SwampFox

BMW is the model that led to Boeing, so let's start now in creating the next CU-ICAR

Submitted by: John Warner on Nov 03, 2009 at 11:51 am Tagged with: Automotive, Aviation, Economic Development, Innovation Source: Swamp Fox

BMW is widely recognized as the greatest industrial recruitment success in South Carolina history. The recent recruitment of Boeing has a potential economic impact to the state bigger than BMW.

Two decades ago, BMW Manufacturing was recruited to South Carolina. As important as BMW and its suppliers are to the state, branch manufacturing is low value added on the entire chain from the design of the product through production, sales and service. The most significant value is created where the product is designed, which too often for South Carolina is somewhere else.

A decade ago, a variety of conversations began that ultimately resulted in a partnership between BMW, Clemson, Michelin, Timken, state and local governments, and others to create the Clemson University International Center for Automotive Research. What makes CU-ICAR a truly transformative economic development model, and what should inform our thoughts about Boeing, is that we have leveraged the industrial recruitment success of BMW Manufacturing to begin to transform South Carolina's culture and economy by getting us on the front end of innovation, where most of the value is created.

The automotive industry is being radically transformed, much the way the computer industry was in the 1970s and 1980s. Prior to that time, vertically integrated companies like IBM and DEC designed, produced, sold and serviced computers soup to nuts. As computer technology matured, innovation shifted to companies making components, like Microsoft and Intel. New companies appeared, like Compaq and Dell, with new business models and supply chains to assemble standardized components into computers. This gale of creative destruction blew DEC away, and IBM had to reinvent itself to survive.

A similar phenomenon is occurring today in the automotive industry, with GM, Chrysler and others feeling the full force of a similar storm. Innovation is shifting from those who assemble cars to component suppliers. New companies are being formed to assemble standardized components into novel transportation solutions. Tesla, a start-up not in Detroit but in Silicon Valley, designed and produces an all electric sports car. Carbon Motors developed a vehicle from the ground up as a police cruiser. Infra red scanners read the license plates of cars in front and behind the cruiser, connect to databases outside the car, and alert the officer to fugitives on the road nearby. The rapid pace of change in the automotive industry is being accelerated by the increase in information technology inside and connectivity to databases outside the vehicle.

South Carolina is well positioned to be at the epicenter of the global transformation of the automotive industry. At the core of CU-ICAR is the discipline of systems integration to create novel vehicles. The recently announced Deep Orange initiative will transform the Carroll A. Campbell Jr. Graduate Engineering Center, which houses Clemson’s automotive engineering master’s and doctoral degree programs, into an innovative model automotive manufacturer and supplier. Students, faculty and participating partners will engineer and manufacture a new vehicle prototype each year, giving the students experience in vehicle design, development, prototyping and production planning from their entry into the program until graduation.

CU-ICAR has already successfully attracted the innovative portions of companies to the Upstate. Across the street from the Campbell Graduate Engineering Center is the BMW Information Technology Research Center and Timken Research. The Michelin Americas Research Company, which predates CU-ICAR in Greenville, has a strong working relationship with Clemson. American Titanium Works recently announced not only a manufacturing facility in Laurens County, by also a research facility at CU-ICAR.

It was two decades between BMW and Boeing. As huge as Boeing is for us, if we are not careful the Boeing announcement will reinforce bad habits among many politicians and economic development professionals that bagging a buffalo occasionally is the pinnacle of success. Industrial recruiting is a part of the comprehensive economic development strategy that South Carolina needs to prosper, but it is only a part of that strategy. Recruiting a major economic anchor like Boeing should only be the beginning of our work to leverage this relationship to transform South Carolina.

We have a terrific opportunity to create an innovative culture here like exists in Silicon Valley or Austin, TX. The lesson of BMW is that we need to leverage our branch manufacturing recruitment success to create the equivalent of CU-ICAR around Boeing that builds our innovation capabilities where the most value is created. In fact, I have discussed what is occurring here with innovation leaders in many global corporations and believe we are beginning to create a distinctive community of industry, academia, entrepreneurs, investors, and service providers that can become recognized as a leader in open innovation worldwide.