SYNERGY BETWEEN MEDICINE AND TECHNOLOGYThe core health care science and research in medical sciences will have ever-increasing interface with technology areas. The future will not only be dominated by advances in life sciences but will witness the merging of entire technologies and medicine. This synergy is already happening and we should not be caught unawares. To meet these challenges, a new breed of medical professionals is required which will be conversant with the medical profession as well as the engineering profession, and who will be able to fuse together the medical sciences with the high -end technologies. On a number of occasions, this need to bring closer the scientists/ engineers and medical professionals has arisen for specific problems and for further advances in medical research and more effective health care.

Electronics for Medicine, commonly known as "E for M," was a pioneering company in medical electronics. Founded in the 1950s to make instrumentation for recording physiological signals from the heart, it was based in Westchester County, New York.

Its product line ultimately included instrumentation for all cardiac-related medical procedures, including electrocardiography, electrophysiology, echocardiography, and patient monitoring. Its DR and VR series physiological recorders were used in almost every cardiac catheterization laboratory from the 1950s well into the 1980s, and are widely mentioned in cardiology papers of that era.

In 1979, the company was sold to Honeywell, and its name was changed to E for M/Honeywell. It was later sold to PPG Industries, and disappeared a few years after that.

Sub disciplines within biomedical engineering

Biomedical engineering is a highly interdisciplinary field, influenced by (and overlapping with) various other engineering and medical fields. This often happens with newer disciplines, as they gradually emerge in their own right after evolving from special applications of extant disciplines. Due to this diversity, it is typical for a biomedical engineer to focus on a particular subfield or group of related subfields. There are many different taxonomic breakdowns within BME, as well as varying views about how best to organize them and manage any internal overlap; the main U.S. organization devoted to BME divides the major specialty areas as follows:[2]

Biomedical Electronics Biomechatronics Bioinstrumentation Biomaterials Biomechanics Bionics Cellular, Tissue, and Genetic Engineering Clinical Engineering Medical Imaging Orthopaedic Bioengineering Rehabilitation engineering Systems Physiology Bionanotechnology Neural Engineering

Sometimes, disciplines within BME are classified by their association(s) with other, more established engineering fields, which can include:

Chemical engineering - often associated with biochemical, cellular, molecular and tissue engineering, biomaterials, and biotransport.

Electrical engineering - often associated with bioelectrical and neural engineering, bioinstrumentation, biomedical imaging, and medical devices. This also tends to encompass Optics and Optical engineering - biomedical optics, imaging and related medical devices.

Mechanical engineering - often associated with biomechanics, biotransport, medical devices, and modeling of biological systems, like soft tissue mechanics.

Biotechnology and pharmaceuticals

Biotechnology (see also relatedly bioengineering) can be a somewhat ambiguous term, sometimes loosely used interchangeably with BME in general; however, it more typically denotes specific products which use "biological systems, living organisms, or derivatives thereof." [5] Even some complex "medical devices" (see below) can reasonably be deemed "biotechnology" depending on the degree to which such elements are central to their principle of operation. Biologics/Biopharmaceuticals (e.g., vaccines, stored blood product), genetic engineering, and various agricultural applications are some major classes of biotechnology.

Pharmaceuticals are related to biotechnology in two indirect ways: 1) certain major types (e.g. biologics) fall under both categories, and 2) together they essentially comprise the "non-medical-device" set of BME applications. (The "Device - Bio/Chemical" spectrum is an imperfect dichotomy, but one regulators often use, at least as a starting point.)

[edit] Tissue engineeringMain article: Tissue engineering

Tissue engineering is a major segment of Biotechnology.

One of the goals of tissue engineering is to create artificial organs (via biological material) for patients that need organ transplants. Biomedical engineers are currently researching methods of creating such organs. Researchers have grown solid jawbones [3] and tracheas from human stem cells towards this end. Several artificial urinary bladders actually have been grown in laboratories and transplanted successfully into human patients.[4] Bioartificial organs, which use both synthetic and biological components, are also a focus area in research, such as with hepatic assist devices that use liver cells within an artificial bioreactor construct.[5]

Micromass cultures of C3H-10T1/2 cells at varied oxygen tensions stained with Alcian blue.

