What is the impact of the coronavirus on the activities of Septentrio, a company that develops and commercializes high precision satellite navigation receivers? Will the developments of autonomous vehicles also slow down or maybe increase because of the corona virus? Will we see robot taxis in five years or will we see them at all? Is automotive really the most difficult market compared to the others? Read the interview with Jan Van Hees, Director Business Development of Septentrio, and member of Agoria's Transport & Mobility Club.

So, good morning. How are you?

Not too bad. How are you Ward?

I'm fine. I'm fine. Thank you for having this virtual cup of coffee with me. I see that you are not at home. Is that correct?

No, I'm not at home. I'm sitting at the office right now. We occasionally come to the office. It's been completely rearranged so that we can receive people, but I would say ninety five percent of the people work from home. Ninety five percent of the time. So it's very quiet here.

So you will not be disturbed by anyone?

I hope not. You know. Some people will start walking around now. Murphy's law ...

For people who don't know you. Can you explain a little bit what Septentrio does and what your role in the company is?

Yeah. My name is Jan Van Hees. I'm a director of business development, product management and marketing communications at Septentrio. I've been with the company for almost 20 years. Septentrio itself will turn 20 this year. We spun off from IMEC in 2000 to develop and commercialize high precision satellite navigation receivers, such as GPS Galileo and the like. When I say high precision, you have to imagine it's accurate to about one to 10 centimetres, which is one order or two orders of magnitude better than what you're used to with your phone or your normal GPS in the car for instance. And we have been focused on industrial applications, commercial applications from the outset. But we were also an important contractor in the Galileo programme, working for the European Space Agency to develop the European GPS, which is now operational. Our project activities for Galileo are strongly reduced now, we are fully focused on our commercial activities.

And you have, of course, interest from our side in the automotive domain. Can you illustrate how and where your technology is used in the automotive industry?

Yeah. So just to be complete. We develop the hardware, the ASICs, the software and the algorithms. And we've been applying these for 20 years in industrial markets that are looking for high precision localization, but are also safety and robustness conscious -- markets as construction, mining, offshore dredging drones and more recently smart city infrastructure also. And this combination of providing sub decimetre accuracy, high reliability in the sense that the receivers communicate the accuracy or maximum error of the positions they provide constantly  depending on the quality of the measurements and availability, so the ability to provide a position even under difficult circumstances. For instance, when jamming signals are around. Those are the four requirements that we have developed under the impulse of our industrial customers for the last 20 years.

And that coincides perfectly with what automotive companies are looking for in developing autonomy for the car. So in developing or moving from level two to level three driving and beyond, what they basically have to do is create a possibility to sense, to know what's around to car as part of the system.

That's the traditional sensors most people think about, like radar or lidar or vision. It is also very important to know where the car is, in an absolute sense, the localization part:  where it is, how fast it's going, and in what direction.

And in that part, GNSS or the type of GNSS, the type of GPS receivers that we develop are a key component because first of all, GPS as a signal is available everywhere. And that makes it an especially useful signal for positioning compared to any other kind of positioning like Wi-Fi, which is not available everywhere. It's also the only absolute positioning system around. So it actually indicates where you are in the world.

As such, it also provides a unique language for cars to communicate with each other so as to have car-to-car cooperation, connectivity - as opposed to the other measurement techniques that I just mentioned, such as radar or lidar. Which indicate where the car is with respect to another car or the side of the road? So in that sense, GPS or GNSS, a more broad term, and the combination GPS from America, the European Galileo and also the Russian and the Chinese systems, GNSS, is a unique central component in the localization element of the car. We have moreover reduced the footprint and the cost of our receivers from a pizza box-sized receiver 20 years ago to a module that's less than three by three centimetres today. It is really suited for very high volume, cost effective deployments. So what we are doing is providing this to tier-one suppliers for integration in control units --  electronic control units that form part of the steering system for self-driving cars.

Does that mean that typically Septentrio is tier-2 supplier?

Yeah, that's correct. We're a tier-two supplier. But even there, we have quite some interaction with OEMs directly because tier-one suppliers are typically not well versed in GPS and certainly not in the type of GPS that we make. The GPS that people are familiar with in the car does not provide the performance that's required for this kind of solution. So we have a lot of interactions with OEMs directly on an educational level and in assisting tier-one suppliers, but for the ultimate development of the ECU and large volume supply. Yes, we will supply to a tierone supplier while we act as a tier-two supplier.

