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1、International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study Final Report June 2021International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 2 Contents CONTENTS 2 LIST OF TABLES 4 LIST OF FIGURES 5 LIST OF SECTION SUMMAR

2、IES 6 1 INTRODUCTION 12 1.1 PURPOSE AND OBJECTIVES OF THE STUDY 12 1.2 APPROACH 13 1.3 KEY TERMINOLOGY 15 1.4 KEY CAVEATS 16 1.5 REPORT STRUCTURE 17 2 BASELINING:THE UK CAM SECTORS SELF-PERSPECTIVE 18 2.1 OVERVIEW 18 2.2 SNAPSHOT OF UK STAKEHOLDER INTERVIEW RESULTS 19 2.3 THE UK AS AN INVESTMENT DES

3、TINATION 20 2.4 EXPECTED INVESTMENT 21 2.5 THE UK AS A SOURCING DESTINATION 22 2.6 POLICY,REGULATION AND FISCAL INCENTIVES 24 2.7 ENGAGEMENT EFFICACY 26 2.8 IMPROVING THE ATTRACTIVENESS OF THE UK CAM SECTOR 26 2.9 SWOT 28 2.10 UK CAM MARKETING MATERIALS INTERNATIONAL COMPARISON 31 3 THE UK AS AN INV

4、ESTMENT DESTINATION 33 3.1 INTRODUCTION 33 3.2 SNAPSHOT OF SURVEY RESULTS 34 3.3 COUNTRY SNAPSHOT 35 3.4 CURRENT INTEREST IN THE UK AS AN INVESTMENT DESTINATION 36 International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 3 3.5 38 3.6 INVESTMENT DRI

5、VERS AND BARRIERS 39 3.7 FUTURE INTEREST IN THE UK CAM SECTOR 42 3.8 INTERNATIONAL MARKET PERCEPTIONS VS.UK STAKEHOLDERS SELF-PERCEPTION OF THE UK AS AN INVESTMENT DESTINATION 45 4 THE UK AS A SOURCE OF CAM PRODUCTS 49 4.1 INTRODUCTION 49 4.2 SNAPSHOT OF SURVEY RESULTS 50 4.3 COUNTRY SNAPSHOT 51 4.4

6、 CURRENT INTEREST IN THE UK AS A SOURCE FOR CAM PRODUCTS 52 4.5 PRODUCTS OF INTEREST 52 4.6 SOURCING DRIVERS AND BARRIERS 53 4.7 FUTURE INTEREST IN THE UK AS A SOURCE OF CAM GOODS AND SERVICES 56 4.8 INTERNATIONAL MARKET PERCEPTIONS VS.UK STAKEHOLDERS SELF-PERCEPTION OF THE UK AS A SOURCE OF CAM GOO

7、DS AND SERVICES 58 BARRIERS TO SOURCING FROM THE UK 60 5 PERCEPTIONS OF THE UKS COMPARATIVE POSITION 61 5.1 INTRODUCTION 61 5.2 62 REDACTED TEXT 62 5.3 COUNTRY-BY-COUNTRY SNAPSHOT 64 5.4 THE UK IN COMPARATIVE PERSPECTIVE 65 5.5 INTERNATIONAL MARKET PERCEPTIONS VS.UK STAKEHOLDERS SELF-PERCEPTION OF T

8、HE UKS COMPARATIVE POSITION ON THE GLOBAL STAGE 70 6 ENGAGEMENT EFFICACY OF THE UK CAM SECTOR 71 6.1 INTRODUCTION 71 6.2 SNAPSHOT OF SURVEY DATA 72 6.3 COUNTRY SNAPSHOT 73 6.4 LEVEL OF FAMILIARITY AND ENGAGEMENT WITH THE UK CAM MARKET 74 6.5 INFORMATION PREFERENCES AND CHOICES 81 International Perce

9、ptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 4 6.6 INTERNATIONAL PERCEPTIONS VS.UK STAKEHOLDERS SELF-PERCEPTION OF THE ENGAGEMENT EFFICACY OF THE UK CAM SECTOR 84 6.7 CONSIDERATIONS FOR DECISION MAKERS ON ENGAGEMENT EFFICACY 86 6.8 ENGAGEMENT EFFICACY FRA

10、MEWORK 88 7 CONCLUSION:SUMMARY OF CONSIDERATIONS 95 7.1 OVERVIEW 95 7.2 THE UK AS AN INVESTMENT DESTINATION 95 7.3 THE UK AS A SOURCING DESTINATION 98 7.4 REDACTED TEXT 100 7.5 ENGAGEMENT 104 APPENDIX A:UK STAKEHOLDER ENGAGEMENT 108 APPENDIX B:INTERNATIONAL SURVEY 111 APPENDIX C:INTERNATIONAL INTERV

11、IEWS 126 List of tables Table 1-Approach to study 13 Table 2-Stakeholder perspective of UK CAM sectors likely to receive investment 20 Table 3-Stakeholder perspective of the UKs sourcing strengths by technology 23 Table 4-SWOT:UK Perspectives 29 Table 5-Baselining:The UK CAM Sectors Marketing Materi

12、al vis-vis other Countries 32 Table 6-Comparison of perceptions 45 Table 7-Sourcing:differences in perceptions 58 Table 8 Redacted text 62 Table 9 Redacted text 62 Table 10 Redacted text 63 Table 11-UK CAM:Strengths,weaknesses,opportunities and threats 65 Table 12 Redacted text 68 Table 13-Internati

13、onal perceptions vs UK stakeholders 70 Table 14-Awareness of UK engagement 74 International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 5 Table 15-Awareness of CCAV 75 Table 16-Awareness of Zenzic and CAM Testbed UK 76 Table 17-Awareness of gov.uk w

14、ebsite 79 Table 18-Awareness of UK presence at trade shows 79 Table 19-Awareness of UK policy and regulation 80 Table 20-Desired information channels 82 Table 21-Type of information wanted by market 83 Table 22-International vs UK stakeholder perceptions 84 Table 23-Engagement considerations for dec

15、ision-makers 86 Table 24-Engagement methodologies 89 Table 25-Engagement methods assessment 92 Table 26-Investment focus areas 96 Table 27-Leveraging existing drivers and overcoming barriers:investment 97 Table 28-Potential focus areas 99 Table 29-Leveraging existing drivers and overcoming barriers:

16、sourcing 100 Table 30-Redacted 101 Table 31-Marketing and international engagement considerations 105 Table 32-Next steps for engagement methods 106 List of figures Figure 1-UK stakeholder interview results 19 Figure 2-Survey snapshot:Investment into the UK 34 Figure 3-Country snapshot:Investment in

17、to the UK 35 Figure 4-Survey snapshot:UK as a sourcing destination 50 Figure 5-Country snapshot:UK as a sourcing destination 51 Figure 6-Investment and sourcing by country 64 Figure 7-Survey snapshot:Engagement efficacy 72 Figure 8-Country snapshot:Engagement efficacy 73 Figure 9-Comparison CCAV awa

18、reness and investment interest 76 Figure 10-Comparison:Awareness of Zenzic and sourcing figures 77 Figure 11-Comparison of analytical methods 91 International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 6 Figure 12-redacted 102 List of section summa

19、ries Objectives of the study 12 UK stakeholder interview results 29 SWOT:UK perspectives 29 Baselining:The UK CAM sectors marketing material vis-vis other countries 32 Survey snapshot:Investment into the UK 34 Country snapshot:Investment into the UK 34 Redacted Redacted Role for marketing and intern

20、ational engagement 41 Attracting those who do not invest internationally 42 Future areas of interest for investment 43 Making the UK a more attractive investment destination 44 Survey snapshot:UK as a sourcing destination 50 Country snapshot:UK as a sourcing destination 51 Products of interest for s

21、ourcing 53 Retaining existing procurers 54 Barriers to sourcing 55 Future interest in the UK as a source of CAM goods and services 56 International vs UK self-perception as a procurement destination 58 Investment and sourcing by country 64 UK CAM in comparative perspective 65 Redacted Survey snapsho

22、t:Engagement efficacy 72 Country snapshot:Engagement efficacy 73 Considerations for decision makers 86 International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 7 Executive Summary The Centre for Connected and Autonomous Vehicles(CCAV)has commission

23、ed this study to gather international perceptions of the UKs Connected and Automated Mobility(CAM)sector The contents of this report were correct at the time of writing.This study has collected and analysed perceptions from over 240 automotive sector stakeholders in Germany,the US,South Korea,Japan,

24、and Israel to help to inform UK policy,investment,trade,and international engagement strategy in respect of our Connected and Automated Mobility capabilities and industrial strategy.The study was delivered by:Developing a baseline view of the UK CAM sectors marketed capabilities through desktop rese

25、arch and interviews of stakeholders from UK Government,public bodies,and industry associations.Gathering international perceptions of the UK CAM sector through an anonymous survey of 200+senior decision-makers from four target markets(Germany,Japan,South Korea,and the United States).Enriching the ab

26、ove analysis through in-depth qualitative interviews of 45 senior decision-makers from the above markets as well as Israel,and one from France.Responses to the study demonstrate that there continues to be international interest and involvement in the UK as both an investment destination for sourcing

27、 of CAM products and services Investment destination:Over two-thirds of survey respondents whose companies are investing internationally have some form of investment in the UK(higher for South Korea and Japan,and slightly lower for the US and Germany).60%of those not investing in the UK would consid

28、er it in the next 10 years.Source of CAM products:69%of survey respondents who are procuring internationally are sourcing from the UK CAM market,with 67%of those not procuring internationally saying they would consider it within 10 years.There are areas of both alignment and divergence between the U

29、Ks CAM industrys priorities and demands from the international market Strengths:The UKs R&D capabilities and skills ecosystem were emphasised as key strengths by both the international market and UK CAM sector,with niche offerings such as Sensors,Autonomous Control Systems,Artificial Intelligence/Ma