[edit] Genetic Engineering

Genetic engineering, recombinant DNA technology, genetic modification/manipulation (GM) and gene splicing are terms that apply to the direct manipulation of an organism's genes.[1] Genetic engineering is different from traditional breeding, where the organism's genes are manipulated indirectly. Genetic engineering uses the techniques of molecular cloning and transformation to alter the structure and characteristics of genes directly. Genetic engineering techniques have found success in numerous applications. Some examples are in improving crop technology (not a medical application per se; see BioSystems Engineering), the manufacture of synthetic human insulin through the use of modified bacteria, the manufacture of erythropoietin in hamster ovary cells, and the production of new types of experimental mice such as the oncomouse (cancer mouse) for research.

[edit] Neural Engineering

Neural engineering (also known as Neuroengineering) is a discipline that uses engineering techniques to understand, repair, replace, or enhance neural systems. Neural engineers are uniquely qualified to solve design problems at the interface of living neural tissue and non-living constructs.

[edit] Pharmaceutical engineering

Pharmaceutical Engineering is sometimes regarded as a branch of biomedical engineering, and sometimes a branch of chemical engineering; in practice, it is very much a hybrid sub-discipline (as many BME fields are). Aside from those pharmaceutical products directly incorporating biological agents or materials, even developing chemical drugs is considered to require substantial BME knowledge due to the physiological interactions inherent to such products' usage. With the increasing prevalence of "combination products," the lines are now blurring among healthcare products such as drugs, biologics, and various types of devices.

[edit] Medical devicesMain articles: Medical devices, medical equipment, and Medical technology

This is an extremely broad category -- essentially covering all health care products that do not achieve their intended results through predominantly chemical (e.g., pharmaceuticals) or biological (e.g., vaccines) means, and do not involve metabolism.

A medical device is intended for use in:

the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease,

Two different models of the C-Leg prosthesis

Some examples include pacemakers, infusion pumps, the heart-lung machine, dialysis machines, artificial organs, implants, artificial limbs, corrective lenses, cochlear implants, ocular prosthetics, facial prosthetics, somato prosthetics, and dental implants.

Biomedical instrumentation amplifier schematic used in monitoring low voltage biological signals, an example of a biomedical engineering application of electronic engineering to electrophysiology.

Stereolithography is a practical example of medical modeling being used to create physical objects. Beyond modeling organs and the human body, emerging engineering techniques are also currently used in the research and development of new devices for innovative therapies, treatments, patient monitoring, and early diagnosis of complex diseases.

Medical devices are regulated and classified (in the US) as follows (see also Regulation):

1. Class I devices present minimal potential for harm to the user and are often simpler in design than Class II or Class III devices. Devices in this category include tongue depressors, bedpans, elastic bandages, examination gloves, and hand-held surgical instruments and other similar types of common equipment.

2. Class II devices are subject to special controls in addition to the general controls of Class I devices. Special controls may include special labeling requirements, mandatory performance standards, and postmarket surveillance. Devices in this class are typically non-invasive and include x-ray machines, PACS, powered wheelchairs, infusion pumps, and surgical drapes.

3. Class III devices generally require premarket approval (PMA) or premarket notification (510k), a scientific review to ensure the device's safety and effectiveness, in addition to the general controls of Class I. Examples include replacement heart valves, hip and knee joint implants,

silicone gel-filled breast implants, implanted cerebellar stimulators, implantable pacemaker pulse generators and endosseous (intra-bone) implants.

[edit] Medical imagingMain article: Medical imaging

Medical/biomedical imaging is a major segment of medical devices. This area deals with enabling clinicians to directly or indirectly "view" things not visible in plain sight (such as due to their size, and/or location). This can involve utilizing ultrasound, magnetism, UV, other radiology, and other means.

