On August 25, I was one of more than 60 Yale School of Management students, faculty, staff, and local alumni who gathered with our families at the Connecticut Tennis Center at Yale for a lunchtime conversation about innovation and the future of the car industry—followed by a hard-fought semifinal tennis match.
Why the unusual venue and topic? Well, Yale University is a long-standing sponsor of the Connecticut Open tennis tournament, a major WTA tournament, and Porsche was a sponsor for the first time this year. And innovation, of course, is a focus of both organizations.
Yale’s chief investment officer, David Swensen, gave opening remarks, explaining that he was part of the team that first enticed the tournament to relocate from Stratton, Vermont, to New Haven, and noting that his tenure managing Yale’s assets has been defined by innovation—the “Yale Model” for endowment management is now the standard among universities.
Connecticut Open Director Anne Worcester also welcomed the group, before turning the conversation over to Andrew Metrick, Michael H. Jordan Professor of Finance and Management at Yale SOM. Metrick moderated a conversation with Zabih Aria and Jacob Harb of Porsche Cars North America, Yale SOM Deputy Dean David Bach, and Karen Seto, Frederick C. Hixon Professor of Geography and Urbanization Science at the Yale School of Forestry & Environmental Studies.
The panelists discussed how car companies must adapt to the realities of the future. For example, more people are moving to cities and want to drive electric cars that they can access on demand—without having to park them. Seto highlighted a fascinating statistic: every 10 days, the population of cities worldwide increases by one million people, which means we have to start designing our cities differently and thinking differently about how cars fit into them. In such a world, we need to shift our thinking about cars and urban environments, focusing less on individual mobility and more about creating access to transportation.
Today, owning a Porsche car may be the ultimate status symbol, but the car is already shifting its own thinking from ownership to sharing. The company’s representatives said that they view the shared economy as creating opportunities for greater brand loyalty, since subscription models require repeated engagement between a brand and consumers. (One audience member noted that horses are still a status symbol, even though people no longer need them for daily transport.) But they admitted that being an older company makes it harder to innovate; unlike a newer company like Tesla, Porsche has not been structured from the ground up to encourage cross-functional interaction, which is key to innovation.