Creative Destruction

If you have spent your evenings cooped inside a business school classroom rather than getting some fresh air, you must have read about Joseph Schumpeter’s theory of creative destruction.



M.I.T. has come up with a list of the fifty most destructive companies. Predictably, most of them hail from Silicon Valley but there is a pair from Gasoline Alley. Nope, it’s not Tesla or Bayerische Motoren Werke aka. BMW. It is staid old Toyota and ‘Vorsprung Durch Technik’ if you what I mean. Yep, that means Audi.

1. Audi gets the award for 2 initiatives.
    As you know, electricity generated for the power grid cannot be stored. If it is not used, it is wasted. The wind or the tides do not care. Excess power can be generated and wasted if the wind is blowing during off-peak times. Audi plans to use SolarFuel’s technology and use this wasted energy to create methane from water and carbon dioxide and then use this methane to power some of their CNG powered cars. All right, you are still burning fossil fuel but at least you are using wasted energy and CO2 to create your energy supply. Wow!  

    You also must have heard that everyone is trying to perfect the self-driving autonomous car – including ubiquitous Google. If you have seen the cars in the DARPA Grand Challenge, they are chock-a-block full of sensors and computers. 

MIT’s DARPA competitor

Audi has managed to cram all this laser scanning technology into a package small enough to fit inside the grille of a car. This is a big step towards embedding the technology into the car and ‘democratizing’ it. Ultimately, you could see it being used in congested cities where real-time traffic info can be optimized to reduce travel time and avoid congestion. Google, time to step up to the challenge!

2. Toyota get the award for 3 initiatives. 
Firstly, for autonomous cars though it doesn’t seem to be as ambitious as Audi’s proposal. 
Secondly, it has poured resources into research for Magnesium ion batteries. These offer the tantalizing benefit of higher energy density and a cheaper price. For those reading between the lines, it also means freedom from China’s noose on the supply of rare-earth metals … like Lithium.
It also gets points for its comprehensive hybrid strategy. Other automakers have been trying a lot of ideas to see what sticks. Toyota is out in front because its lead in understanding and selling hybrid cars. Even, Bob Lutz had to admit that he was out-foxed by Toyota’s strategy for the Prius. And Toyota is sticking to hybrid vehicles instead of pure EV’s.It rightly thinks that it will be some time before pure EVs become mainstream. So it can continue penetration into the ‘green space’ while others are flailing around.

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