An MRI scan of a human head, an example of a biomedical engineering application of electrical engineering to diagnostic imaging. Click here to view an animated sequence of slices.

Imaging technologies are often essential to medical diagnosis, and are typically the most complex equipment found in a hospital including:

Fluoroscopy Magnetic resonance imaging (MRI) Nuclear medicine Positron emission tomography (PET) PET scans PET-CT scans Projection radiography such as X-rays and CT scans Tomography Ultrasound Optical microscopy Electron microscopy

[edit] Implants

An implant is a kind of medical device made to replace and act as a missing biological structure (as compared with a transplant, which indicates transplanted biomedical tissue). The surface of implants that contact the body might be made of a biomedical material such as titanium, silicone or apatite depending on what is the most functional. In some cases implants contain electronics e.g. artificial pacemaker and cochlear implants. Some implants are bioactive, such as subcutaneous drug delivery devices in the form of implantable pills or drug-eluting stents.

Artificial limbs: The right arm is an example of a prosthesis, and the left arm is an example of myoelectric control.

A prosthetic eye, an example of a biomedical engineering application of mechanical engineering and biocompatible materials to ophthalmology.

[edit] Clinical engineeringMain article: Clinical engineering

Clinical engineering is the branch of biomedical engineering dealing with the actual implementation of medical equipment and technologies in hospitals or other clinical settings. Major roles of clinical engineers include training and supervising biomedical equipment technicians (BMETs), selecting technological products/services and logistically managing their implementation, working with governmental regulators on inspections/audits, and serving as technological consultants for other hospital staff (e.g. physicians, administrators, I.T., etc.). Clinical engineers also advise and collaborate with medical device producers regarding prospective design improvements based on clinical experiences, as well as monitor the progression of the state-of-the-art so as to redirect procurement patterns accordingly.

Their inherent focus on practical implementation of technology has tended to keep them oriented more towards incremental-level redesigns and reconfigurations, as opposed to revolutionary research & development or ideas that would be many years from clinical adoption; however, there is a growing effort to expand this time-horizon over which clinical engineers can influence the trajectory of biomedical innovation. In their various roles, they form a "bridge" between the primary designers and the end-users, by combining the perspectives of being both 1) close to the point-of-use, while 2) trained in product and process engineering. Clinical Engineering departments will sometimes hire not just biomedical engineers, but also industrial/systems

engineers to help address operations research/optimization, human factors, cost analysis, etc. Also see safety engineering for a discussion of the procedures used to design safe systems.

Schematic representation of a normal ECG trace showing sinus rhythm; an example of widely-used clinical medical equipment (operates by applying electronic engineering to electrophysiology and medical diagnosis.

A point of reference for clinical engineers would be the catalogue published by The American Society for Hospital Engineering in the Hospital Engineering Reference Series called Maintenance Management for Medical Equipment

[edit] Regulatory issues

Regulatory issues are of particular concern to a biomedical engineer; it is among the most heavily-regulated fields of engineering, and practicing biomedical engineers must routinely consult and cooperate with regulatory law attorneys and other experts. The Food and Drug Administration (FDA) is the principal healthcare regulatory authority in the United States, having jurisdiction over medical devices, drugs, biologics, and combination products. The paramount objectives driving policy decisions by the FDA are safety and efficacy of healthcare products.[citation needed]

In addition, because biomedical engineers often develop devices and technologies for "consumer" use, such as physical therapy devices (which are also "medical" devices), these may also be governed in some respects by the Consumer Product Safety Commission. The greatest hurdles tend to be 510K "clearance" (typically for Class 2 devices) or pre-market "approval" (typically for drugs and class 3 devices).

Implants, such as artificial hip joints, are generally extensively regulated due to the invasive nature of such devices.

