Like it or not, the future depicted in all manner of 1960s science fiction films and TV shows is fast upon us, with the mass deployment of driverless vehicles expected to arrive in the next few years for many developed nations. The UK government is keen to get on board this autonomous train and it will be thanks in part to the innovative abilities of the start-up community that it moves full steam ahead.

Our recently published article, Development of driverless vehicles in the United Kingdom, stated that the UK has comparative and competitive advantage in some of the key sectors that are crucial for the rise of the industry. These include auto manufacturing, technology and finance. What's more, getting first-mover advantage can lead to longer-term pre-eminence in this field for decades to come.

This area is so wide open for development that everything is to play for—which technologies, what standards, where they are used and by whom. The advantages that usually accrue to larger or better-capitalised companies seem not to matter in this brave new world. The big auto manufacturers and tech companies have definitely taken note and are keen to partner up with smaller, more nimble start-ups, through outright acquisitions, joint ventures and licensing arrangements, to ensure they have the capabilities to win.

Auto manufacturing

The UK is one of the top auto manufacturers in the world. Its plants are among the most efficient in Europe. In recent years, auto makers have recognised the role that tech will play in the vehicles of the future and are snapping up start-ups to acquire the necessary expertise. As an example, the current value of the automobile is 90 percent hardware and 10 percent software. In the next 10 years, this is predicted to shift, to 40 percent hardware, 40 percent software and 20 percent content—when humans are doing less of the driving, they can spend more time being entertained!

Technology

The mobility ecosystem of the future will create business segments that don't exist today. Mobility advisors, in-transit vehicle experience managers, battery lifecycle managers—these are roles that will become increasingly important as transportation is increasingly consumed as a mobility service. UK capabilities in this space—particularly in data analytics, user experience design and cyber and security services—mean that small, innovative companies are poised to play a big role.

Finance:

It is no secret that a lot of the UK's innovative talent is drawn to Fintech. We expect to see insurance, vehicle finance and payments massively disrupted in the new mobility ecosystem. People are increasingly familiar with usage-based insurance, and it will not be long before in-vehicle purchases and usage-based road charging becomes the norm.

The UK Government has committed to developing a world-class driverless vehicle industry. But more needs to be done. Infrastructure must be made ready for these futuristic vehicles, and our research shows that the public very much looks to the government to designate them as safe. There needs to be more real-time testing on roads, more funding for projects that really move the needle, and a reform of patient finance to help start-ups to scale up. It is not just the big players that will benefit, but also the smaller, nimbler companies that will drive this sector to the future.

Going forward, this is a very exciting time for start-ups to strut their stuff. We expect interesting and innovative consortia to form—through government-sponsored projects and the arrival of manufacturers and tech companies to do real-time testing. The potential for transferable tech to cross over from one sector to another has never been more open. We'd like to see more partnering, whether it be through projects, purchase, or licensing. The environment is supportive and the big players are recognising they need the agility and blue-sky thinking of more nimble players. The race is on!

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