between the driver and his digital life. When the car is more than hardware, we will be more than manufacturers: providers of mobility and other services, and much more.
For example, we are now carrying out a pilot project in Munich. DHL is placing customers’ purchases from Amazon into the trunk of their Audi. The connected car opens up completely new business models.
Here is a second example of how we are responsible for far more than developing and producing cars. A battery-powered car alone is not sufficient for electric mobility. We also organize services that go beyond the car: from a battery-charging infrastructure to billing software to the second use of old batteries in solar power systems.
Ladies and gentlemen,
The car of the future is growing beyond its old limits. It is becoming connected with its environment and with other road users. This results in swarm intelligence. Cars are learning how to master new traffic situations and to share that knowledge. And cities and cars are becoming connected with each other.
Cities are the main habitat of modern humans. That’s why we are primarily focusing our cars on urban requirements. But what about the sparring partner? Will the city also become intelligent? My key message for politicians is: Now is the time to occupy oneself with the technologies of tomorrow. This is the only way that our public infrastructure projects will be fit for the future. Let’s not wait for a big bang to occur. The digital revolution is taking place every day – this is the “new normal.” Business and politics in Germany must shape the future together.
People in cities suffer from a chronic shortage of time. Space is limited. And alongside all the anonymity in metropolises, digital life is promoting a new need for connectedness. And fourthly: Despite the strong urge to live in cities, their inhabitants are increasingly demanding clean air and green areas for leisure. Anyone who wants to develop an operating system for cities in the year 2030 has to operate with these variables: time, space, connectivity and sustainability. The digital world will offer us unforeseen possibilities. Our vision is an intelligent car in a smart city, everything in a flow and synchronized with each other.
Just think of all the information on the traffic situation. It makes a difference whether you simply drive into a traffic jam, or hear a traffic announcement by chance, or see how your navigation system automatically plans your route anew, or know that data on traffic density and speed from other road users’ smartphones is flowing into the calculation in real time. We want more. Just imagine a smart city that takes account of planned road blocks or expected disturbances before any hindrances are caused. This example alone shows that it is worth creating interfaces between cities and mobility.
Digitalization is the key. The intelligent objects that I mentioned will soon include stop lights, traffic signs, parking spaces, charging stations, buses, trains, bicycles and cars. This is a project with a long-term perspective. A project that will only succeed if we synchronize our planning today. We know that 75 percent of the urban infrastructure of the year 2050 has not yet been built today. This is a great opportunity. Every infrastructure will have its own digital operating system. To make sure that all of that is compatible, we need new forms of cooperation.
I will describe this to you with the example of stop-light info online. It calculates the optimal speed for drivers to encounter the “green wave” (all lights on green). Already in 2013, 700 sets of stop lights in Berlin were connected to our system. If we had stop-light info online all over Germany, we could reduce fuel consumption by 15 percent, which adds up to 900 million liters a year! Fuel costs would be cut by more than a billion euros. CO2 emissions would be reduced by over two million tons. If we introduce this technology to the benefit of our customers, we need the cities to install connected stop lights quickly. We need uniform data formats, platforms and standards.
Or take the example of piloted driving. The driver will soon be able to let go of the steering wheel and leave steering, overtaking, accelerating and braking to the system. The driver decides when the system should take over. When driving is boring in traffic jams, attention suffers. That increases the risk of an accident. Or when driving is too demanding in dangerous situations, the car provides help with intelligent assistants (brakes, avoidance). Or thirdly, when the driver is diverted by a telephone call or wants to do something urgent.
For controlled environments such as an autobahn, this is no longer a vision. Transport Minister Alexander Dobrindt recently experienced it himself a behind the wheel of an Audi, but without any hands on that steering wheel, driving at 130 km/h. For the start of the first Consumer Electronics Show in Asia, we arranged for a car to drive in piloted mode through the heavy traffic of Shanghai. 90 percent of all accidents are caused by human failure. Piloted driving will therefore increase safety enormously.
Which obstacles exist? At present, the international “Vienna Convention on Road Traffic.” The trouble is that it’s from the year 1968, so it’s half a century old. It states that the driver of a vehicle (or person in charge of animals) must always be in a position to master his vehicle. What does that mean today? Always having one’s hand on the steering wheel, as prescribed by traffic law? But there were no electronics or computers in cars at that time – in 1968.