30、chine Learning(AI/ML),CAM pods,and Computer chip architecture being highlighted.Use cases of CAM in passenger vehicles and public transport were also emphasised as specific strengths by the international market.Weaknesses:Cybersecurity and modelling/simulation services which were viewed as strengths

31、 by the UK market did not emerge strongly in international preferences.In respect of use cases,while UK stakeholders highlighted freight and logistics as important areas,international participants did not see long-haul logistics as a strength though many rated first and last mile delivery quite high

32、ly.International and UK stakeholders both considered the UKs relative lack of manufacturing capabilities to be a barrier to scale.International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 8 Drivers:International investors said that their investment

33、into the UK is driven by a perception of the countrys high innovation potential,an expectation of high growth in UK CAM,and an expectation of a high degree of end user or customer acceptance of CAM among the UK population.Meanwhile,international procurers emphasised availability,quality,and the clar

34、ity and flexibility of the policy environment.Some of these drivers resonated with UK stakeholders who felt that the UKs R&D,software,and university capabilities have helped create high-quality niche offerings(like the ones noted above),and that the UK has emerged as an early policy leader.Barriers:

35、International investors and procurers who are not currently investing in or procuring from the UK said that they were held back by a lack of information and insight into UK CAM,a lack of cost-effective or strong pre-existing relationships,a perception that growth will be impeded by high costs(for ex

36、ample,of labour),or a lack of availability of specific products.This view was broadly in alignment with UK stakeholders,who felt that international engagement and marketing of CAM has been insufficient,partly due to a lack of funding in recent years.UK and international stakeholders also agreed that

37、 a strong focus on the electrification agenda was preventing CAM investment.Interestingly,while UK stakeholders were concerned about the UKs exit from the European Union being an impediment to investment and sourcing,international survey respondents did not rate this as a significant barrier.The val

38、ue of government funding in CAM innovation:UK stakeholders emphasised past funding as a key driver of previous investment,and the decline in funding in recent years as a barrier to future investment.However,there were mixed messages from the international market on this subject.On the one hand,it em

39、erged as one of the top three drivers of future investment among survey respondents,and some interviewees highlighted that they would be encouraged to invest more in the UK if it offered more incentives like China and other markets.On the other hand,those who have already invested in the UK did not

40、rate the availability of government funding as a key driver for them.This could potentially be because those who have already invested undervalue the importance of funding post facto.The value of the UKs testing infrastructure:UK stakeholders felt that the UKs testbeds are an important driver of inv

41、estment into the UK,and a key offering for the international market.However,again,there were mixed views from the market.On the one hand,a significant proportion of survey respondents,particularly for the US and Japan(40%and 38%respectively)are sourcing testbed services from the UK.On the other hand

42、,survey respondents did not rate testbeds as a strong USP for the future from a sourcing perspective,and did not view it as a strong current or future opportunity for investment in the UK.It would,however,be premature to conclude that the testbeds are not a valuable proposition because,as described

43、later,the relatively low ratings could potentially be due to a lack of awareness since the international market was less aware of Zenzic and Testbed UK than other sources of CAM information.After being informed of Testbed UK,some interviewees said that this would be a valuable proposition for them.A

44、s a driver of investment,a third of respondents(compared to half for other physical and communications infrastructure),consider testbeds important,although the US market,as an outlier,rates testbeds more highly.This could be because European road infrastructure is markedly different from the US road

45、 infrastructure,and the UK testbeds offer a unique testing environment for the local market.International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 9 International participants shared views on their current and desired engagement with the UK CAM s

46、ector Three-quarters of survey respondents said they would like to receive more information on the UK CAM sector and 68%want this to be through official reports or trade shows.Both survey and interview respondents had varying knowledge about the different sources of UK CAM information that they were

47、 asked about,although most respondents said they were most familiar and knowledgeable with CCAV and UK trade shows,and less so about Zenzic,gov.uk and UK policy initiatives.29%of survey participants said they found the quality of information they have consumed about UK CAM to be very informative and

48、 insightful,indicating that there is an opportunity for improvement in messaging.The information they would most like to see are details of CAM-related infrastructure,information on the skills base,and comparisons with other countries CAM sectors.Overall,the UK stakeholders perceptions of engagement

49、 efficacy are aligned with those of international stakeholders,with both emphasising the need for more engagement and marketing to promote UK CAM(for example,Zenzic and Testbed UK)and for a coherent,joined-up CAM strategy.Based on the findings of the report,the following points stood out for the UK

50、CAM sector as considerations for action Key pillars of CAM investment and sourcing(Note:Country-specific insights are included in the body of the report)Technology and Innovation Continue to invest in and promote CAM products that are viewed as the UKs current and future strengths(including R&D capa

51、bilities,Sensors,etc.)especially since these are also popular products internationally.Deploy CAM capabilities in specific use cases like passenger vehicles and public transport Conduct a mapping exercise to compare UK skills against competitor markets Examine the divergence between UK and internati

52、onal perceptions Establish strategic partnerships with high-value targets in other markets Include other markets(e.g.China and Israel)in the analysis Consider how best to attract high-value talent from other markets Policy and regulation Continue to monitor regulatory developments(e.g.in Singapore)a

53、nd be ready to adapt to keep the UK at the forefront of regulatory innovation Market the UKs favourable policy environment more strongly Identify potential financing partnerships between the public and private sector Improve the tools and guidance available to roads authorities to support trialling

54、and deployment Consider providing tax and other fiscal incentives to international investors Infra-structure Develop a clear value proposition for Testbed UK and market it more strongly in international engagement Critically assess whether future Government investment in Testbed UK will improve inve

55、stment into,and sourcing from the UK International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 10 Develop a targeted investment and trade strategy to identify areas of future strategic value for CAM infrastructure investment(i.e.“build versus buy”)C

56、onsider establishing a CAM specialist zone targeting international developers and investors(e.g.in and around Freeports,giving consideration to fiscal incentives per above)Customer acceptance Ensure that regulation remains safety-focused to maintain positive consumer acceptance Ensure that successfu

57、l projects and initiatives are promoted to the public Highlight end user acceptance as a key differentiating feature of the UK CAM market where applicable Evaluate how best to link CAM with other significant initiatives,especially Net Zero 2050 and the decision to end the sale of new petrol and dies

58、el cars and vans by 2030 Key considerations for future international engagement (Note:a country-by-country breakdown is included in the body of the report)Channels Expand the UK CAM sectors level of engagement with all markets,particularly through Government channels and trade shows Ensure that indu

59、stry and consulting reports have correct and up-to-date data Ensure that developments in UK CAM are circulated to reputable news sources Engage with UK-based sales teams of large international organisations to feed relevant information to company headquarters Focus areas Emphasise R&D and Engineerin

60、g capabilities,AI/ML software,Autonomous Control Systems,and Sensors Improve the value proposition and marketing of Zenzic and Testbed UK Messages Develop and release a clear UK CAM strategy setting out future plans and milestones for regulation,technology and innovation,acceptance and use cases Ens

61、ure that marketing materials are aligned,coherent,and consistent across UK stakeholders Develop clear messaging around the impact of UKs departure from the EU,cost of doing business with and in the UK,and investment support initiatives For investors,provide information on innovation strengths and po

62、tential,availability of infrastructure,details on projected growth,details on end user acceptance of CAM within the UK,linkages with the offering on Zero Emission Vehicles,a how-to guide on establishing new relationships in the UK;and,details of government funding available to attract innovation.For

63、 procurers,provide information on the suite of available CAM offerings in the UK,information about quality,reassurance about costs,clarity regarding policy;and,a how-to guide for establishing new supplier relationships.International Perceptions of the UKs Connected and Automated Mobility Sector:Mark

64、et Study OFFICIAL-SENSITIVE 11 Key messaging and framing for each market (Note:a more detailed country-by-country breakdown is included in the body of the report)Germany Include messaging on the strength of the skills base,details on infrastructure,and information on Government funding.For investors

65、 specifically,also include information on innovation potential and testbeds.For procurers specifically,also include information on the suite of UK CAM offerings and policy.Japan Include messaging on infrastructure availability,strength of the skills base,and industry size and growth across the board

66、.(The last is particularly important as potential Japanese investors hold back because they do not see the potential for returns).For investors specifically,include information on innovation potential and clarity of the policy regime.For procurers specifically,include information on the suite of UK

67、CAM offerings and quality.South Korea Include messaging on infrastructure availability,strength of the skills base,and comparisons with other markets(e.g.notable strengths of the UK CAM sector compared to other markets).For investors specifically,also include information on innovation potential.For

68、procurers specifically,also include information on the suite of UK CAM offerings,cost of doing business,and quality.USA Highlight the benefit of investing in the UK as a way of circumventing US regulation and consequently enabling organisations to attempt to accelerate development of their products

69、and services(as Kittyhawk have achieved by investing in the NZ market).Include messaging on industry size and growth,infrastructure availability,and comparisons with other markets.For investors specifically,also include information on innovation potential.For procurers specifically,also include info

70、rmation on the policy environment and quality of offerings.The perceptions of the international market as covered in this study will be a critical input to the UKs wider industrial strategy for the CAM sector since they indicate what products and offerings the market values,what factors drive invest

71、ment and sourcing,and what they perceive as the UKs strengths,weaknesses and opportunities.However,to definitively answer questions around where the UK should invest,and what its competitive or comparative advantages are in reality,these findings will have to be juxtaposed against market research an

72、d analysis such as comparative trade and FDI flows.International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 12 1 Introduction 1.1 Purpose and objectives of the Study The global market for connected and automated vehicle(CAV)technology is forecast t

73、o be 650 billion by 2035;with the UK market expected to capture approximately 6%of this,at 41.7 billion1.Should this opportunity be realised,there is a potential for over 20,000 new jobs in the UK automotive sector by 2030,with 55%of these being high skilled2.As the Connected and Automated Mobility(

74、CAM)market develops,a global race to develop CAM technologies and capabilities has begun,with government and industry looking to capitalise on growing investment and procurement opportunities.In the UK,this has included joint investment by government and industry of over 400 million into more than 9

