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Business Commentary We traded carriages for cars – let’s embrace the next disruption

Stephen Carlisle is president and managing director of General Motors Canada. He chairs the advanced-technology committee of the Canadian Automotive Partnership Council.

The automotive industry finds itself on the cusp of global change, a transformation as impactful and wholesale as when the automobile supplanted the horse and buggy more than a century ago. The question is, what will it mean for Canada?

The shift from horses to cars was actually a 50-year period of change and transformation complete with large safety, environmental and economic challenges, not unlike today.

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A century ago, horse-pulled carriages or larger "omnibuses," as they were called, were the main source of city transport. The first automobiles were introduced in small numbers around the turn of the century and they cost about $850 each. A very good horse buggy cost about $50, including some made by the McLaughlin Carriage Co., which eventually became General Motors Canada.

Congestion and accidents became a significant problem on North American roads that were crowded with more than 20 million horses. In New York in 1900, about 200 people were killed by unpredictable horse-drawn vehicles – close to the 242 vehicle fatalities in the same city in 2015.

But city leaders were focused on another problem. The typical horse annually consumed about five acres of hay and grain – good for the rural economy. However, the same horse produced a very large volume of manure and flies – bad for the urban setting. One prognosticator estimated that, unabated, horse droppings would rise to the level of third-storey Manhattan windows by 1930.

Necessity being the mother of invention, automotive technology progressed rapidly, and cars overtook horses on city roads in the 1920s, sparking a national economic boom, but also new challenges for roads and infrastructure. We're looking at similar, significant challenges and opportunities today, minus the piles of droppings.

No transformation of great scale occurs without innovation, hard work and significant change – or disrupting the norm – and the change we are going through now will be no exception. At General Motors, we see the future of the automobile and vehicle ownership being far different than it is today. Vehicles will be electric, connected, self-driving and shared. Our chair and chief executive officer, Mary Barra, has made it her priority to disrupt our business model, and to own the customer relationship beyond the car.

Transformation is already upon us, and it has growing implications for consumers, the environment, road safety, infrastructure and the global economy. And it's happening fast – with expanded fleet tests of new self-driving cars that will dramatically reduce on-road accidents, the introduction of new longer-range battery electric vehicles and new approaches to getting around crowded cities using our smartphones and new solutions.

As an auto executive from Woodstock, Ont., it's my business to embrace that change and help drive it forward here in Canada. GM was recently awarded an exciting new engineering mandate to develop connected and autonomous vehicle technology at our Oshawa Engineering Centre. We are hiring software and controls engineers and focusing on how we can start to build out a new Canadian auto-technology "ecosystem" of universities, technology suppliers and other local partners to support our work on these global programs.

Once again, we've reached a pivotal time of technological transformation in the global auto industry. But what will be Canada's role? We have a strong vehicle-assembly base that we are working hard to sustain, but we must also focus on new innovation, engineering and technology work. What is the road map to most effectively navigate this automotive transformation in Ontario and across Canada?

My past year in the job has convinced me that our country is well positioned, with its rich history in telecommunications and secure mobile computing, coupled with its strong technology skill set, great universities and innovative startups. But we must take purposeful steps to grow and commercialize Canada-based intellectual property, and nurture new engineering and technology companies. We need innovation-friendly approaches such as Ontario's enabling legislation for autonomous vehicle testing. And we should foster our rich talent base and scale up Canada's own auto engineering and technology ecosystem to tap into new and expanding global auto supply chains. That will create exciting new jobs and it can help us to draw some of the 350,000 Canadians working in Silicon Valley back to Canada.

Canada's recent federal budget noted: "As the global automotive industry is evolving toward the production of cleaner, more connected vehicles, Canada has an opportunity to apply its strengths in areas such as lightweighting and information and communications technologies to designing and building the cars of the future."

We need to seize that opportunity and transform Canada's auto sector beyond the approaches of the past 100 years. Now is the time to seize the reins. The benefits for Canada can be enormous.

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