Climate Change, Brexit, Bitcoin, Gen Y and the Automotive industry – A Message of Hope

“I don’t want your hope. I want you to panic…and act.” Greta Thunberg.

Could this be one of the most important quotes of recent times? Is this a real wake up call to those who have been wallowing in the uncertainty of expedient decision-making?

Greta’s comments potent and apposite have brought worldwide attention to her words and actions, specifically for the young and ignited a worldwide movement for school strikes and city disruption. Actions that, in general, have been greeted with condescension and myopic reaction by the mainstream media.

The urgency and angst of a knowledgeable 15 year old speaking at the World Economic Forum in Davos and the TED Talk appearances has exposed the uncomfortable truth of governmental and institutional prevarication of a nightmare future of the worlds ecosystems irreversibly damaged by the actions of recent generations, a frighteningly close future that will condemn Greta’s future and those of her children unless we do something.

Climate change constitutes many aspects of human existence including natural variants effecting global temperature levels with the carbon dioxide emission challenges especially urgent in the emerging industrial regions but predominently that of fossil fuel burning.

The stark reality of the burning of fossil fuels on our planets temperature rise has always been subject to scientific debate and counter argument and so the fight for action is in conflict with the forces protectionism, cognitive dissonance and denial by some world leaders believing its all a hoax. Indeed only as far back as February this year at the Parliamentary Climate Change debate there was an embarrassingly lacklustre attendance from both sides of the house.

Is this an indication of ambivalence by government or negligence?

Awareness to the climate change issue is now not a fringe activity but is energising mainstream action and activation and so, is it up to the protests and affirmative action to call-out anything other than full commitment to stopping the rise to a 1.5 degrees warmer world?

Time will tell if urgency to this issue is acted upon but it is clear that transportation is a major negative contributor. Aviation has a bigger nut to crack, but exciting hybrid technology is being tested by the aircraft manufactures that could help lower the carbon emissions that create such a signifcant industry issue as with the automotive industry which has to play a central role in a zero carbon future.  The industry is making strides into alternative fuels and has done for some years, however it needs to take ownership of a collaborative solution and adopt disruptive thinking and decisive action with the creation of zero carbon vehicles that are available to everyone.

It is clear that the industry needs to adapt and change to allow us to convince Greta and all young people that we can affect action, at least action from an automotive aspect to the climate issue, but could this be the opportunity that the industry needs to grasp? Indeed positive action, by its nature, will create environmental net benefits but also presents huge industrial opportunities, ironically and specifically within the automotive industry.

So how did we get here?

The growth of 20th century transportation demands outpaced our understanding of the environmental impact, and has meant that the industry and policy makers have been playing catch up to keep awake to the environmental lobbying implementing incremental changes while balancing big business economics and the oil industry interests, so the agenda has always historically been met with huge inertia.

Furthemore, cleaning up its act has been met with fragmented, inconsistent and differing solutions for the same problem, however, recent moves to a low and zero carbon emission vision are positive, but it is still clear that a trickle down effort has not been fast enough to result in the production of affordable zero emission vehicles.

Advances in alternative fuel technology have been growing significantly over the last decade or so and come in many guises including biofuels, pure electric and hydrogen cells with each solution having both positive and negative features and benefits but in reality the industry has collectively ignored a mainstream solution and consistently kept in innovation siloes.

So could the future be electric?

We do not have to look too far back to know that initial electric vehicles (EV’s) were roundly met with derision and blighted by the miserable image of a G-Whiz or milk float that eliminated any widespread appeal. Thankfully this has significantly changed and EV’s are now ‘sexy’, thanks to Mr Musk, et al.

Even with an improved image, there are many challenges for pure electric vehicles, not withstanding how our infrastructures generate electricity, battery production, the sustainability of the precious materials used in manufacturing and the environmental impact thier use has but perhaps more significant are the economics of wholesale change to EV, or alterative, a change that will only be effective when the cost of building EV’s, in numbers, is ultimately closer to that of internal combustion engine (ICE) production.

Major consumer appeal will only properly occur when the purchase price is equivalent or lower than internal combustion vehicles or the tax incentives (currently diminishing) ignite sales.

Fortunately, Tesla’s Model 3 is seeking to challenge this paradigm with a price point deliberately positioned to have more equivalence to traditional competitive cars, a hugely brave and important step but one that has unnerved shareholders in the company.

