The Korean government will support start-ups in the automotive technology sector in earnest in order to promote “Korean version of Mobileye.”
This is largely due to the sense of crisis that it can’t help but be weeded out of the global autonomous vehicle market, which is an aggregate of communications network, software and mobility services, just under the oligopolistic structure of specific conglomerates. In this regard, the Ministry of Land, Infrastructure, and Transport (MOLIT) has decided to foster auto tech start-ups as part of its plan to commercialize partially-autonomous cars (Level 3) by 2020, attracting attention.
According to industry sources on March 23, the MOLIT ran contests for application development using traffic data and business ideas earlier this month, and examine the current status of domestic auto tech start-ups. Although there is a craze for “auto tech M&A” that transcends national boundaries and industries around the world, South Korea, which has been self-described as “leading car manufacturer,” is just sitting on its hands.
There are some start-ups that can be categorized as auto tech firms by supplying cloud computing-based car software development tools, in Korea. However, most other companies are just subcontractor of specific conglomerates. Moreover, the car sharing service, which is one of the mainstays of self-driving related services, is bound by various regulations.
An official from the MOLIT said, “We are seeking for numerous areas in which sector South Korea, which is a late starter in the global autonomous driving industry, can make a quantum jump. We have concluded that we need to foster and work together with auto tech start-ups armed with innovative ideas so we are grasping the current situation at home and abroad.”
It is the same reason that global automakers are flocking to Silicon Valley in the U.S. For instance, Toyota has established “Toyota Research Institute,” a subsidiary dedicated to artificial intelligence (AI), in Silicon Valley and announced its plan to invest US$1 billion (1.12 trillion won) in the autonomous driving and robot sectors in the next five years.
In the car sharing service sector, strategic partnerships are also being forged between Toyota and Uber, GM and Lyft and Volkswagen and Gett. In addition, General Motors (GM) bought Cruise Automation, which develops autonomous driving technology, for US$1 billion (1.19 trillion won).
However, some industry experts said that the government also need to create an ecosystem that can make open innovation possible with conglomerates, including Hyundai Motor Group, at the same time in its bid to support and promote auto tech start-ups.
An official from a private start-up incubator said, “GM and Google are acquiring auto tech start-ups in the autonomous driving sector one by one. As a driverless car is an amalgamation of advanced ICT, such as robot, AI and big data, the government needs to cooperate with global companies, which have leading technologies, and actively promote related start-ups and experts.”