Most countries have their own particular mechanisms for regulation, with varying formulations and degrees of restrictiveness. In most European countries, more discretion rests with the prescribing doctor, while the regulations chiefly assure that the product operates as expected. In European Union nations, the national governments license certifying agencies, which are for-profit companies. Technical committees of engineers write recommendations which incorporate public comments, and these can be adopted as regulations by the European Union. These recommendations vary by the type of device, and specify tests for safety and efficacy. Once a prototype has passed the tests at a certification lab, and that model is being constructed under the control of a certified quality system, the device is entitled to bear a CE mark, indicating that the device is believed to be safe and reliable when used as directed.

The different regulatory arrangements sometimes result in particular technologies being developed first for either the U.S. or in Europe depending on the more favorable form of regulation. While nations often strive for substantive harmony to facilitate cross-national distribution, philosophical differences about the optimal extent of regulation can be a hindrance; more restrictive regulations seem appealing on an intuitive level, but critics decry the tradeoff cost in terms of slowing access to life-saving developments.

[edit] Training and certification

[edit] Education

Biomedical engineers require considerable knowledge of both engineering and biology, and typically have a Master's (M.S., M.S.E., or M.Eng.) or a Doctoral (Ph.D.) degree in BME or another branch of engineering with considerable potential for BME overlap. As interest in BME is increasing, many engineering colleges now have a Biomedical Engineering Department or Program, with offerings ranging from the undergraduate (B.S. or B.S.E.) to the doctoral levels. As noted above, biomedical engineering has only recently been emerging as its own discipline rather than a cross-disciplinary hybrid specialization of other disciplines; now, BME programs of study at all levels are becoming more widespread, including the Bachelor of Science in Biomedical Engineering which actually includes so much biological science content that many students use it as a "pre-med" major in preparation for medical school. The number of biomedical engineers is expected to rise as both a cause and effect of improvements in medical technology.[6]

In the U.S., an increasing number of undergraduate programs are also becoming recognized by ABET as accredited bioengineering/biomedical engineering programs. Over 65 programs are currently accredited by ABET.[7][8]

In Canada, an accredited graduate program in Biomedical Engineering is common in Universities such as McMaster University, and the first stand-alone undergraduate BME program is at Ryerson University offering a four year B.Eng program.[9][10][11]

As with many degrees, the reputation and ranking of a program may factor into the desirability of a degree holder for either employment or graduate admission. The reputation of many undergraduate degrees are also linked to the institution's graduate or research programs, which have some tangible factors for rating, such as research funding and volume, publications and citations. With BME specifically, the ranking of a university's hospital and medical school can also be a significant factor in the perceived prestige of its BME department/program.

Graduate education is a particularly important aspect in BME. While many engineering fields (such as mechanical or electrical engineering) do not need graduate-level training to obtain an entry-level job in their field, the majority of BME positions do prefer or even require them. [12]

Since most BME-related professions involve scientific research, such as in pharmaceutical and medical device development, graduate education is almost a requirement (as undergraduate degrees typically do not involve sufficient research training and experience). This can be either a Masters or Doctoral level degree; while in certain specialties a Ph.D. is notably more common than in others, it is hardly ever the majority (except in academia). In fact, the perceived need for some kind of graduate credential is so strong that some undergraduate BME programs will actively discourage students from majoring in BME without an expressed intention to also obtain a masters degree or apply to medical school afterwards.

Graduate programs in BME, like in other scientific fields, are highly varied, and particular programs may emphasize certain aspects within the field. They may also feature extensive collaborative efforts with programs in other fields (such as the University's Medical School or other engineering divisions), owing again to the interdisciplinary nature of BME. M.S. and Ph.D. programs will typically require applicants to have an undergraduate degree in BME, or another engineering discipline (plus certain life science coursework), or life science (plus certain engineering coursework).

Education in BME also varies greatly around the world. By virtue of its extensive biotechnology sector, its numerous major universities, and relatively few internal barriers, the U.S. has progressed a great deal in its development of BME education and training opportunities. Europe, which also has a large biotechnology sector and an impressive education system, has encountered trouble in creating uniform standards as the European community attempts to supplant some of the national jurisdictional barriers that still exist. Recently, initiatives such as BIOMEDEA have sprung up to develop BME-related education and professional standards. [13]

Other countries, such as Australia, are recognizing and moving to correct deficiencies in their BME education.[14] Also, as high technology endeavors are usually marks of developed nations, some areas of the world are prone to slower development in education, including in BME.