Of course an EV future needs to overcome shortcomings in power generation, charging infrastructure and the recycling of batteries each facet needing investment and innovation as well as being solutions that, themselves must be environmentally sympathetic, some of these issues could be overcome with the innovations in Fuel Cell Electric Vehicles (FCEV) using hydrogen fuel cells to power vehicles, amongst other alternative breakthroughs.

So will the automotive leviations step up to the plate?

The landscape of the automotive industry, like so many leviathan industries has examples of protectionism and legislative cockups that have created poorly thought through policy, eclipsed by the legislation encumbered on the automotive industry by policy makers.

Unfortunately, the automotive industry operates mostly to a short-termist agenda. This is highlighted by their approach to cleaning up thier act and to reduce CO2 emissions that presented a fork in the road for the industry to take a completely holistic approach to an environmentally smarter opportunity to innovate the alternative fuels for a zero emission target that could have been ahead of its time. Sadly, the industry decided placate the environmental lobbyists with a switch to diesel. An opportunity missed.

Clearly the industry, guided by legislators, did not fully engage or understand the consequences of significantly increasing diesel fuelled cars on our roads and has ultimately exposed the lies to the legislators and customers whilst ‘knowingly’ contributing to increasing toxic air levels in our cities shifting the emphasis and delaying the problem, a misjudgement on an epic scale. A past that could have been rewritten with different horizon thinking.

Imagine if the $2.8 billion levied in fines on the VW Group as a result of dieselgate was invested in proper zero carbon innovation, this could have put VW at the forefront of EV or alternative low carbon technology instead it risked industry reputational damage, and although when called out, they presented an embarrassing apology, but much like the banking crisis a ring of protectionism and denial of culpabilty by high level management pevaded to sanctioned widespread practices.

Ironically, the result of widespread dishonest industrial practice has actually lead to these businesses now increasing investment in their EV and alternative drivetrain strategies, previously confined to tinkering R&D departments.

Changing this paradigm of legislative and big business short termism is an essential element to any successful future vision for zero emission transportation.

Perhaps we can see a comparison here…

The result now is that the big automakers have been seen to be ‘untrustworthy’ a position akin to the banking system, to its regulators, and the ultimate failure to protect its customers and the governmental denial of ‘boom and bust’ economics.

The fallout maelstrom bestowed on the banking and regulatory institutions resulted in the momentous publication of a whitepaper in 2008 by Satoshi Nakamoto that contested decentralisation from the distrusted banking institutions was possible and coule be achieved with disruptive technology and digital money. Bitcoin was launched and from it came the rise of the crypto movement.

The idea at the heart of Bitcoin is to design technology that cannot be controlled by a single entity to avoid negative monopolistic behaviours. The removal of centralisation or at least attempting to limit control is the mission statement for thousands of crypto projects that have emerged over the last 10 years.

Nakamoto’s whitepaper has undoubtedly resulted in the disrupting of the financial industry in a way that has the potential to dominate the future of all financial transactions and a movement that now sees the central banks, financial institutions and regulators, with some reluctance, starting to grasp the inevitability of the disruption and opportunity.

So, is it time for a similar revolution for the automotive industry?

Similarities can be drawn from the two industries when considering the banking and finance landscape is busy with small Fintech disrupting businesses, much like the automotive industry. Innovation horizon thinkers and start-up enterprises helping push the automotive agenda are disrupting the existing patterns that filter to the automotive manufacturers and ultimately to the legislators.

Maybe the publication of an industry whitepaper, Nakamoto style, that states the disruptive opportunity in a cohesive and decentralised way that can further ignite entrepreneurial endeavour to take on the heavy lifting of change from our institutions?

Peeling back the onion and getting closer to home… and the ‘B’ Word…

So from a UK standpoint, central government support of our indigenous car businesses has dwindled since the demise from the failing nationalised industry of the 70’s followed by decades of stealth selling of our treasured marques. The backdrop therefore has evolved not from a direct support of central government such as the German, Spanish and French governments do, but from entrepreneurial, innovative agile niche vehicle creators and support companies.

The net result has been that over time, the UK automotive industry backdrop has evolved to become a centre of excellence for manufacturing predominantly for satellite overseas corporates. So unsurprisingly, we now see the UK automotive industry at the heart of political posturing and debate defining the uncertainty of BREXIT with questions being posed in relation to the overseas investment and strategic locations of Toyota, Nissan and BMW Mini, and even to a certain extent JLR (Jaguar Land Rover).

