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Howes: Smart money, tech savvy looking to ... Detroit

Daniel Howes
The Detroit News

Detroit is cool again.

Don’t take my word for it. Look at what the smart money, the people whose business is to place bets on the next new thing, is doing. And they’re doing it with regularity and purpose that is changing the narrative of the city and Michigan.

Walt Disney Co. will use the North American International Auto Show next month to unveil the latest creation from its Pixar Animation studios — a life-size version of one of the stars in the animated “Cars 3” movie. Yes, Hollywood is coming to Detroit, in January.

More than 50 startup companies — all but two of them from outside Michigan — plan to pitch at the show’s first-ever AutoMobili-D confab to be arrayed outside the traditional auto show of metal and rubber.

In a big-company state for too long derided as a risk-averse venture-capital wasteland, VC firms, led by Detroit’s own Fontinalis Partners, plan to use the show and its gathering of tech startups to plumb for promising investments in the hot space.

“We have to be all about mobility,” says Chris Thomas, a founder and partner in Fontinalis, co-founded by Ford Motor Co. Executive Chairman Bill Ford Jr. “The thought leadership is being led from Detroit. What we have to do in Detroit, if we’re going to grab this opportunity with both hands, is create a virtuous circle.”

That may already be happening, judging by the action of people outside the Michigan bubble. They’re noticing, and they’re moving. Doesn’t matter if the cynics predisposed to always assuming the worst about Detroit, and saying so publicly, don’t get it. They’re not part of the solution.

Case in point: the cover of the latest edition of Sync, a magazine for information technology executives, carries a headline tailor-made for next month’s auto show: “Innovation Never Left Detroit,” it says, superimposed over the face of Ford’s Chief Information Officer Marcy Klevorn.

“Detroit: America’s Tech Hub Since 1903,” says the lead headline. “The Motor City’s comeback arrives at the intersection of cutting-edge tech and a spirit of collaboration” — not exactly the kind of sentiment you’d expect from a tech journal or a garden-variety skeptic lobbing potshots from the Oakland County suburbs.

“There’s an undeniable change happening in Detroit,” Managing Editor Adam Kivel writes in an editor’s note. “In order to have access to cutting-edge tools, innovators used to need to move to Silicon Valley. Today, employers can offer remote access to even the most complex processes.

“There’s been a democratization of many tech solutions, to the point that entrepreneurs anywhere in the country can start their own pocket of Silicon Valley innovation.”

Even in Detroit. That’s where the ecosystem of the hometown automakers, suppliers, software developers and others create what Fontinalis’ Thomas calls “the largest transportation technology cluster in the world. We can lead in Detroit.”

Sync Magazine: “As vehicles continue to be more connected to technology, the demand for highly capable tech professionals in Detroit and the surrounding communities continues to grow as well.”

This is not your father’s auto industry; it’s not even your slightly older brother’s. It’s a maker of technology platforms that resemble the cars and trucks of old, but their brains are powered by enormous amounts of computer code and related technology connecting steering and brakes, engines and infotainment that propose to drive itself.

Detroit automakers, especially Ford and General Motors Co., continue to hire engineers and software developers. Suppliers like Delphi Automotive PLC, deep in development of its own autonomous driving system, is doing the same.

Silicon Valley heavyweights like Apple and Google, Uber Technologies Inc. and Tesla Motors Inc. are playing heavily in the space, even as they’re coming to realize that success is not likely to come as easily as first thought. That’s opportunity for Detroit.

Numbers compiled by Sync from Automation Alley and the East Lansing-based Anderson Economic Group say employment in metro Detroit’s tech industry is up 15 percent, or 30,000 jobs, while employment in the same sectors in Silicon Valley is down 4 percent, or 10,000 jobs.

It’s not because of the weather. It’s because a new gold rush is on, a race for competitive advantage as likely to be run in Detroit as anywhere else in the world. That’s change to believe in.


(313) 222-2106

Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.