KPMG, an audit, tax, and advisory services firm with a large practice in Detroit, today released a report that finds U.S. automotive CEOs are increasing investment in innovation, artificial intelligence (AI), and emerging technologies compared to their global peers.
KPMG’s U.S. CEO Outlook 2017 Report comes as leadership positions in the autonomous vehicle market become more competitive. The report is comprised of surveys of 34 U.S. automotive CEOs and 62 global automotive CEOs.
“Our study found higher levels of optimism and confidence by U.S. auto CEOs moving forward in their willingness to invest in emerging technology and innovation compared to their global counterparts,” says Gary Silberg, automotive sector leader of KPMG. “CEOs recognize that this is a critical juncture, one where they will make choices on whether to remain pure automakers or to become mobility service providers, or both.”
Other key findings of the report include:
- 59 percent of the U.S. CEOs say their companies intend to invest heavily in AI in the next
- 12 months, compared to 39 percent of global CEOs.
- 74 percent of U.S. CEOs will be stepping up investment in emerging technologies in the next year compared to just 51 percent of global CEOs.
- 82 percent of U.S. CEOs say they will increase investment in innovation, compared to just 45 percent of global CEOs.
- U.S. auto CEOs are less concerned about increasing market share than their global peers, 33 percent versus 55 percent.
“Given the rapid pace of innovation and its inherent complexities, it’s really hard to be a CEO knowing that the investment decisions made today or not made will have profound implications on the future of their company,” adds Silberg. “Moreover, breakthroughs in AI, especially in deep learning, are having an unprecedented impact on the advancement of autonomous vehicles and how customers are interacting with cars.”
Although U.S. CEOs are eager to prioritize investment in cognitive and AI technology, there is still hesitation in adopting the technology. Almost 40 percent of both U.S. and global automotive CEOs agreed with the statement that their organization is not ready to adopt advanced AI technology. Additionally, 56 percent of U.S. automotive CEOs and 48 percent globally expressed concerns that their organizations do not currently have the sensory capabilities and innovative processes to respond to the rapid disruption.
“In this age of autonomy and mobility, traditional automakers find themselves competing with new entrants, from technology giants to startups,” says Tom Mayor, KPMG’s national strategy leader for industrial manufacturing. “For auto companies to thrive in this new environment, they must solve what KPMG calls the ‘clockspeed dilemma’ – the need to balance traditional five to seven-year auto product cycles with the new, consumer electronics type cycle. In order to do that, they need new processes, capabilities, and talent.”
The full KPMG U.S. CEO Outlook 2017 Report can be found here.