Driverless cars: the war for talent
To succeed in the driverless car race, manufacturers and automotive suppliers will need to attract the right talent. Industry expert Christoph Schlegel explains which graduates will be in high demand for those jobs, how traditional companies can attract them, and what Dieter Zetsche’s cowboy hat has to do with that.
2025AD: Mr Schlegel, how is digitalization changing the car industry?
Christoph Schlegel: Let’s start with a symbolic transformation: In the past, Daimler CEO Dieter Zetsche made most of his public appearances at motor shows wearing suit and tie. This March, for the first time in his life, he went to the music and technology Festival South by Southwest (SXSW) in Texas. There he first wore sneakers and a baseball cap and later changed into leather boots and a cowboy hat.
2025AD: In what way is this significant?
Schlegel: Zetsche wanted to send out two signals from Texas: First, Daimler has changed from a car manufacturer into a technology company that competes with Google and Tesla and provides access to all sorts of mobility. Zetsche’s second signal went to young graduates: “Look, the atmosphere at Daimler isn’t dominated by suit-wearing bosses who imposed a hierarchical structure of command-and-control. Instead Daimler is cooler with more space for creativity.”
2025AD: Why does Zetsche want to change Daimler’s image so radically?
Schlegel: Because he recognizes a fundamental shift: According to our calculation the monetary volume of the global market for advanced driver assistance features and autonomous driving will increase by 12-14% per year till 2025. Hardly any market in the world has such growth rates. Driver assistance will become a standard feature in most cars and we might soon be able to use the first robot-taxis.
2025AD: How can companies successfully compete in this market?
Schlegel: The crucial factor will be attracting the right talent. Car manufacturers like Daimler have already assigned 1000-1500 engineers to that technology and many suppliers have such teams as well. But their main difficulty will be finding more. For one thing, only few of these experts exist. And they are sought after by numerous employers, ranging from manufacturers, financial services firms to tech giants like Apple, Facebook or Microsoft. These companies pay high salaries and usually provide the kind of environment with space for independent thinking, flat hierarchies and free lunches.
2025AD: What kind of experts do car manufacturers and suppliers need?
Schlegel: So far they have employed many mechanical engineers who build hardware like motors and gearboxes. Plus, they use application engineers who adapt current products, like car brakes, to new model series. These people are still necessary, the demand for them will remain constant.
2025AD: And who will be needed to work on autonomous cars?
Schlegel: Different experts are necessary for each level of the so-called “ADAS/AD technology stack”: On the sensor-level physicists need to develop high-performance, yet affordable radars and optical lasers, so-called LiDARs, to measure the distance to objects for 3D scans of the environment. On the computing-level chip designers have to speed up central processing units while keeping energy consumption and costs low. The most innovative work however, is required on the final two levels: Software engineers need to write algorithms that use the data to build models of the environment. Computer vision and data fusion are critical components here. And finally, based on these models they have to create self-driving-rules so that cars can decide: “Do I stop or accelerate?” Thus cars will have to simulate human cognition and use machine learning and artificial intelligence. But that is a field that many companies are trying to get into.
2025AD: How can automotive suppliers win this war for talent?
Schlegel: First they have to strategically decide, how much they really want to change. By 2025 we expect the global market for autonomous driving to be not larger than 26 Billion U.S. Dollars. However, already today the annual revenue of big automotive suppliers is more than 40 Billion Euros, and often, these are diversified companies catering to many needs of the OEMs beyond driver assistance. These suppliers probably don’t want to transform entirely into software specialists and jeopardize their original business. Then their challenge is: How do you remain true to your core business, while creating an atmosphere with the features that attract graduates: flexible hierarchies, fast-paced work and innovative thinking.
2025AD: And what is the solution for that challenge?
Schlegel: There are two possible ways: Either spin-offs or acquisitions of start-ups that remain independent.
2025AD: What are the advantages of each of these models?
Schlegel: With a spin-off you take some of your own employees and intellectual property to start a separate business. This new business can then work like a start-up: quickly and creatively.
2025AD: And acquisitions?
Schlegel: If automotive suppliers feel that they need more external talent from the start they can purchase companies with their patents and their staff. Since they buy a company in order to hire, this form of acquiring a start-up is often referred to as acqui-hiring. However, the start-up should not be integrated into the parent company. It is better to keep it as a separate entity. In that way you maintain the start-up spirit and reputation to keep up the fast-paced work. Then you can keep attracting more talent.
About our expert:
Christoph Schlegel is a partner at Bain & Company, the management consultancy. He is an expert for strategy development in uncertain technological environments. He studied at the London School of Economics and the University of St. Gallen, from where he holds an MA. He recently co-published the study „An Autonomous Car Roadmap for Suppliers“.