Yes, I understand, and form your explanation, I also gather that your technology is totally different than what we know from infotainment GPS systems, which is in fact definitely aimed at safety functions. Autonomous driving, as you mentioned at level two, level three. On the other hand, for full autonomous driving, I think you will agree with me that we see a lot of less positive signals and a lot of people are starting to have doubts. Will we see robot taxis in five years or not at all? What's your opinion on that?

Well, I think what we see and I think you've also mentioned it in a recent webinar yourself, where we have this hype cycle that goes through these inflated expectations. I don't think we're going to have it next year. But I think that, as is the case with many of those technologies, we will eventually see a full self-driving car, a full self-driving car. But as you mentioned, safety is critical. Cars operate in an extremely messy environment, and that means safety in both an absolute and in an objective sense.  Then there is also the subjective feeling of safety for the people who are in the car. It'll take a lot of time to get to full autonomy, especially the transition from today from a non self-driving environment to a significant self-driving environment is a very messy transition in a mixed environment where not all cars have the required features to provide communication between each other and collaborative behaviour, which might facilitate safety. Right. So we have to go through this mixed mode world to get to a self-driving world if you want. And even then, it's probably never going to be completely self-driving and it's certainly not going to be completely structured. There will always be kids playing, running onto the street, people driving bikes and things like that. So what I think you will see is a gradual development towards this full self-driving, which I still believe will happen at some point. And we see that already today. The driving assistance, providing comfort, like highway cruise control. We see that with GM Super Cruise, we see it with Tesla. Or safety features like automated emergency braking or the use of full self-driving, quote unquote, already today or in the very near future.

But then in very structured and limited environments. And of course, that is not called L5. That's not the full everything, everywhere for everybody. But it still is full autonomy, if you want people being moved around on a campus at a very low speeds or freight transport on a predetermined path in an industrial park, where the trucks go on the road, maybe even in a mixed traffic mode, but with limited speed and in a very controlled or a predictable environment where you don't expect to see kids playing, for instance, to use the same example. And that will occur, I think, or maybe even things like dedicated lanes on a highway where self-driving cars are allowed and where there's no or not so much weaving in and out. Like you have today, for instance, in the US with the carpool lane.

So these kind of environments, I think, will allow full automation in a limited setting and will allow, first of all, to prove and improve the safety side of the car, but also to increase the safety feeling and the trust people can put in that. And then gradually those boundaries will be pushed out to get to more and more mixed environments and more and more the ideal world of the full self-driving car. But I think that's going to take some time.

Yeah. But you said you still believe that we will get there in the end?

Yes, I think we will get there in the end. Yes I’m sure of that.

And yeah, now we are all facing the Coronavirus crisis. Is there a Coronavirus effect on autonomous driving? For instance you can see that public transport is less used, car sharing is less used. Do you think that the developments of autonomous vehicles will also slow down or maybe increase because of the coronavirus?

I think. Well, there's obviously a slowdown that's purely economically driven today. People are unable to come to the office very easily, all the tests that are being carried out and other project work -- it's all slowing down just because of the way people have to work today. Even more importantly, I think that the OEMs and the tier-one suppliers are under very severe financial pressure because basically all the selling has dropped dramatically. So I think that you will see some back to the basics, of course, so make sure that he companies save their future financially in the short term.

On the other hand, you see and we also see that some of these programmes actually do continue and that some strong players, you know, there's this never waste a good crisis to get ahead. And the strong players actually can take advantage of the situation and move ahead even more aggressively on some of these programmes.

In terms of customer acceptance, I have little concern. I think people will go back to normal fairly quickly. And you already see that today the risk of and even the panic around the Coronavirus, is waning a little bit. It's a very severe crisis and people have to be very careful. But I am fully convinced that there will be a vaccine sooner rather than later. And people will fairly quickly forget the panic mode we're in today. On the other hand, if additional sanitary measures are needed in order to have public transport or carsharing back on the agenda, then I'm sure there are technological solutions to do so. Air filtering and other kinds of developments will also help to move back to where we were, albeit not exactly in the same way, perhaps. But this is not the first time there are serious epidemics, even in the 20th century. There have been several. The most well known was at the beginning of the century, just after the First World War. And we've all moved on and sort of forgotten about it after a while. So I think there’s bound to be a fundamental stop for these kinds of developments.

What I found interesting is that you said you first have to overcome the economic effect and the short-term impact of the Coronavirus crisis. As to autonomous driving, it seems to me that the big tech giants, the Googles, the Waymos, etc., are in competition with the automotive industry. Of course, the automotive industry now is hit very hard by close to zero car sales and lost production. Yeah, but the tech giants, they are probably not hit that much with maybe a little bit less advertising. So the Coronavirus crisis might put the tech giants in an even more powerful position compared with the OEMs. What do you think?

