Four emerging technology clusters will define how automotive manufacturers, suppliers, and digital attackers compete and cooperate for growth. In banking, enlarged platform spaces will offer customers access to a wide range of products and services through a single gateway. In both industries, established players will need to rethink strategy, either by joining existing ecosystems or forging their own.

The automotive ecosystem shifts into gear

An analysis of mobility investments reveals how technologies and players are beginning to interact, and where new opportunities are starting to appear.

As digitization reshapes traditional industry boundaries, many are betting that an “automotive ecosystem” will be one of the first to develop. But what will it look like in practice, and how will we know when such a competitive shift really takes place?


As we have recently described, the coming ecosystems will comprise diverse players who provide digitally accessed, multi-industry solutions based on emerging technologies. In automotive, four such technologies known by the acronym ACES—autonomous driving, connected to the Internet of Things, electric, and shared mobility—are likely to be key. A constellation of different players, including OEMs and their suppliers, competing “frenemies,” and unexpected attackers, will aim to capture the opportunities these and other innovations will present.

Thanks to the findings of the Start-up and Investment Landscape Analysis (SILA), McKinsey’s proprietary, self-optimizing big data engine, we can now paint a more detailed picture of the evolving battleground. Through SILA’s semantic analysis of keywords and network analytics of relevant companies, clusters, and industry moves within the investment landscape, we identified ten technology clusters with more than a thousand companies combined that have received external investments since 2010 of about $111 billion. This figure does not include internal R&D expenses by automotive and technology companies, but it does include acquisitions and stakes in other businesses made by these companies.

In the past decade, the rate of mobility investments has increased nearly sixfold, and the median deal size has more than tripled. In 2016 alone, investments amounted to $31 billion, a little less than half of the total R&D spend by all automotive OEMs ($77 billion). Around 60 percent of the total investment volume went into very large, industry-shaping deals, whereas the rest went into a huge number of smaller deals. Notably, these investments were focused not on products but on the technologies underlying the changes in mobility. In other words, investors are betting on an ecosystem.

No less compelling is the evidence as to who the investors are. More than 90 percent of the investments identified by SILA have been made by tech companies, on the one hand, and venture-capital (VC) and private-equity (PE) firms, on the other. These two sectors are investing about equal amounts (that is, slightly more than 45 percent of the total investments); OEMs and major suppliers make up the remainder. And while VC and PE firms are making these investments because they expect significant growth and will likely look to exit in the foreseeable future, tech companies seem intent on staying put—staking out emerging control points and getting ahead of critical trends.

Our SILA analysis shows ten major clusters based on the four ACES technologies (exhibit). Among these technologies, autonomous driving received the largest amount of funding. Sharing solutions came in second, with around one-third of the funding—surprisingly little, given the media attention. In both areas, the investments were dominated by a few large investments in major companies (for example, Didi, Mobileye, and Uber); autonomous driving also had a long tail of smaller investments in technology start-ups.

Sourced From Mckinsey &Company