75、0 CAM projects,involving over 200 organisations,thus helping to stimulate the UK CAM sector3.The Centre for Connected and Autonomous Vehicles(CCAV),a joint policy unit of the Department for Business,Energy&Industrial Strategy(BEIS)and Department for Transport(DfT)is responsible for working with indu

76、stry and academia to support the safe emergence of connected and automated vehicles in the UK and by leading the Governments Future of Transport strategy.CCAV is developing regulation,investing in innovation and skills,and engaging the public to realise the benefits of new transport technologies,and

77、 create a thriving connected and self-driving vehicle sector in the UK.It uses its unique position to bring together world-class expertise from across the public,private and academic sectors to create an environment in the UK for new technologies and business models where innovation,safety and regul

78、ation are delivered in unison.The purpose of this study is to understand the extent to which the UKs CAM strategy has resulted in CAM capabilities that are attractive and relevant to the international market especially markets with mature and extensive automotive sectors.Furthermore,the study seeks

79、to understand how future spending,investment or fiscal incentives by both Government and industry can be best targeted,and to identify potential mechanisms to assess the efficacy of the UKs engagement with the international market.Specific territories of interest in the study are Germany,Japan,South

80、 Korea,and the United States(US),given that they are the key international markets for the UK CAM sector.Israel is also considered given its vibrant CAM start-up community and niche specialisms in CAM technology.The objectives of the study are to:1.Understand perceptions of UKs strengths,weaknesses,

81、opportunities,and threats(SWOT)in the CAM sector.2.Understand intentions for organisations to invest into the UK CAM sector,or procure goods and services from the UK CAM sector.3.Understand the drivers and barriers of investment and/or sourcing decisions facing such organisations.4.Understand how in

82、dividuals and organisations form their opinion of the UK CAM sector.1 Connected Places Catapult,(2020),Market Forecast for Connected and Autonomous Vehicles.Available at:https:/assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/919260/connected-places-catapult-ma

83、rket-forecast-for-connected-and-autonomous-vehicles.pdf 2 SMMT(2019)Connected And Autonomous Vehicles 2019 Report/Winning The Global Race To Market.Able to requested from:https:/www.smmt.co.uk/reports/Accessed 26 May 202 3 HM Government(2020)Innovation Is Great Connected And Automated Vehicles.Avail

84、able at:https:/assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/929352/innovation-is-great-connected-and-automated-vehicles-booklet.pdf Accessed 26 May 2021 International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSI

85、TIVE 13 5.Understand how individuals and organisations source their information and assess opportunities in relation to CAM investment and sourcing.6.Understand how organisations would like to be engaged by the UK CAM sector going forward.7.Develop an efficacy framework for CCAV to use to assess the

86、 efficacy of the UKs engagement with the international market going forward.The outputs of this will study will be used by CCAV and its partners to inform development of world-leading CAM policy to encourage international sourcing from,and investment into,the UK CAM sector.All market engagement acti

87、vities undertaken were agreed to on the premise of anonymity.Accordingly,market engagement respondents are not identified in this report,neither as named individuals nor organisations.1.2 Approach To deliver the objectives of the study,a mixed qualitative and quantitative research approach was adopt

88、ed,combining quantitative data sourced through a survey of,and qualitative insights sourced through targeted interviews with relevant stakeholders in the automotive market.An overview of the study approach is outlined below,with more detail on the methodology and specific questions provided in the a

89、ppendices.Table 1-Approach to study Activity Approach Baselining A baseline review of the UK CAM sector was undertaken,identifying key features and trends,to inform the research and provide context for the study.A high-level assessment of UK CAM capability marketing material was undertaken,to inform

90、 the research and to provide an evaluation of the comprehensiveness,quality,differentiation,and availability of UK CAM marketing material.Interviews were conducted with UK stakeholders with knowledge of the UK CAM sector,including Government departments,non-departmental public bodies,and industry gr

91、oups sector.The interviews were designed to collate extant knowledge regarding the UKs sector offerings to the international market.The findings from the interviews informed an in-going hypothesis regarding the Strengths and Weaknesses of,Opportunities for,and Threats to the UK CAM sector,to be comp

92、ared against views provided by the international market.Quantitative market engagement A detailed questionnaire was developed to source and collate views from the market about perceptions of the UK CAM sector,intentions related to sourcing and investment,and views on strengths and weaknesses of inte

93、rnational engagement by UK Government and industry players The survey was completed online by 200+senior decision makers from the automotive industry in the four territories in scope for this study:Germany(51),Japan(50),South Korea(52),and the United States(50).These markets were selected by CCAV be

94、cause of their strong automotive markets.International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 14 Activity Approach The participants represented a range of companies the largest proportion being from automotive Original Equipment Manufacturers(O

95、EMs)and automotive parts suppliers,followed by software technology providers,hardware technology providers,service providers,and infrastructure providers.The companies represented by the participants were of varying sizes about 45%in smaller companies with less than 1,000 people,27%in the range of 1

96、,000-20,000 employees,and 28 percent in the range of over 20,000 employees.The participants were all senior decision-makers CXOs,Senior Vice Presidents,Vice Presidents,Senior Directors,Directors,and Heads of Departments,primarily representing Research&Development,Manufacturing,Strategy or Operations

97、.64%claimed to have an in-depth understanding of their companys CAM offering and strategy,while 36%claimed to have some understanding of this.Qualitative market engagement To augment the quantitative market engagement,semi-structured interviews were conducted with senior decision-makers from the aut

98、omotive industry.Interviews focused on obtaining a richer set of insights on the aforementioned topics.Interviews were conducted with decision-makers from the four territories in scope for this study:Germany,Japan,South Korea,and the United States.Additionally,and to provide further insight and valu

99、e for this study,interviews were conducted with respondents from Israel and France.Israel,in particular,was added as a market because of its strong start-up sector.In total the following interviews were conducted:o 10 interviews with Japanese stakeholders o 10 interviews with US stakeholders o 10 in

100、terviews with German stakeholders o 4 interviews with South Korean stakeholders o 10 interviews with Israeli stakeholders o 1 interview with a French stakeholder The participants represented a range of companies covering Original Equipment Manufacturers(OEMs)and automotive parts suppliers,software t

101、echnology providers,hardware technology providers,service providers,automotive industry consultants,and infrastructure providers.Analysis Findings from the baselining research of the UK CAM market were used to establish the baseline view of the perceptions of the UK CAM market(as presented in Sectio

102、n 2).Findings from the quantitative survey and qualitative market engagement were brought together to establish an aggregated view of the perceptions of the UK CAM sector as an investment and sourcing destination by senior decision-makers from the territories in scope for this study(as presented in

103、Section 3 and Section 4.International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 15 Activity Approach A SWOT analysis was conducted based on the findings against the four thematic areas identified in the Autonomous Vehicles Readiness Index4 which i

104、s a comprehensive analytical tool accepted by industry Technology and Innovation,Policy,Infrastructure,and Consumer Acceptance(as presented in Section 5).Findings on the UK CAM sectors engagement with the international market were aggregated from the survey and interviews alongside an engagement eff

105、icacy framework to inform future engagement(as presented in Section 6).Views obtained from the market were compared and contrasted against those from UK stakeholders throughout the report,to identify areas of consistency and divergence(as presented in Sections 3,4,5,and 6).Key considerations for the

106、 future based on the analysis of the findings were set out throughout the report(Sections 3,4,5,and 6)and brought together in the Conclusion in Section 7.1.3 Key terminology Key terminology used throughout this report are defined below:Connected and Automated Mobility(CAM):The Connected and Automate

107、d Mobility sector is defined as the total ecosystem surrounding CAM including vehicles,individual parts,software,services,and infrastructure which enables vehicles to(1)connect with each other and the infrastructure and(2)drive with minimal or no need for human intervention.Sourcing:Procurement of g

108、oods,systems,and services from the UK.Investment:Investment refers to direct investment including opening of a subsidiary or associate company in the UK;acquiring a controlling interest in an existing UK company;entering into a merger or joint venture with a UK company;and indirect portfolio investm

109、ent.Survey respondents/survey participants:Refers to those who participated in the quantitative market engagement of 203 individuals from Germany,Japan,South Korea,and the United States as described.Interviewees/interview respondents/interview participants:Refers to those who participated in the qua

110、litative interviews.Location or country:When referring to respondents from specific countries,the country name has been used interchangeably in noun or adjective form(e.g.Germany respondents or German CEO).This alludes to the country that the respondent is primarily based in for work,and not the nat

111、ionality of any respondent.Full software stack:A full software stack references the ability for a company to provide all of the core components to deliver an automated vehicle,including on-board and off-board software,and hardware,in an integrated product.This contrasts with a company that may make

112、one,or a number of discrete components that fit into the whole product.4 KPMG(2020)2020 Autonomous Vehicles Readiness Index International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 16 Research and Development(R&D):Work conducted by organisations an

113、d individuals directed towards the innovation,introduction,and improvement of products and processes.Original Equipment Manufacturers(OEM):In the automotive industry,this typically refers to vehicle manufacturers.Automated Lane Keeping System:a system allowing a driver to delegate the driving task t

114、o their vehicle for an extended period of time,provided that the driver is prepared to resume control when prompted.Infrastructure:This refers to assets such as testbeds which allow vehicles to be trialled in controlled environments,but it can also refer to the underpinning digital systems on public

115、 roads such as 5G communications networks,as well as physical assets such as road signs and lines.However,for the purpose of the survey,infrastructure and testbeds were separated as options for respondents to select as drivers/future drivers of investment and sourcing destinations.Infrastructure was

116、 defined as physical infrastructure like roads and communications infrastructure like 5G.End user/customer/consumer:These terms are used interchangeably to describe those who would use Connected and Automated Vehicles.End user acceptance is therefore used interchangeably with public acceptance.Innov

117、ation potential:Throughout the report the UKs innovation potential is cited as a key driver for investment and/or sourcing.This refers to the UKs future attractiveness as a developer and innovator of CAM offerings,and could be due to factors like its R&D ecosystem,skills base,or companies.Growth pot

