Silicon Valley, Detroit team up to spur U.S. innovation

DETROIT — About a decade ago, the computer business seemed to be everything the auto industry was not: fast-growing, cutting-edge and cool.

But since the recession, the two industries have been converging at an ever-increasing pace, creating business opportunities and jobs as well as a burst of badly needed innovation. Analysts say the combined effort is helping to usher in a period of prosperity for the once-troubled auto industry.

As thousands of car enthusiasts and industry insiders gather at the North American International Auto Show here, much of the buzz is about how computer and mobile technology is fueling an automotive transformation that some analysts say rivals anything in the past.

Vehicles connected to the Web herald a new era, when cars will allow drivers seamless access to their business and social networks. The cars open the possibility for new forms of entertainment, information and safety for consumers, and new revenue streams for automakers, mobile carriers, app makers and online information companies.

By some estimates, 40 percent of a car's sales value is linked to computers and other technology, roughly double what it was 15 years ago. That is expected to escalate.

In recent years, a succession of major carmakers, including Ford, General Motors and BMW, have established research laboratories in Silicon Valley. There, they are working on adapting fast-changing computer technology to a business that, until recently, focused on mechanical innovation.

From their beachheads in the world's technology capital, they are keeping an open door to tech startups and entrepreneurs and collaborating with behemoths such as Google, Apple and Microsoft, aimed at bringing more mobile computing power to cars.

“We are here to find the new technologies that are going to make cars better and safer,” said Frankie James, manager of GM's advanced technology office in Silicon Valley.

The long-anticipated self-driving car, which automakers say could be a widely marketed commercial reality as soon as 2020, is a testament to the computer engineers who are honing the intricate network of lasers, sensors, cameras, and car-to-car and car-to infrastructure telecommunications that are making the autonomous vehicles possible.

“It is a brave new world, and, obviously, a lot of that telecommunications and app-making skill set lies outside of the auto industry,” said Richard Wallace, director of transportation systems analysis at the Center for Automotive Research. “It is a logical link for the Silicon Valley companies to start playing in that.”

Meanwhile, more than ever, carmakers are competing with computer and software companies for talented engineers, who are showing new enthusiasm for applying their skills to the automotive industry.

“Not that long ago, the auto industry did not look that interesting to a lot of our students,” said David Munson, dean of the University of Michigan's College of Engineering, which has 9,000 students. “But I do think that has changed a lot.”

Not all recent auto innovation is linked to computer technology. On Monday, Ford showed off a new F-series pickup truck with a body built almost entirely of aluminum rather than steel. The change lops 700 pounds from the 5,000-pound truck, the nation's best-selling vehicle for 32 years, allowing for smaller engines and better fuel economy without a loss of power, the company says.

After nearly collapsing during the recession, the domestic auto industry is one of the brightest spots in the nation's otherwise sluggish economic recovery. Car companies are enjoying robust sales, adding jobs and, some say, entering a new phase of a transportation revolution. Much of that change is possible because of another industry that has boomed while the economy has struggled: smartphones and mobile technology.

Just as the advent of the Model T made it possible for the first time for Americans to routinely venture dozens and even hundreds of miles away from home, the wave of technology that is becoming increasingly central to cars offers tantalizing possibilities.

Some cars offer accident-avoidance systems, automated parallel parking and entertainment systems that drivers can control with their voice. Analysts expect those technologies to mushroom into a business worth tens of billions of dollars in the next decade.

Last week, Audi and GM unveiled plans to outfit some of their cars with Wi-Fi. And companies including Honda, Hyundai, Audi and GM announced that they will put Google's Android operating system in new cars, opening those autos up to a variety of apps and other software.

“The software platforms in our personal computers and smartphones are moving to the car,” said Egil Juliussen, an automotive analyst at IHS, a marketing and economic research firm. “Both sides need help with that. And the overlap between the computer and car industry is growing substantially and will continue to over the next decade.”

Meanwhile, French company Induct has announced the Navia, an electric shuttle that will be operated without a driver. The vehicle costs $250,000 and will travel only 12 miles an hour. But the sensors and lasers that allow it to avoid obstacles offer a peek at what cars will offer in the near future. IHS predicts that there will be 54 million self-driving cars on highways globally by 2035.

Auto connectivity means new customers for app makers and computer companies. It also promises to deliver a lucrative and captive market — drivers who spend an average of an hour a day in their cars — to advertisers.

In addition, programmers will be needed to organize and make sense of the trove of analytic data streaming from cars. That information has the potential to help manufacturers tweak their designs and better sell their vehicle-maintenance services.

The technology is making cars more expensive. Prices have been creeping up in recent years, and that is likely to continue as car companies market their products not only on traditional measures, such as horsepower and fuel efficiency, but also on the kind of computer services a driver can enjoy.

“There are a lot of drivers who are more interested in their car's infotainment system than the powertrain,” said James, of GM's Silicon Valley office. “For them, it is not so much the size of the engine but things like how well do their phones interact with a car's infotainment system.”