Competing in a World of Digital Automotive Ecosystems

As digitization reshapes traditional industry boundaries, many are betting that an “automotive ecosystem” will be one of the first to develop. But what will it look like in practice, and when will such a competitive shift really take place?

McKinsey’s Start-up and Investment Landscape Analysis (SILA) tool paints a detailed picture of the evolving battleground. Through SILA’s semantic analysis of keywords and network analytics of relevant companies, clusters, and industry moves within the investment landscape, McKinsey identified ten technology clusters with more than a thousand companies combined that have received external investments since 2010 of about $111 billion.

In the past decade, the rate of mobility investments has increased nearly six-fold, and the median deal size has more than tripled. Around 60 percent of the total investment volume went into very large, industry-shaping deals. The rest went into a huge number of smaller deals. Notably, these investments focused on the technologies underlying the changes in mobility, not on products. In other words, investors are betting on an ecosystem. Tech companies and venture-capital and private-equity firms made more than 90 percent of the investments identified by SILA.