118、ential:Throughout the report,the growth potential of the UKs CAM sector is cited as a key driver for investment and/or sourcing.This refers to an expectation of the UKs CAM sector to grow in value and size.1.4 Key caveats While this study has provided valuable insights into how a subset of the inter

119、national market may view the UK CAM sector,it is important to consider the following when using the findings to inform policy and market strategy:Perceptions-based bias:The findings in this report are based on what certain international decision-makers perceive about the UK CAM sector.However,their

120、perceptions might be different from reality for example,someone who thinks they know a particular market might be basing their assumptions on incomplete information.Perceptions may also vary widely by culture and individual for example,the definition of knowing something well may mean different thin

121、gs to different people.This can make it challenging to draw broad conclusions.Internal validity and sample size:This study has been relatively robust in that it uses both qualitative and quantitative research methods,and for the latter has a relatively large sample size.However,for some questions,th

122、e sample size of relevant respondents is relatively low(e.g.the number of individuals from a specific country who do not source CAM products internationally)and therefore it is difficult to draw broader insights.Where applicable,these caveats have been mentioned in the analysis.External validity and

123、 applicability to other contexts:This study has focused on certain target markets,and as such the insights may not be as relevant for other markets or the world at large,although the cross-section of countries is fairly wide.International Perceptions of the UKs Connected and Automated Mobility Secto

124、r:Market Study OFFICIAL-SENSITIVE 17 Divergence between survey and interview findings:On some occasions,there is a divergence between interview and survey findings.This is likely to be due to the anonymous nature of the survey vis-vis the interviews.Where the divergence is significant(i.e.a large pr

125、oportion of interviewees had a different view from a large proportion of survey respondents)or interesting(i.e.when one or more interviewees had a divergent view worth noting despite this not being the overwhelming view),these have been clearly stated in the report.1.5 Report structure This report s

126、ets out the results,analysis,key findings,and future considerations emerging from the study.It is structured as follows:Section 1 Introduction Section 2 Baselining:The UK CAM Sectors Self-Perspective Section 3 The UK as an Investment Destination Section 4 The UK as a Source of CAM Products Section 5

127、 Perceptions of the UKs Comparative Position Section 6 Engagement Efficacy of the UK CAM Sector Section 7 Conclusion:Summary of Considerations Appendix A UK Stakeholder Engagement Appendix B International Survey Appendix C International Interviews International Perceptions of the UKs Connected and A

128、utomated Mobility Sector:Market Study OFFICIAL-SENSITIVE 18 2 Baselining:The UK CAM Sectors Self-Perspective 2.1 Overview To define in-going hypothesis for the studys research,a baseline view of the UK CAM sector was developed by conducting interviews with key UK CAM stakeholders.This section of the

129、 reports presents the results of the UK stakeholder engagement,which is also supplemented by data gathered through a review of key UK CAM publications in the public domain.The objectives of the UK stakeholder engagement activity were to:Understand internal perceptions of the UK CAM market,which woul

130、d serve as hypotheses to be validated through the international market research.Collect any existing data or insights that could be of value to the study.The engagement was designed to help gather perceptions of the UK as an investment destination;the UK as a sourcing destination;and the efficacy of

131、 the UK CAM sectors engagement with the international CAM business community.Appendix A provides further detail on the stakeholders engaged and the research approach adopted.The following sections detail the findings of the UK stakeholder engagement and further analysis,structured as follows:Section

132、 2.2 which provides stakeholder views of the strengths of the UK CAM sector for investment global competitors;territories investing into the UK;barriers to investment;and expected areas of growth in investment.These are compared with the international markets perspective in Section 3.8.Section 2.3 w

133、hich provides stakeholder views of the strengths of the UK CAM sector for sourcing;territories sourcing from the UK;global competitors;barriers to sourcing;and expected areas of growth in sourcing.These are compared with the international markets perspective in Section 4.8 Section 2.4 policy and reg

134、ulation came up extensively as cross-cutting factors that influenced both sourcing and investment,and have therefore been considered separately.Section 2.5 which provides stakeholder views of how the UK engages with the international CAM business community.These are compared with the international m

135、arkets perspective in Section 6.6.Section 2.6 which summarises stakeholders views on how the UK CAM sector could become more attractive for sourcing and investment.Section 2.7 which summarises the findings from the engagement with UK stakeholders.Additionally,as part of the baselining research,a com

136、parison of UK CAM marketing materials against key territories is presented in 2.8,informing later analysis of the UKs engagement efficacy.International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 19 2.2 Snapshot of UK stakeholder interview results F

137、igure 1-UK stakeholder interview results International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 20 2.3 The UK as an investment destination 2.3.1 Investment strengths When discussing the UKs strengths as an investment destination,a majority of sta

138、keholders identified the UKs human capital as the key strength that would likely encourage investment.Areas noted in particular were the UKs capabilities and skills in engineering,software development and human factors.As an extension of this,the UKs universities and general R&D capability were perc

139、eived by stakeholders as world leading,and are a key contributor to investment into R&D facilities and business in the UK,for example Waymos acquisition of Latent Logic.The UKs CAM testbed infrastructure was also generally recognised as a key strength,having benefited from significant investment in

140、recent years.One stakeholder had a strong opposing view,arguing that the testbeds have had little effect on investment into the UK CAM sector as OEMs prefer testing infrastructure that is closer to their R&D and production facilities.Other perceived strengths that position the UK well for investment

141、 noted by stakeholders include:The general UK CAM eco-system,which UK stakeholders represented as being highly collaborative across the panacea of industry,academia,and government;and,The general environment for business and investment in the UK,that is broadly seen as positive compared to other ter

142、ritories(although the UKs withdrawal from the European Union was articulated as creating short term uncertainty).In particular,the UKs historic activity in the automotive sector was seen as a strength.A historical strength noted by some stakeholders was the level of R&D funding provided by governmen

143、t through Innovate UK.Stakeholders felt the funding had helped to develop the CAM eco-system in the UK and support SMEs/start-ups in particular.However,the lack of ongoing funding was raised as a barrier,as discussed further in Section 2.3.2.Specific UK CAM sectors referenced by stakeholders as like

144、ly to see investment by the international market in the coming years are detailed in the table below.Table 2-Stakeholder perspective of UK CAM sectors likely to receive investment Technology Software development,including components(e.g.visualisation and Simultaneous Localization and Mapping(SLAM)an

145、d the full software stack AI/ML Simulation 2.3.2 Barriers to investment Stakeholders identified a range of potential barriers to investment in the UK CAM sector.A frequently cited barrier is the general position of the automotive market,with some stakeholders stating that there has been a notable de

146、crease in developments and investment in CAM since the market is focusing instead on electrification and alternative fuels.This is seeing OEM R&D spend/investment being re-directed to zero emission technologies.Stakeholders felt this was a global issue,rather than being specific to the UK,and that t

147、his would shift in the future as CAM becomes a higher priority agenda item.International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 21 Another barrier raised by a number of stakeholders is the UKs limited production capability in the automotive sec

148、tor(despite ranking 5th in Europe and 16th globally for number of vehicles produced5),potentially due to the strength of the countries in this study.Stakeholders do not expect significant investment in production in the UK CAM sector,instead expecting targeted investment into niche sectors,and/or th

149、rough the opening of R&D centres,drawing on the UKs human capital.A final barrier that was a recurring theme with stakeholders was the limited investment by the UK government and industry into the UK CAM sector.Two interlinked factors were noted as a combined deterrent for international investment t

150、hat UK government R&D funding for CAM has ceased,and that UK financial institutions are not investing into the UK CAM sector.The perception is that if UK government and financial institutions were investing in UK companies,this would attract market interest and would aid UK start-ups in particular i

151、n scaling from proof of concept,to production scale.One stakeholder noted that there was a risk that many UK CAM start-ups would fail without further innovation funding support,whilst another noted that lack of UK financial institution investment in UK companies was an industry wide issue,rather tha

152、n specific to CAM only.Other barriers to investment referenced by individual stakeholders include:The UK and Europes relatively small markets and financial institution investment pots,as compared to Asia and North America.The UK being a left hand drive country,limiting the potential market for sales

153、.High energy prices in the UK and the limited amount of land for new factories,which could be a commercial barrier for companies looking to set up larger scale manufacturing facilities.Whilst not seen as a current barrier,one stakeholder referenced the National Security and Investment Act,which coul

154、d be a blocker in future to acquisition of UK companies in the CAM technology sector.The Act allows Government to scrutinise and intervene in investment to protect national security and covers several sectors related to CAM,including AI and robotics,that overlap with the defence sector.Additionally,

155、one stakeholder noted that acquisition of UK companies by foreign companies is not actively encouraged by Government,due to the risk of human capital and IP being taken out of the UK;rather,other forms of investment are preferred.2.4 Expected investment Whilst stakeholders identified a number of UK

156、CAM offerings in which they expect to see potential investment in coming years,a number of stakeholders stated that development and investment activity in CAM market as a whole has slowed recently.As such,there was a view amongst multiple stakeholders that whilst investment may continue,it would be

157、highly targeted on niche services required to deliver early CAM use cases(such as freight and logistics).It was also raised that younger OEMs,with more agile approaches than legacy vehicle manufacturers may be more likely to invest in the short term,particularly where they are able to draw on substa

158、ntial financing.UK CAM technology offerings referenced as potential targets for investment include:Companies,such as Five and Oxbotica,who offer full stack capabilities.However,one stakeholder believed there would be limited investment in this area due to market saturation.Simulation software compan

159、ies,such as AB Dynamics and rFpro.Sensor companies,including Fusion Processing.5SMMT Motor Industry Facts 2020:https:/www.smmt.co.uk/wp-content/uploads/sites/2/SMMT-Motor-Industry-Facts-Nov-2020.pdf International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SE

