Information technology-based change in the automotive sector

Keywords:

Abstract:

Since a few years the global automobile industry faces new unexpected competition from players from the IT industry: In 2003 a couple of entrepreneurs from the IT industry founded Tesla Motors, which has changed the industry’s view of electric vehicles completely and has become one of today’s major players in the market for electric cars and electric vehicle powertrain components. In October 2010 the internet company Google announced that it had developed self-driving cars and that it actually had been testing them on the streets of California for months. The announcement caused some uproar and soon the big automobile companies also announced plans to bring their own autonomous cars to the market within the next ten years. At the beginning of this year it was not only revealed that electronics and internet giant Apple is already developing its own electric car. In February also the internet company Uber announced its own self-driving car project.
The automobile industry is only one example of current attempts of IT companies to break into new markets. All these new market entrants can be seen as an accompaniment of a comprehensive technological upheaval, a second wave of digitization that picked up pace in recent years and that may change the whole economy significantly. This grown impact of information technologies on processes of sectoral change is in need of an explanation: at least we are talking about technologies that are not new. But although the automobile industry is developing automotive information technologies for years, new players like Tesla, Google and Apple not only seem to have accelerated the pace of innovation. In parts they even seem to have leapfrogged the traditional car makers.
Drawing on preliminary results from a current research project in the IT industry as well as on literature and media searches and using the example of the automobile industry the paper will discuss two possible reasons. First: with regard to the automobile industry information technology in recent years has changed from a technology with low transformative capacity to a technology with high transformative capacity. Main reasons not only are a dramatically accelerated technological progress in the field of information technologies and an increasing amount of IT used in the automobile but also changed business strategies in the automobile and IT industry. And second: the automobile industry not only faces a new powerful actor type that is squeezing into the automotive sector. At the same time – although the automobile industry tries to adapt to the technology-based pressure – its sectoral structures and institutions threaten to limit the industry’s adaptability.