Fortunately, the UN Transport Committee has recognized this: It is important to create the legal basis for piloted driving: from driver liability to product liability and black box and insurance. And, according to which ethics does a piloted car make decisions in critical situations? Piloted parking will also result in enormous added value. The space required in a parking garage is reduced by one third because no space is needed for getting out of and into the car. In this way, cities will gain space for parks for example.
And with autonomous driving functions – on separate roads – it might be possible in the distant future to let one’s car park itself a few hundred meters from one’s destination in a city center, where the price of land is considerably lower. If one thing is limited in cities, it is space. Automotive innovations could give us more time and space. When we install sensors in the parking garages in this country, they will identify vacant spaces and report on them. Smart parking without long searches can reduce CO2 emissions by 30 percent.
Technology can make our lives easier. What we need is a shared social understanding of how we want to use technology in the future for more safety, efficiency, sustainability and quality of life for us all. All of that can be promoted by technological progress in cars.
Germany has an excellent starting point when we remain aware of our own strengths: scientific excellence, expertise in planning and responsible, and innovative entrepreneurship. We need a digital educational initiative in line with the changing tasks and occupations ahead of us.
Ladies and gentlemen,
I regard defining the role of intelligent mobility in a modern society as one of the most exciting challenges. In tackling this task, we welcome new market players. Eric Schmidt of Google will make a speech here this evening. Whether from his online group in the United States, or the Chinese counterpart Baidu, or Apple or Uber or other market entrants, we see that the car is incredibly attractive for the IT sector.
For the German automotive industry, it has been the core business for the past 130 years. For you, Mr. Schmidt, it has just recently become interesting – and for several reasons: First: With 5,000 computer chips on board, an Audi is the biggest mobile device nowadays. And thanks to partners such as Huawei, it is also in the fast lane on the Internet highway with LTE. Second: By, 2020, half of the value added in a car will be digital. Third: When a car driver lets go of the steering wheel, he can mover over to the data highway. The car becomes a high-revenue point-of-sale. And the fourth reason is why many IT companies are pricking up their ears: The connected car is home to an incredible amount of data. Who is on the road when, where and with which destination? And much more. This gives rise to a clear profile with which one could monetize the car driver in a wonderful way – he quickly becomes a “target” for the advertising industry. I say: could. Because we in the German automotive industry see this rather differently. Do you remember my first words? The customer wants to be at the focus – and does not want to be exploited. He wasn’t to be the master of his own data – and not transparent to all. And we take that seriously.
The car industry is dynamic – but not a start-up. People trust us with their lives. Because they depend on us – as in the past 130 years – thoroughly testing the safety of every technology. A smartphone that you leave in the sun reacts with the simple error message “device overheating.” It no longer functions. Our cars withstand sub-zero temperatures down to minus 40 degrees Celsius and searing heat up to 85 °C. Programs on a PC frequently crash. The only thing that helps then is a restart. Just imagine something like that on the highway at 200 kilometers per hour. Breakdowns like that may not happen in a car. On the Internet, cookies and other data collectors have become normal. A car is one’s second living room today. That’s private! The only person who needs access to the data onboard is the customer!
Ladies and gentlemen,
On our journey through time and into the future, we will certainly have to reconsider many legal concepts and social norms. I personally advocate a balance between values and change. We may not throw everything overboard for new technical possibilities. With all the optimism that we will be able to improve our society: We have an historic task that goes beyond bits and bytes. With our actions, we are laying the groundwork today for the shape of the life and welfare of future generations.
There are many things to be defined: a shared understanding for the protection of privacy, rules for the application of big data, ethics for dealing with automation in our everyday lives: How can we let computers that relieve us of tasks make decisions?
And it is important to maintain standards that protect our customers’ trust and security. If we don’t do that, it will inevitably lead to technology phobia on the part of consumers. I am convinced, Germany as a location for advanced technology will continue to be a leader also in this area of responsibility. Then, customers’ acceptance will automatically follow. Thank you.