160、NSITIVE 22 Cyber security.Companies offering full CAM solutions in the freight and logistics space,such as Starship.When discussing future investment potential,several stakeholders expected that investment would focus on R&D capability in the above sectors,as opposed to large scale production and ma

161、nufacturing.This is due to a historical lack of scaled production in the automotive sector in the UK.2.4.1 Territories investing into the UK CAM sector Stakeholders referenced five territories as sources of investment into the UK CAM sector:China,Germany,Israel,Japan,and the United States.Internatio

162、nal perceptions from three of these countries Germany,Japan and the United States have been examined through the quantitative survey and qualitative interviews of senior decision-makers.Decision-makers from CAM companies in Israel were also included in the qualitative interviews.Beyond these four co

163、untries,South Korea was included in the quantitative survey and qualitative interviews.An investment example repeatedly referenced by stakeholders was Waymos acquisition of Latent Logic.2.4.2 Global competition for investment Stakeholders referenced a number of territories that are competing with th

164、e UK for CAM investment,although there was no consensus or frequently cited territory.Territories referenced include:The Netherlands recognised as having a strong policy and tax regime for encouraging investment Singapore recognised as having a strong policy position and benefiting from being an isl

165、and nation with a compact geography for testing Israel recognised as having a strong start-up environment,particularly in software,AI,cyber security and sensors The United States,Japan and South Korea each recognised as having a strong OEM presence,which aids in developing a CAM sector and investmen

166、t.2.5 The UK as a sourcing destination This section focuses on perceptions of the UKs CAM sector as a sourcing destination by international companies.It is notable that when discussing sourcing,stakeholders consistently identified that the global CAM market was relatively immature and thus sourcing

167、at scale was not yet being seen at a global level.Rather,stakeholder perceptions were that current sourcing in the CAM sector is largely focussed on component software and products by Tier 1s and OEMs in their development of complete CAM solutions.2.5.1 Sourcing strengths Stakeholder perspectives of

168、 the UK CAM sector as a sourcing destination consistently recognised the strengths of the UKs R&D,software and service capabilities,as detailed in the table below.In particular,UK stakeholders referenced niche capabilities in sensor development,cyber security for CAM,and development of software to s

169、upport CAM operation as the UKs strongest technology areas related to CAM that are likely to be of interest to the global market from a sourcing perspective.International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 23 Table 3-Stakeholder perspective

170、 of the UKs sourcing strengths by technology Technology Sensors,including radar Cyber security Software development,including components(e.g.visualisation and SLAM)and the full software stack Simulation AI/ML Testbeds When discussing specific companies in the UK CAM sector,CAM software companies wer

171、e frequently cited,including Five and Oxbotica,both of whom are developing a full software stack for automated driving.Aurrigo and Arrival were also noted as UK CAM leaders,in offering a full CAM service including the vehicles themselves.Beyond specific technologies,the strength of the UKs universit

172、ies and human capital were referenced as key strengths for both sourcing and investment,whilst the UKs policy and regulatory position were also referenced(as further discussed in Section 2.6).2.5.2 Barriers to sourcing A number of perceived weaknesses or barriers that could prevent growth of the UK

173、as a sourcing destination for CAM products and services were noted by stakeholders.The most common weaknesses raised related to the UKs limited production capability,and the impact of the UKs withdrawal from the European Union.A weakness consistently raised by stakeholders is the UKs limited product

174、ion capability in the automotive sector,particularly the low number of OEMs and Tier 1 suppliers in the UK.This places the UK in a relatively weak position in the global supply chain for automotive products currently,and limits the potential for growth(as stakeholders assumed that CAM growth is like

175、ly to be seen in territories with an existing strong capability in automotive production).One stakeholder also raised that international OEMs are more likely to source from their home territory and/or from existing supply chains,given historic relationships.The impact of the UKs withdrawal from the

176、European Union was another common response from stakeholders.Although it was largely recognised that the medium to long term impact of the UKs withdrawal from the EU is currently unknown,the uncertainty around trading negotiations and challenges in trading with Europe in particular,were noted as bar

177、riers to both sourcing and investment.It was also recognised that this uncertainty could impact UK start-ups and SMEs who may struggle to trade effectively with European nations,and that some level of support/guidance could be beneficial.Rules of Origin were raised as a particular challenge to overc

178、ome,and it was noted that this was affecting parallel automotive sectors,at least in the short term,including technologies related to alternative fuels for vehicles.Other barriers to sourcing raised by stakeholders include:The UK CAM sectors marketing capabilities and quality of information produced

179、.International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 24 The cost of production in the UK relative to other territories,which leads to higher prices.2.5.3 Expected growth in sourcing UK stakeholders identified a number of key offerings that cou

180、ld see a growth in sourcing as the market for CAM develops further,though there was no consensus on which technology areas pose the greatest opportunities.CAM offerings referenced include:Companies,such as Oxbotica,expanding their existing software stack capabilities to deliver a full CAM product,as

181、 has been demonstrated by Aurrigo.Expansion into full CAM product delivery,particularly of pod/shuttle type vehicles,was generally expected to gain interest from the international market.Sensors and semiconductors,which were both recognised as existing strengths that could grow further.Development o

182、f specific CAM products for the freight and logistics sector,such as last mile deliveries and airport operations.Data services,including data connectivity and communications,to support data flows in the CAM ecosystem.This also extended to harnessing of data for network management.2.5.4 Territories s

183、ourcing from the UK CAM sector Stakeholders were typically unable to reference territories sourcing from the UK CAM sector with confidence.Japan was the only territory repeatedly referenced as a territory sourcing CAM related goods and services from the UK,with other countries referenced including A

184、ustralia,Canada,Israel,South Korea and the United States.As mentioned above,four of these countries are examined in this study.2.5.5 Global competition for sourcing As previously noted,there was a general view amongst stakeholders that the global market for sourcing of CAM goods and services is rela

185、tively immature.As such,the majority of stakeholders chose not to comment on which territories are competing with the UK to be a sourcing destination for CAM.Where stakeholders did postulate which countries the UK is competing against,these countries broadly fall into two categories:Territories with

186、 a strong automotive sector and OEM presence,with local OEMs driving development of a local CAM sector.This includes China,Germany and the United States.Territories which are encouraging R&D and supporting start-ups in the CAM sector.This includes Estonia,Israel and Singapore.2.6 Policy,regulation a

187、nd fiscal incentives Policy,regulation and funding were recognised by stakeholders as critical drivers of sourcing and investment decisions and were discussed at length.The following sections provide further details on the perceived strengths and weaknesses of the UKs policy and fiscal incentives in

188、 the CAM sector.2.6.1 Policy and regulation There was broad consensus amongst stakeholders that the UKs early activity developing policy to support trials of highly automated vehicles on the public highway has successfully helped position the UK as open for CAM trialling;of particular note was the C

189、ode of Practice:Automated Vehicle International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 25 Trialling6.The relatively light-touch approach to regulation of trials on the public highway(for example,not requiring bonds)was recognised as a strength

190、that would help to encourage companies to come to the UK to develop and trial CAM technologies.The recent government announcement7 regarding the use of Automated Lane Keeping Systems(ALKS)on the public highway was also referenced by multiple stakeholders as a positive indication to the market that t

191、he UK is open to CAM development and adoption by the public8.Such announcements were seen by stakeholders as a clear message to the market that not only can CAM technologies be sourced from the UK,but that the UK has a market to sell CAM technologies into.Whilst stakeholders felt the UK had worked q

192、uickly initially in developing policy related to CAM testing,there was a general consensus that more needs to be done for the UK to keep up with its international competitors,and that this needs to be done quickly(without compromising safety).It was noted that a number of countries had looked to rep

193、licate the UKs approach to CAM policy,including Singapore which has developed an AV roadmap,a regulatory sandbox testing environment and national standards for deployment of automated vehicles(Technical Refence 68,or TR68)and that other countries were now pushing ahead of the UK,including China,the

194、Netherlands,Germany and France,as well as the state of California.Specific points raised by stakeholders include:The lack of a clear government strategy,roadmap or framework for further roll out of CAM technologies on the public highway.The absence of a clear strategy for encouraging sourcing from,o

195、r investment into,the UK CAM sector.The difficulty in delivering large-scale trials and/or commercial CAM deployment on the public highway.The perception shared by stakeholders was that whilst in theory the Code of Practice9 enables trials on the public highway,in practice the range of permissions a

196、nd approvals needed when wanting to carry passengers in a vehicle,without a clear process to navigate,creates a significant barrier to actually delivering trials.The interpretation of guidance as requirements by authorities was also noted as a blocker to trialling.Stakeholders noted that the market

197、and local authorities had tried to undertake larger-scale trials but were not successful in delivering them.This difficulty,and the subsequent lack of visible large-scale trials,were raised as key deterrents to sourcing and investment by multiple stakeholders.The work by the Law Commission on automa

198、ted vehicles,and the CAV PASS project were both noted as good initiatives,but need to be accelerated to work quicker to help UK policy and regulation for CAM keep ahead of the international community.A risk was raised that should the UK develop policy,regulation and/or standards that diverge from th

199、at of Europe and the international community,this could deter market sourcing from,and investment into,the UK CAM sector.6 Centre for Connected and Autonomous Vehicles(2019)Code of Practice:Automated vehicle trialling.7 Department for Transport,Centre for Connected and Autonomous Vehicles,and Rachel

200、 Maclean MP(2021)Government paves the way for self-driving vehicles on UK roads.Available at:https:/www.gov.uk/government/news/government-paves-the-way-for-self-driving-vehicles-on-uk-roads Accessed 21 May 2021 8 The announcement regarding ALKS was made during the period UK stakeholder interviews we

201、re conducted;the timing of this may have influenced stakeholder views.9 Centre for Connected and Autonomous Vehicles(2019)Code of Practice:Automated vehicle trialling.International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 26 2.6.2 Fiscal incentiv

202、es Similar to policy and regulation,stakeholders largely felt that the UK had made a strong start in supporting CAM development in the UK.Of particular note was the R&D funding made available through Innovate UK,which had helped to build the UKs CAM ecosystem and helped start-ups to demonstrate thei