Whilst this uncertainty is alarming for these large businesses it may dictate a significant medium term change in the UK automotive landscape, irrespective to the result of the UK’s withdrawal from the EU where confidence will be damaged.

This is the negative industry outlook highlighted to the public at large and whilst a significant feature, ignores the excellent automotive SME landscape and one that can be more agile and flexible to absorb what might transpire for the UK’s future with the EU. What this requires would be the rather simple step, but fundamental by central government to rethink and to focus on boosting the SME opportunity horizons needed to backfill the potential automotive manufacturing void.

Even a light scratching on the surface of the UK automotive industry beyond the brand leviathans unearths truly inspiring businesses, people and quorums dedicated to exceptional innovations in manufacturing, materials, zero carbon and future mobility technologies, these are the people that need to inspire our automotive future, and must be part of an industry whitepaper.

Perhaps it is a little disingenuous to suggest the UK government as unsupportive to the SME automotive industry especially when considering the recent investment announcement of £246 million into battery technology innovations. A market incidentally, that is forecast to be worth $93.94 billion by 2026 so the investment does look a little tight when compared to a proposed £59 billion on HS2 and whilst not a truly comparative example, increased investment into the battery technology would help the UK to be a global ‘go to’ battery technology destination and therefore help support the industry and attract investment that can be returned many times over.

This is just one example of an opportunity ahead in Future Mobility that includes the delivery of zero emission, autonomous, connected vehicles, Smart Cities, 5G and Big Data, lightweight materials, blockchain supply chain, vehicle sharing services and infrastructure both car to plug and plug to grid. So it does not take the brains of a rocket scientist to realise that if we get this right, the potential results could provide extraordinarily strong medium and long-term economic growth, not to mention the dividends to the economy in terms of GDP and youth employment, but also benefits of social wellbeing and confidence, cleaner city air and zero emission transportation for all.

Of course this technology journey needs to be accompanied by connecting and inspiring the young via academia, skills and vocational training.

Key to this is also a long-term investment strategy primarily focused on private investment that uses crowdfunding, both debt and equity at its core to allow anyone to invest in the profitable future of the nation. The creation of a central private equity fund focused on investment into these innovations that shares in the success of an exciting growing industrial future ultimately contributing to the UK as the destination of choice for automotive and zero carbon excellence.

The good news is that the UK is already awash with technically gifted, skilled and innovative people with some of the most exciting SME businesses already delivering Future Mobility innovations across the board and who can provide the mentorship to the young entrepreneurs.

Also a connected, collaborative vision could see amazing advances and momentum with 5G provision, smart cities, vehicle sharing services that will ultimately lead to safer journeys, less congestion and lower environmental damage with the added benefit of institutional decentralisation.

So by embracing agile start up approaches that directly engages young people to be the driving force to the forward direction, supported by the wealth of experience already available and combining this with the uncluttered visions of young people is surely a positive combination, right?

As an example of a collaborative approach, China, has set up the EV100 program initiated to create a cohesive and proactive forum that brings together manufacturers and suppliers into a collaborative push of the EV agenda and one that crucially includes power infrastructure. An initiative that the UK could benefit from mimicking, indeed, what is clear is that China yearns access to the leading edge innovation and technology that the UK consistently excels in providing.

Sounds like an opportunity?

Clearly, grasping the opportunity can directly create meaningful jobs throughout the entire automotive and related industries with a process maximising the advantages and advances as part of the 4th Industrial Revolution and the amazing potential of the digital world.

The positive horizon for the automotive industry will include a huge opportunity for collaboration and cooperation on an industrial scale, where connected thinking and action will come from a quorum across business both technical and commercial and engagement with future generations.

If we are looking to decentralise the norm to make changes, what can blockchain offer?

As the article title suggests, where does blockchain fit in? So, forget Bitcoin for a moment the real technological breakthrough for crypto is blockchain and has been the consensus model of peer-to-peer transactions without the need for a central entity, such as a bank. This is especially interesting as each transaction via a blockchain is immutable and will reside on a life long ledger. This is fundamental to Bitcoin and other crypotocurrencies but also can be used affectively in industrial functions and supply chains.

