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For many years, business leaders across industries have sought new ways to automate processes and drive efficiency. And after a recent surge in connected devices, where buzz around the Internet of Things saw a race to automate everything from home appliances to hairbrushes, there’s one area in particular that is clearly not just a passing phase: autonomous vehicles.Ìý

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Autonomous vehicles capture the imagination, but also have real potential to change our daily lives. Data collection and sensors are already making journeys safer, and we all look forward to the day when tiring, long distance drives become a thing of the past. But they are also a prime example of how our digital and physical worlds are becoming increasingly entwined.

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Once, a car’s appeal was firmly rooted in the physical realm. Our focus was on the mechanics, parts, and engine performance. But in today’s world a car’s digital capabilities are what sets it apart from the competition. This development has seen the advent of 'Software Defined Vehicles' (SDVs) – a concept reshaping the automotive industry's future. And in its pursuit of automation, the industry is providing an ongoing case study in how to manage the physical/digital convergence.

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SDVs are a transition from traditional mechanics to software-centric platforms. With this shift, a vehicle's core functions and features, from the drivetrain to the infotainment system, are monitored and controlled by software. SDVs also lower development costs, get to market faster and enable faster testing. This digitization embodies the convergence we're witnessing, where AI-driven automation becomes inextricably merged with a physical product.ÌýÌý

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The implications for Original Equipment Manufacturers (OEMs) are profound. Their remit is widening. They can no longer solely focus on the nuts and bolts of manufacturing, they must now also dive into the complexities of software development, machine learning, and data analytics. And this is where the challenge lies. Firms that are slow to adapt risk becoming relics in a rapidly advancing field.Ìý

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Companies involved in hardware production are trying to acquire digital dexterity, while software experts are grappling with the tangible aspects of automotive production. This is where digital-native car makers such as Tesla and NIO have an advantage over their more traditional competitors. These new industry entrants have centralized digitization from the start, whereas existing manufacturers are making a major pivot.

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The good news is, that pivot is not impossible. Most businesses are moving towards a more closely aligned physical/digital future. If they accept the need for a strategic shift and embrace more holistic ways of working, they can ensure seamless interactions between the real and virtual elements of their product.Ìý

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Multidisciplinary teams and collaborative design processes will become more and more prevalent as we move forward, after all – it’s hard to be an expert in everything. Forging the right partnerships will therefore be key, enabling companies to not only survive but to thrive in an era of digital disruption.

Read ºÚÁÏÃÅ’ latest Looking Glass report for a deeper look into how businesses are closing the gap between the physical and digital.Ìý

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