203、r capability and thereby attract investment.However,stakeholders shared the view that the drop-off in government R&D funding for CAM meant the UK is now falling behind its competitors,and that there is a risk that the CAM ecosystem could shrink without further innovation funding support.2.7 Engageme

204、nt efficacy In terms of engagement efficacy,stakeholders were consulted on the UKs approach to engaging with the international CAM market.Several stakeholders noted that there had historically been effective work to promote the UK CAM sector internationally;of particular note was the Britain Is Grea

205、t campaign which included UK CAM pods.Stakeholders felt that,where the main actors in the UK CAM sector had worked together to engage with market,this has been highly effective for example in taking a team effort approach at international trade shows and conferences.However,it was felt that whilst t

206、here was early success with engaging the international market,this has diminished in recent years,largely due to a lack of funding and a re-prioritisation of effort.It was recognised that the international CAM community is increasingly growing,and that it is increasingly difficult to stand out in th

207、e market.UK stakeholders articulated that:At this critical stage of the CAM market maturing,with UK companies emerging from the proof of concept stage into production,much more work is needed to promote UK CAM and engage the international market.The lack of recent funding and focus by Zenzic to prom

208、ote the testbeds and the wider UK CAM ecosystem is a significant limitation,with more work needed to promote the UK CAM sector.There is a lack of a coherent strategy and leaders to co-ordinate and drive engagement with the market.It was felt that whilst key actors such as CCAV,the DIT and Zenzic are

209、 undertaking their own initiatives,this is not joined-up and thus an opportunity is being missed.UK stakeholders also represented that government should work more closely with industry and academia to help promote UK CAM.In terms of messaging and materials,stakeholders felt that there is a lack of c

210、lear messaging on the UKs strengths and that existing communication materials are overly focussed on projects and companies,rather than the eco-system as a whole thus failing to tell the story of why source from/invest into the UK?.Finally,several stakeholders noted the lack of guidance and support

211、given to international companies looking to source from,or invest into,the UK CAM sector.Personal support to companies,to help them navigate the market and understand the UKs processes and regulations was felt to be missing,with other countries,such as Germany,doing this well.2.8 Improving the attra

212、ctiveness of the UK CAM sector UK stakeholders were consulted on what they believed should be done to improve the attractiveness of the UK CAM sector for sourcing by,and/or investment from,the international market.Responses are detailed below under the themes of policy and regulation,fiscal incentiv

213、es and engagement.International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 27 2.8.1 Policy and regulation There was general consensus amongst stakeholders that the UK should work more quickly to develop policy and regulation that enables larger-sca

214、le testing and commercial deployment of automated vehicles on the public highway,including providing clear guidance on the process of gaining type approval(and in a quicker timeframe).This would have multiple benefits,including making a clear message that the UK is open to CAM testing and deployment

215、;and in stimulating large scale trials by UK companies that would help promote them internationally for sourcing and/or investment.Such policy and regulation should be supported by a credible roadmap/strategy and political support,to maximise market interest.Several stakeholders noted that following

216、 the UKs withdrawal from the European Union,there is an opportunity for the UK to develop policy and regulation CAM at a faster pace than European counterparts.This could aid in gaining market interest in the UK,as the UK market would be open ahead of Europe.Additionally,the opportunity for the UK t

217、o develop free trade agreements was raised by one stakeholder as an opportunity to support sourcing.An opportunity was noted for the UK to also push ahead of international competitors by placing a focus on CAM now,whilst other territories remain focused on electrification and alternative fuels.2.8.2

218、 Fiscal incentives Stakeholders generally felt there is no need for direct fiscal incentives to support sourcing;however fiscal incentives were thought to be required to support investment into the UKs CAM market.As previously noted,UK government R&D funding for CAM has ceased,and UK financial insti

219、tutions are not investing into the UK CAM sector.Stakeholders generally held a view that UK government funding and investment should be used to support UK CAM start-ups,and to deliver larger scale trials in order to aid UK CAM companies to demonstrate their functionality,capability and maturity,whic

220、h would thereby help attract international investment.An example of an investor partnership model was raised,which could help bring together government and financial institution investment to support sector growth.Other points regarding fiscal incentives raised by individual stakeholders include:If

221、further government R&D funding becomes available,it should be directed at a smaller number of larger demonstration projects,rather than a large number of smaller projects.Larger demonstration projects were felt to be more effective in gaining market interest.Government R&D funding or investment shou

222、ld focus on supporting the transition from proof-of-concept to commercialisation.The potential,in the long term,for government to stimulate CAM adoption by businesses and the public through grants for premium CAM features(such as ALKS),which could help reduce fatalities on the public road.This would

223、 have the benefit of supporting demand for CAMs,in a similar approach to the low emission vehicle plug-in car grant that currently operates.Finally,stakeholders commented that Government and Treasury should take a longer-term approach to investing in the UK CAM sector,noting that investment into zer

224、o emission mobility by Government has been ongoing for over 10 years,and that similar levels of investment may be required to simulate the UK CAM sector.2.8.3 Engagement In terms of engagement with the international market,stakeholders generally felt there is need for a fresh communications,marketin

225、g and engagement approach to help sell UK CAM abroad,International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 28 focusing on the ecosystem as a whole and key sector strengths,rather than specific projects or companies.This should be developed in co

226、llaboration by the main UK stakeholders responsible for CAM,including CCAV and Zenzic,as well as BEIS and DIT,amongst others.This would help show that the UK CAM sector is open for business,whether for sourcing or investment.Additionally,there was general consensus that tailored support to UK compan

227、ies to engage with the international market,and support to the international market to engage with UK companies,could be of significant benefit.This would include giving direct guidance and support to international companies to understand the market opportunities,and in navigating rules and regulati

228、ons.It was noted,however,that currently the global automotive market is focussed on electrification and alternative fuels,and therefore there may be less interest at this point in time in CAM.2.9 SWOT A SWOT analysis was conducted and is presented on the following page,summarising UK stakeholder per

229、spectives regarding sourcing from and investment into the UK CAM sector,as well as perspectives of the UKs engagement efficacy.Additionally,the SWOT draws on findings of a review of key Government and industry publications,providing further insights which inform the UKs self-perspective.Documents re

230、viewed were:HM Government(2020)Innovation Is Great Connected And Automated Vehicles KPMG(2020)2020 Autonomous Vehicles Readiness Index SMMT(2019)Connected and Autonomous Vehicles 2019 Report/Winning the Global Race To Market Zenzic(2020)UK Connected and Automated Mobility Roadmap to 2030 CAM Creator

231、s Update This SWOT analysis serves as this research studys in-going hypotheses,to be compared against views of the international market.International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 29 Table 4-SWOT:UK Perspectives UK as a sourcing destin

232、ation UK as an investment destination Engagement efficacy Strengths/Drivers The sector has strengths in niche technologies that are of interest from a sourcing perspective,including sensors,cyber security,software,simulation and AI/ML.Wider CAM ecosystem offerings,including R&D capabilities and Test

233、bed UK are seen as strengths.Early government policy activity has shown the UK as open to CAM,including the recent ALKS announcement.440 million of government and industry investment in CAM R&D,involving over 200 organisations.Strong cross-sector collaboration between government,industry and academi

234、a for CAM development and regulation,supported by an excellent research base and world-class innovators,shows the UK as open to CAM sourcing and investment.The UKs key strength in the CAM sector is its human capital and R&D capability;investment is expected in R&D centres/capabilities to draw on our

235、 human capital.CAM Testbed UK is seen as a strength for encouraging investment,whilst Zenzics Safety Case Framework provides direction for safety testing and trialling of CAM in the UK by providing a clear approach to safety case development.The 2020 Autonomous Vehicles Readiness Index10 places the

236、UK second only to Singapore for having a supportive policy regime for CAM.The general environment for business and investment in the UK.Strong cross-sector collaboration between government,industry and academia for CAM development and regulation,supported by an excellent research base and world clas

237、s innovators,shows the UK as open to CAM sourcing and investment.Historically,the UK has been strong in selling its CAM capability globally;however,this has diminished in recent years.Weaknesses The lack of large-scale automotive and component production in the UK is a key barrier to producing goods

238、 for large scale sourcing.The global market for sourcing CAM products and services is not yet developed,as the technology has not reached maturity for widespread deployment.Historically,policy,regulation and innovation funding have put the UK in a strong global position for testing;however,we are st

239、arting to fall behind with a need for larger scale public highway testing,which is very difficult to do under current policy and regulation.The lack of large-scale automotive and component production in the UK limits potential for investment into production.The lack of UK financial institution and g

240、overnment investment into the UK CAM sector,which creates challenges in scaling up CAM innovation and trials.Engagement has reduced in recent years;and there is no clear body responsible for selling UK CAM abroad,with a disjointed approach across key actors.Marketing materials need to be refreshed t

241、o develop a stronger investment story.There is a lack of tailored support to help international stakeholders navigate the UK CAM market to source and invest.10 KPMG(2020)2020 Autonomous Vehicles Readiness Index International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study

242、 OFFICIAL-SENSITIVE 30 Opportunities There is an opportunity for the UK CAM industry to nurture its capabilities in full software stack and CAM products(e.g.Pods),to offer a full solution to the market.Other opportunity areas include sensors,semiconductors,data services and CAM products for the frei

243、ght and logistics sector.The UK is well positioned to take a leadership role in CAM data sharing,interoperability and cyber security Key areas expected to see investment in the future include software development,AI and simulation.Having withdrawn from the European Union,there is an opportunity for

244、the UK to get ahead of its European counterparts on policy,regulation and type approval,which would capture the interest of industry investment.Development of a clear roadmap for CAM adoption.Government is working to ensure that CAM can be deployed at scale,including regulation on insurance for CAM,

245、the CAV PASS(Connected and Automated Vehicle Process for Assuring Safety and Security)project and undertaking a review of legislation.There is an opportunity to sell the UKs key CAM strengths as clusters,such as cyber security,simulation and full software stack.A cross-government/actor effort,led by