Well, I think that's a good point. And it's like the point I also made when I said never waste a good crisis. This is an opportunity for some that are either strong traditional players or even more so for people who are less impacted by the crisis. To push ahead and to make more progress and use this situation actually to push their position in this environment. And in fact, it's a bit, what you've also seen people like Tesla doing before. You need disruption from the outside to shake up the world. Because automotive eco system is a very rigid, old fashioned almost environment where really true innovation is very hard to get. And just looking at software, the conventional OEMs and Tier-one suppliers are struggle immensely with software. Whereas Tesla does, say, an upgrade every two weeks. They can push features in the car. They are more computing on wheels than a metal box with a bit of software inside. And you see there that it's the outside shaking up the traditional market here. So that might even accelerate.

Yeah. That was actually also something I was curious to hear from you, because you are active in so many different markets and automotive lines. I think one of the newest markets for Septentrio in 20 years that you exist. Is automotive really the most difficult market compared to the others?

Yeah, absolutely. And it is for a number of different reasons that I mentioned already:, rigidity, including in the supply chain, the layered structure, the very heavy formal processes that the car environment is very much -- at least the way I feel it is very much -- focused on incremental improvements, that there's a dominant design in fact has not changed maybe for one hundred years and it's been squeezed out to the maximum. It's really focused on very small, incremental steps to improve. I don't remember who it was but somebody said, you know, the light bulb was not invented as a result of continuous improvement of the candle. So I'm not saying continuous improvement is irrelevant because of course it is, but it is certainly a brake on innovation. And that makes it hard for people like us, new commerce with new technology and smaller companies to fit in that very rigid environment. There's a number of examples that I ran into recently. For instance, the one that you already mentioned, GPS, is known as an infotainment component in the car environment. That is a separate part of the automotive Tierone supplier and the OEM up to very high in the organization. When we spoke about GPS or GNSS to the self-driving people, they said, Oh, but GPS is managed by the other side of the company. The problem with that is twofold. First of all, it's hard to talk to the people who need to hear your story. But  also the concept that have is based on an old-fashioned idea of what GPS can do as defined in infotainment -- five-meter accurate and not very reliable. Certainly not a safety feature. So basically unusable. We've had people from the ADAS team saying that to us: Oh, we looked at GPS 10 years ago. It's not usable. That's a very typical result, even in that sort of innovation driven side. And that makes it hard. We see the same thing with the antennas, you know. All antennas are already decided you'll have to work with what we have now. But what you have is not suitable for what we're trying to do. Yeah. But somebody else decided you have to use that. So that is a very, very difficult part. The other part, of course, is that of the established relationships, it's very hard for a smaller company to break into those relationships. And the third part is the continuous improvement is extremely focused on cost reduction, price reduction, low price and very segmented in that sense. Then there is the cost --  the cost of the versus the cost of the solution gets lost in the fractioning of the solution to the different little elements there.

So it's a very hard market to get into. Harder than any of the other markets that we are in. That being said, it's also a very exciting market. We all have cars. They're all in our driveways. We all use them every day. They're amazing feats of technology to imagine what we do with cars, what they can do, how reliable they are. And so being part of that,  it's very exciting, but it's a very, very hard job. It therefore requires some naivety, I guess, to get in. And at the same time, the realism that you're running a marathon, not a sprint. And if you're not there for the long run and you don't have like Septentrio has, large variety of businesses that enable you to continue step by step if the only thing you do in trying to get into automotive is going to be very hard. And then the third element, I think that I also mentioned the very many established relationships. So it's extremely important to do work on the eco system, find partners. It's not something that you can easily just walk in as a loner and try to conquer that world. And so, yeah, it's an interesting but certainly not an easy place to be.

Yeah. Well, thanks. It's really an interesting meeting for me and it's good to hear this comment also because we are always in the automotive world every day and then you sometimes lose that broader perspective. So also the recommendations that you mentioned, I think are very useful for other companies that want to become active in automotive. I heard you saying it's a marathon. It's not a sprint and don't step into the automotive world without having a stronger backbone of other businesses or industries where you are active just to support the process that you will need to follow.

Certainly, certainly as companies that are like us technology oriented, that want to bring in a component that's really critical.

Yeah, great. Thanks a lot for your time. It was a real pleasure to have this talk with you again. Every time I speak to you I learn a lot. So it's the same today. We will see each other soon, hopefully also face to face again. But for now, I thank you and I wish you a pleasant day.

Thank you Ward for giving me the opportunity and speak to you.

Thanks. Bye bye.