Integrated supply chains are incredibly complex, consisting of numerous types of parts, hardware, software, firmware suppliers, distributors, dealers, regulatory agencies and insurance companies. Trusted suppliers are thoughtfully selected and managed, as well as checked and certified for quality, reliability and consistency. Blockchain technology enables the development of secure digital product memory records from the source of the raw materials, to how and where they were manufactured, including maintenance and recall history with product and assembly ownership, authenticity, trading, purchase and license use of each component can be protected with blockchains, allowing multiple supply chain partners to collaborate easily.

Blockchains could significantly streamline supply chain processes, especially those that rely on regulatory and compliance approvals, but moreover, blockchain is a foundational technology that has opened up a world of innovative opportunities for the automotive industry. OEMs could use blockchain technology as a platform to enhance their overall cybersecurity for vehicles, validate software bills of materials, enable secure micropayments, strengthen identity management and improve data validation. Therefore, it seems apposite to include this technology to deliver a practical and truly future-progressive platform from which to deliver decentralised change.

So blockchain can be at the heart of an automotive industrial revolution!

 So who is going to initiate the industrial change needed?

Is action more likely to come from entrepreneurs, new horizon thinkers, and specifically from the young who can carry optimism forward?

That said, regrettably it seems that Generation Y are not, on the whole taken seriously. The environment of negative affirmation defining the young as a feckless and a lazy generation could not be further from the truth and deflects from many inspiring, intelligent and motivated young people.

Thankfully the automotive industry does have fantastic industry forums, predominantly focused on SME manufacturers and supply chain and these can and should, act as the catalyst for engagement of the young and act as the proving grounds for mentoring and trusting the stars of the future.

Perhaps the change has already started; enter the upstarts!

Automotive industry upstarts such as Tesla have shaken the tree and disrupted the industry norm to deliver electric vehicles once seen as unexciting but now as sexy, cool and desirable. This is primarily as a direct result of the visionaries who head up such companies and the agility of small businesses to implement new technology horizons that attack challenges such the climate change head-on where disruption is a fundamental to their business ethos.

Moreover, the disruptive visions of such companies like Tesla that take a more holistic view of the industry will be an intrinsic influencers to future of transportation that include autonomous, Big Data, A.I., IoT and vehicle sharing, this is known as Future Mobility. Moreover, innovation progress is becoming more realisable with extensive use of 4th Industrial Revolution (4IR) production techniques such as additive manufacturing (3D printing) and digital simulation though Fluid Dynamics (CFD) that create efficiencies of product manufacture and of rapid prototyping. Both Future Mobility and 4IR constitute a huge opportunity.

What can we learn about our past failure?

As Eleanor Roosevelt put it: ‘Learn from the mistakes of others. You can’t live long enough to make them all yourself’.

In a complex world, failure is inevitable and this is precisely why learning from mistakes is so imperative and any cohesive dynamic approach to the industrial and environmental  challenges will need to evolve from lessons of the past, the failures and errors reported and understood and actioned within a fail fast, agile methodology that has at its heart mechanisms that guide learning and self correction. It is incumbent for us to engender and encourage the entrepreneurial landscape to initiate systems that encourage learning from mistakes and errors, so, it’s not enough to use empirical data to make change, it needs a vision, mind-set and acceptance of failures, past and future, that will win for the collective good.

So who will be pushing the needle?

Although change is difficult without the listening or backing of policy makers, perhaps the real hope for disruption must come from the young and the call to action is to ensure that the young are empowered into driving the opportunities for a zero carbon industrial revolution and who ultimately influence the overall outcome. Let us not forget, it is their future too!

The challenges faced by our planet whilst existential may just offer amazing opportunities, either pushed by impending disaster or whether by human desire to reverse the environmental path.  Humanity tends to find the answers, but the climate change endeavour is like no other challenge previously faced, but the opportunity exists for a joined up vision with collaboration and cooperation both local and global at its core that can ignite innovations focused on the climate change agenda and in an environment of optimism to tackle the issue but also create a opportunity out of adversity. Stars can’t shine without darkness…

So zero carbon, future mobility realised by the power of 4th Industrial Revolution and fundamentally driven by the young…

So this is time to act, the danger is not that we shall aim too high and miss; the real danger is that we train our eyes to the floor and end up there…

Ian Howe.