246、 one team,could re-engage with international industry to promote UK CAM.Threats The UKs withdrawal from the European Union has created uncertainty,which is bad for trade.Acquisition of UK companies by foreign companies,which is not encouraged due to the risk of human capital and IP being taken out o

247、f the UK.Globally,automotive investment has shifted from CAM to electrification and zero emission mobility,meaning there is less R&D and investment funding available in an increasingly competitive market.A lack of government and financial institution investment means it is very difficult for UK star

248、t-ups to grow from proof of concept stage,to scaled delivery.4G connectivity on motorways is strong at 90%,however coverage on A and B roads is relatively weak at 58%,and other markets are pushing ahead with 5G delivery faster than the UK11.The UK has a strong CAM ecosystem but a lack of resources t

249、o sell it;there is a risk of the sector contracting if investment is not made.Significant funding was spent on developing UK CAM Testbed,with little funding to now sell it abroad.There is a risk that the opportunity to sell the testbeds is missed.11 Ofcom(2017)Connected Nations Report,as reported in

250、 SMMT(2019)Connected And Autonomous Vehicles 2019 Report/Winning The Global Race To Market International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 31 2.10 UK CAM marketing materials international comparison As part of the baselining activity,a hig

251、h-level assessment of UK CAM capability marketing material has been undertaken.This has assessed UK CAM marketing materials with those of other leading territories,providing an evaluation of the comprehensiveness,quality,differentiation and availability of the materials.This high-level snapshot,pres

252、ent on the following pages,provides context to the engagement efficacy analysis presented later in this report.The assessment found that UK CAM marketing materials are:Generally freely available and easy to find online.Comprehensive in the range of information provided at a UK level,but limited sect

253、or or geographical detail is provided.Generally produced to a high quality,though imagery is repeated,and the investment storytelling component of the market materials is lacking.This latter point was also identified for materials produced by the other key territories.International Perceptions of th

254、e UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 32 Table 5-Baselining:The UK CAM Sectors Marketing Material vis-vis other Countries Territory Comprehensiveness Quality Differentiation Availability UK Comprehensive range of information provided at a UK level;content is a

255、imed at marketing key strengths,with limited detailed information of the CAM ecosystem provided.Little information at a disaggregated level(e.g.UK cities).Scotland is the only national with separate marketing materials.Quality is to a relatively high standard,using graphics/infographics to engage th

256、e reader.The same images/photos are often repeated.The investment storytelling component is weaker.Government R&D funding is heavily emphasised,as is CAM Testbed UK.Key marketing materials are open for free access,although in some cases an email address/contact details are required(for example,to ac

257、cess Zenzics Roadmap).Materials are easy to find,and available in English.Germany Moderate level of information provided at a national level,with little disaggregated(e.g.state level)information found.Visually engaging brochures are available with high quality,though the investment storytelling comp

258、onent is weaker.Strong focus on promoting technologies,rather than the ecosystem,use cases,etc.Key marketing materials are open for free access.Only a limited number of documents are in English,with the majority in German.Japan Moderate level of information provided at a national level.Materials are

259、 generally text heavy,and do not appeal to a more visual audience.The quality of the content and investment storytelling is weak.Industry appears to lead marketing,rather than government.Key marketing materials are open for free access,but are very difficult to find in the English language.Only a li

260、mited number of documents are in English,with the majority in Japanese.South Korea A very limited amount of marketing information is available;what can be found is in Government press releases,rather than detailed marketing materials.Publications are generally visually appealing,but the investment s

261、torytelling component is weaker.Strong emphasis on CAM ecosystem services,such as testing,and on promoting use cases.Key marketing materials are open for free access,but are very difficult to find in the English language.Only a limited number of documents are in English,with the majority in Korean.U

262、nited States Comprehensive level of information provided at national level,with several states also publishing more details local materials.Large amount of detailed,high quality information on the CAM sector through text heavy reports;however,there are not overly engaging and there is a minimal amou

263、nt of more engaging marketing content.The investment storytelling component is lacking.Strong emphasis on use cases when promoting technologies/capabilities.Key marketing materials are open for free access.Materials are easy to find,and available in English.International Perceptions of the UKs Conne

264、cted and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 33 3 The UK as an Investment Destination 3.1 Introduction As described in the Introduction,two of the key objectives of this study are to:Understand intentions for organisations to invest in UK CAM,and Understand the drivers and barr

265、iers of investment facing these organisations This section sets out the insights and information drawn from the international surveys and interviews to examine perceptions of the UK as an investment destination.Since section 5 on the SWOT analysis focuses more on the UK in comparative perspective,th

266、is section does not draw out comparisons with other countries.The section is structured into the following sub-topics:Section 3.2:Snapshot of survey results Section 3.3:Country snapshot(Germany,Japan,South Korea,and the United States Section 3.4:Current interest in the UK as an investment destinatio

267、n Section 3.5:Redacted Section 3.6:Investment drivers and barriers Section 3.7:Future interest in the UK CAM sector Section 3.8:International market perceptions vs.UK stakeholders self-perception of the UK as an investment destinationInternational Perceptions of the UKs Connected and Automated Mobil

268、ity Sector:Market Study OFFICIAL-SENSITIVE 34 3.2 Snapshot of survey results Figure 2-Survey snapshot:Investment into the UK International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 35 3.3 Country snapshot Figure 3-Country snapshot:Investment into

269、the UK International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 36 3.4 Current interest in the UK as an investment destination Broadly,for the UK CAM sector,the international market for investment can be segmented into three categories:Those who ar

270、e investing internationally,including in the UK Those who are investing internationally,but not in the UK Those who are not investing internationally at all The general findings on investment interest are described in the following sub-section while the barriers and drivers for these are outlined in

271、 Section 3.6.Among those who are investing internationally,there appears to be a high degree of interest in the UK CAM sector as an investment destination,with over two-thirds of those respondents whose companies are investing internationally having some form of investment in the UK.This was mirrore

272、d in interviews with a good portion of stakeholders noting that they were either investing in the UK market or were considering it.Among international investors of individual countries,74%of South Korean respondents and 69%of Japanese respondents who are investing internationally are investing in th

273、e UK.This proportion is lower for the US and German markets at 64%and 62%respectively.It is worth noting that of the whole sample for each country,less than half of the respondents are investing in the UK(35%for Germany,40%for Japan,44%for South Korea,and 46%for the US).Over 70%of the respondents wh

274、o are investing in the UK said that their investment is in the form of foreign direct investment,which includes the opening of subsidiaries or associate companies,acquisition of a controlling interest in an existing company,or entry into a merger or joint venture with a UK company.Only 25%said that

275、their investment was in the form of indirect investment or purchases of securities that represent claims on other indirect securities.It was noted in interviews that,given the relatively immature nature of the CAM sector and the significant upfront investment required to develop suitable technologie

276、s,many organisations are looking at joint ventures to help distribute some of the capital risk associated with developing CAM innovation.Another route to investment highlighted by some interviewees was through the establishment of sales centres.These sales centres tend to be established by B2C compa

277、nies to enable the respective organisations to directly sell their products more effectively into the UK market.Redacted Examining the type of investment from individual countries,respondents from Germany,Japan,and the US indicated a high proportion of direct investment(74-78%),though this was lower

278、 for South Korea at 61%.One interviewee from a South Korean OEM noted that when evaluating pitch decks for European companies seeking investment,the first point they check is whether the target companies have already received investment from any of the European OEMs,as the OEM cannot invest in such

279、targets due to International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 37 conflict of interest concerns.Given the CAM sector is still fairly immature with a small number of innovative,high value companies,the particular stakeholder noted that it i

280、s rare for their organisation to identify a company of interest that has not had some form of competitor investment previously.Whilst this insight was not directly noted by others interviewed,other OEMs may face similar concerns around competitors.3.4.1 International investors who do not invest in t

281、he UK A third of those who are investing internationally do not currently invest in the UK.Split by market,this proportion is highest for Germany and the US at 38%and 36%respectively,indicating that international investment from those countries is favouring other destinations over the UK.Some interv

282、iewees noted that in general,the UK was not perceived as a top investment destination and is not on the initial list of markets to explore for investment prospects.The rationale behind this for these organisations was a perceived lack of CAM organisations worth investing in in the UK.Redacted Redact

283、ed Redacted Redacted Redacted Redacted 3.4.2 Respondents who do not yet invest internationally 38%of the total sample of respondents are not yet investing internationally,indicating that there is an opportunity to attract investment into the UK CAM sector from those not yet investing internationally

284、.Among the individual countries in the survey sample,this opportunity seems to be particularly large for Germany and Japan where only 57%and 58%of respondents(respectively)are investing internationally.International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL

285、-SENSITIVE 38 Given the relatively immature nature of the CAM sector,this number is perhaps not surprising,with many interviewees noting that there are many smaller companies(including some in the panel)who are trying to establish themselves in the CAM sector rather than looking to invest internatio

286、nally.This was particularly evident in the Israeli market where interviewees often noted that there are several start-ups(predominantly focussing on cyber technologies).Separately,Israel was noted by multiple other interviewees as a destination for cyber security,and AI/ML investment.This was partly

287、 driven by perceived expertise in digital R&D as well as perceived lower R&D costs,making it more attractive to establish start-ups.One US stakeholder noted that there are several US companies that are exclusively focused on the US market despite having business models that could be applied elsewher

288、e.There is,therefore,an opportunity to attract these companies to the UK by highlighting the value and ease of investing in and expanding to the UK.The stakeholder noted that these companies should be pitched on“cost,access to talent in the UK,access to Europe,ability to diversify testing and commer

289、cial base,access to legitimate commercial markets,and a clear and understandable regulatory environment in the UK.”Furthermore,the interviewee noted that this“US-centric”approach could also be leveraged by highlighting that some US companies may derive benefit from investing in the UK as a way to ga

290、in experience in a favourable and more advanced regulatory environment.These companies could subsequently take these experiences back to the US to spur regulatory development there.This approach provides US companies with a way to effectively work with US regulation and allows them to attempt to acc

291、elerate regulatory development in the US.Kittyhawk12 is seen to be a successful example of a company taking this approach through its investment into the New Zealand market,which it has then used to leverage discussions around policy in the US.3.5 Redacted Redacted 12 https:/ Perceptions of the UKs

292、Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 39 Redacted Redacted Redacted 3.6 Investment drivers and barriers In this section,the investment drivers and barriers are split into the three segments described in Section 3.4:international investors who invest in the UK;intern

293、ational investors who do not invest in the UK;and,respondents who do not invest internationally at all.3.6.1 International investors who invest in the UK As summarised in the survey snapshot,the top three factors that are currently driving respondents investment into the UK are:A perception of the c

294、ountrys high innovation potential(i.e.the factors that make it a strong innovator of CAM products,such as the R&D and skills ecosystem);An expectation of high growth in the UK CAM sector(i.e.in size and value);and An expectation of a high degree of end user acceptance of CAM among the UK population.

