Frontier Technologies in Non-Core Automotive Regions: Autonomous Vehicle R&D in Canada

Abstract

For economically advanced locations, a primary response to deindustrialization has been to emphasize higher value-added activities, the target frequently being research and development (R&D). R&D tends to occur in locations proximate to corporate headquarters in general and the headquarters of global lead firms in particular. This pattern is especially evident in the automotive industry. Thus, for countries or regions lacking a targeted industry’s global lead firm, generating R&D is problematic. In the automotive industry, the introduction of frontier technologies—such as those supporting autonomous vehicles (AVs)—may reveal new patterns of R&D development, a consequence of firms engaging with innovation ecosystems disconnected from the traditional automotive industry and its headquarters-proximate geographic core or cores. This article explores these matters via a case study of Canada’s efforts to build an AV R&D profile. Canada does not host an automaker’s headquarters, but it does possess attributes that suggest it is well equipped to conduct such work. After constructing and analyzing a global database of patents related to AVs, this article demonstrates that Canada has contributed R&D focused on AVs at a rate above that which it has reached for automotive R&D overall. It also establishes that globally, even though AV-related R&D has emerged from non-traditional automotive locations, the preponderance of AV-related R&D is converging in core automotive locations: proximate to automakers’ global headquarters.

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“…This leads such activities to cluster in just a few key locations around the globe. Michigan fulfils this role for North America (Hannigan et al, 2015;Klier et al, 2014;O'Huallachain et al, 2018;Mordue and Karmally, 2020). In 2019, 21 OEMs had headquarters or technology centres in Michigan and 96 of the top 100 automotive suppliers to North America had a presence in Michigan, with 60 being headquartered there (Detroit Regional Chamber, 2020).…”

“…They point to Ontario's strength in both digital ICT technologies and cutting-edge artificial intelligence research and recent Ontario investments in ACES software development by both traditional OEMs and global digital platform companies such as Google and Uber. However, based on their analysis of patent data, Mordue and Karmally (2020) conclude that the preponderance of AV-related R&D is converging in core automotive locations such as Michigan with only 'mediocre' outcomes in Ontario. We shall return to this issue in the concluding section.…”

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“…Upgrading processes are driven by the diversification activities of a dynamic domestic ICT sector and AI and other capabilities residing within the support system that has been expanded over the past few years. Despite Canada's low share of traditional automotive R&D, Ontario has produced an increasing volume of C/AV patent applications (Mordue and Karmally, 2020).…”