295、Among individual countries,whilst the data is not statistically significant(fewer than 30 UK investors per market),the UKs innovation potential is a particularly strong driver for investors from Japan and South International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study

296、 OFFICIAL-SENSITIVE 40 Korea.US-based investors rate the UKs CAM testing environment as an important factor(and do source testbed services from the UK,as covered in Section 4).Factors that investors into the UK did not rate as very important drivers of investment relative to other factors that were

297、presented as options are the availability of funding from UK government,the attractiveness of the software/IT market,and the overall growth potential of the UK economy.This finding contradicts a later finding(in Section 3.7.3)in which survey respondents highlighted government funding of innovation a

298、s an important driver of future investment.As reiterated in that section as well,this is potentially because investors tend to undervalue the importance of funding post facto.Key considerations emerging from this section Based on the above,to retain existing investors,it will be important for the UK

299、 CAM sector to:Continue investing in and highlighting the UK markets innovation potential Continue demonstrating the potential for the sectors growth Continue demonstrating the likelihood of end user acceptance of CAM For US investors specifically,there may already be a relatively strong interest in

300、 Testbed UK but this may have to be advertised to other markets(as well as further advertised within the US market).3.6.2 International investors who are not investing in the UK Among those respondents who are investing internationally but not in the UK,the top barriers to investing in the UK are:A

301、lack of understanding or insight into the UK CAM sector,A perception that growth will be held back by high costs(for example,of engineering and research capabilities),A view that it is too expensive to establish new relationships within the UK CAM sector;and,The factors that were rated the lowest as

302、 barriers were an insufficient automotive skills base,an insufficient digital skills base,and low end-user acceptance.The lack of a testing environment was also not a barrier.It is worth noting that since the sample size of those who invest internationally but not in the UK,is less than 15,insights

303、by individual country cannot be disaggregated.One international stakeholder noted that perceptions on cost may be inaccurate,and that the market could benefit from having a clearer view on key costs,such as land value.Redacted Redacted International Perceptions of the UKs Connected and Automated Mob

304、ility Sector:Market Study OFFICIAL-SENSITIVE 41 The top drivers of international investment according to those who invest internationally are:The overall growth potential of the countrys CAM sector,The strength of the countrys CAM-related infrastructure;and,The strength of the countrys CAM-related i

305、nnovation.Among individual countries,the overall growth potential of a countrys CAM sector was investors top reason for investing internationally.Redacted It is important to note that for the purpose of the survey,infrastructure and testbeds/testing environment were separated as options for responde

306、nts to select as drivers/barriers/future drivers of investment and sourcing destinations.Infrastructure was defined as physical infrastructure like roads and communications infrastructure like 5G.While infrastructure was rated as a key driver of international investment,testing environment was not c

307、onsidered as important.Key considerations emerging from this section Based on the above,there is clearly a strong role for marketing and international engagement to boost investment into the UK.The international market needs a better and deeper understanding of the UK CAM sector.Specifically,some of

308、 the information that will be important to attract existing international investors to the UK market are:The UK CAM sectors growth potential,A reassurance that growth will not be impeded by high costs,The UKs CAM-related physical and communications infrastructure(both available and planned),and The

309、UKs CAM-related innovation(both available and planned).Redacted The factors that international investors in general considered the least important were the level of government funding in the sector,the overall growth potential of the economy,and the attractiveness and stability of CAM policy and reg

310、ulation.Interestingly,the first of these does not correlate with what all participants want to see from the market going forward.One international stakeholder noted that they had looked at Government R&D funding opportunities in the CAM sector,but that funding was only open to UK based companies and

311、 they had therefore chosen not to invest in the UK.Potential reasons for this discrepancy are discussed in Section 3.7.3.3.6.3 Respondents who are not investing internationally As stated in Section 3.4,38%of the sample are not investing internationally at all.The predominant reason for not investing

312、 internationally is that all of the capabilities required for the companies CAM ambitions are available domestically.This is not surprising given that the four countries in the survey sample have strong automotive and technology sectors.Respondents cited their companies strong focus on zero emission

313、 vehicles and the COVID-19 pandemic as other reasons for not investing internationally in CAM.International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 42 When asked what improvements would drive them to invest internationally,these respondents cite

314、d the following as the top three factors:Stronger CAM-related physical or communications infrastructure,Stronger CAM-related innovation;and,Greater likelihood of end user acceptance.Respondents that dont invest are less concerned about the overall growth potential of the economy,the strength of the

315、wider automotive market,and the attractiveness and stability of the policy environment.Key considerations emerging from this section Based on the above,to attract those who are not investing internationally at all,the UK CAM sector should:Consider what its Unique Selling Proposition as an investment

316、 destination is for potential investors from Germany,South Korea,USA and Japan,which already have strong domestic CAM markets;Demonstrate the strong linkages and interdependencies between CAM and Zero Emission Vehicles through the lenses of policy,technology,infrastructure,and so on;Emphasise the st

317、rength of its CAM-related infrastructure and innovations(both existing as well as planned);and,Highlight the strong consumer market that it expects for CAM in the future.3.7 Future interest in the UK CAM sector 3.7.1 Level of interest Of the survey 41 respondents who invest internationally but not i

318、n the UK,27%would consider investing within 5 years and 32%in 5-10 years.Only 7%do not see themselves investing in the UK at all.Although the numbers of non-UK investors are too small per country for the results to be statistically significant,it is noteworthy that almost all of the non-investors fr

319、om US and Germany said they might invest in the UK in the next 10 years.On the other hand,almost all of the Japanese non-investors said they would not invest within the next 10 years.3.7.2 Future areas of interest Over a third of participants believe that the UK can have a USP in:R&D capabilities(45

320、%)Engineering capabilities(34%)AI/ML software,Sensors,and Autonomous Control Systems(33%).Interestingly,while R&D capabilities emerged as one of the Top 5 areas that investors are currently investing in,Sensors did not.This indicates that,while Sensors are seen as a future USP for the UK,there is li

321、mited current interest in investing in this area.International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 43 Redacted Redacted In respect of future use cases in which respondents believe the UK has a strength from a deployment perspective,applicati

322、on of CAM technologies to passenger vehicles and robo-taxis emerged as the overwhelming winner with over 62%of participants stating that the UK could have a USP in this.This finding correlates with the importance that respondents gave to end user acceptance as a driver of investment.54%also voted fo

323、r autonomous public transport as a potential use case,again not surprising because of the UKs strong public transport networks.41%of participants see the UKs value in first and last mile delivery.Fewer than 30%however see long-haul logistics or demand-responsive transport as strong areas for the UK.

324、These findings hold across the four individual countries in the survey.Key considerations emerging from this section Based on the above the UK CAM sector should develop and market its:o R&D capabilities o Engineering capabilities o AI/ML software o Sensors o Autonomous Control Systems A greater focu

325、s might be required on developing and marketing Sensors given that these have emerged as a future USP but not as a current investment product.Given that OEMs and CAM Pods are current investment strengths(as discussed in Section 4.5),some level of investment and development of these products may be n

326、ecessary to retain current investment even if these are not viewed as future USPs.If Testbeds and Cybersecurity are focus areas of the UK CAM sectors current industrial strategy,the perceptions of these among investors and potential investors will have to be improved.In respect to use cases,focusing

327、 on the UKs strength in testing and deploying CAM technologies in passenger vehicles/robo-taxis and public transport vehicles would help reinforce existing perceptions of these use cases as UK strengths.On the other hand,should the UK want to position itself as a strong contender for use cases in lo

328、ng-haul delivery or demand-responsive transport,existing perceptions would have to be changed.3.7.3 Perceptions of what would make the UK a more attractive investment destination Across the entire sample and all segments of respondents,at least 40%of participants believe that the following factors w

329、ould make the UK a more attractive investment destination:More or better CAM-related infrastructure(51%)International Perceptions of the UKs Connected and Automated Mobility Sector:Market Study OFFICIAL-SENSITIVE 44 More CAM-related innovation(48%)More government funding in CAM to attract innovation

330、(40%)The first two factors align with the drivers of investment that different segments noted above.Interestingly,however,while 40&of respondents said that more government funding in CAM would encourage them to invest more in the UK,as described above in the analysis of current drivers of investment

331、(Section 3.6),availability of government funding and incentives in CAM emerged as one of the least important drivers for international investment into the UK specifically.This could be because those who have already invested in the UK undervalue the importance of government funding post facto.Among

332、interview respondents,there were mixed views on the importance of funding from stakeholders interviewed with some citing it as not important,whereas others emphasised that it was extremely important.Several interviewees noted that there appears to be a funding gap between scaling R&D projects into l

333、arge scale demonstrations,and they see less evidence and intent from the UK on this.When interpreting the finding that level of government funding was not rated as a particularly important driver of investment in general,it is important to note that several of the other drivers that survey and interview respondents consider important could or would be achieved through greater government funding.Th