[edit] Licensure/CertificationSee also: Professional engineer

Engineering licensure in the US is largely optional, and rarely specified by branch/discipline. As with other learned professions, each state has certain (fairly similar) requirements for becoming licensed as a registered professional engineer (PE), but in practice such a license is not required to practice in the majority of situations (due to an exception known as the private industry exemption, which effectively applies to the vast majority of American engineers). This is notably not the case in many other countries, where a license is as legally necessary to practice engineering as it is for law or medicine.

Biomedical engineering is regulated in some countries, such as Australia, but registration is typically only recommended and not required.[15]

In the UK, mechanical engineers working in the areas of Medical Engineering, Bioengineering or Biomedical engineering can gain Chartered Engineer status through the Institution of Mechanical Engineers. The Institution also runs the Engineering in Medicine and Health Division.[16]

The Fundamentals of Engineering exam - the first (and more general) of two licensure examinations for most U.S. jurisdictions—does now cover biology (although technically not BME). For the second exam, called Part 2 or the Professional Engineering exam, candidates may select a particular engineering discipline's content to be tested on; there is currently not an option for BME with this, meaning that any biomedical engineers seeking a license must prepare to take this examination in another category (which does not affect the actual license, since most jurisdictions do not recognize discipline specialties anyway). However, the Biomedical Engineering Society (BMES) is, as of 2009, exploring the possibility of seeking to implement a BME-specific version of this exam to facilitate biomedical engineers pursuing licensure.

Beyond governmental registration, certain private-sector professional/industrial organizations also offer certifications with varying degrees of prominence. One such example is the Certified Clinical Engineer (CCE) certification for Clinical engineers

Automobiles

With the growth of on-board electronics in the automobile sector, from two-wheelers to tractors and heavy commercial vehicles, semi-conductor industry experts believe that in the immediate future, electronics will be the differentiator.

"Vehicle differentiation will be largely about electronics and so will the problems. In 2000, a car had 1 million lines of software code. By 2010, the estimate is that this will go to 50-100 million lines of code, when we will need to ensure zero defects in the software. As complexity increases, so will defects and this will have implications on the warranty, specially since software problems are hard to detect, making the problem more complex," warned Anup Sable, KPIT Cummins Infosystems Ltd.'s head of automotive and allied embedded and tools (Advanced Technology Solutions).

Indicating the seriousness of the issue, Mr Sable added, "If software companies have to provide mission critical software with zero defects for the automotive sector, a lot of them will go out of business." An estimate by a German auto magazine claims that electronics in vehicles are growing at a compounded annual rate of 8.1%. This is proving to be a challenge to the semiconductor industry, which has to provide cost competitive components.

Pointing to the convergence of consumer electronics and automotive infotainment systems, Wind River India's head of engineering, Praful Joshi said the shorter development cycles of the consumer electronics industry would affect the latter. Wind River is a device software optimisation company, whose solutions enable companies to develop, run and manage device software reliably.

"We are focusing on the new area of in-vehicle devices, which is greatly influenced by consumer electronics. For the future, cars will be fully connected, with an open standard based operating system.

That is when convergence with the automotive world will happen," Mr Joshi said. He was speaking at a seminar on India's role in automotive electronics. Globally, Wind River will launch its Moblin.org solution, for which it is collaborating with Intel. The aim is to acclerate mobile internet devices, and Moblin is an extensible Linux-based platform for these devices.

Another driver for the increase in on-board electronics will be regulatory, Rashmi Urdhwareshe, deputy director, Automotive Research Association of India (ARAI), remarked. She pointed to the linkages between industry developments and the evolution of the regulatory framework for motor vehicles, from the simple requirement of a vehicle needing to be road worthy, in the 1970s, when there were few players, to 2000, when emission and safety norms have been addressed in the regulations.

Pointing out that the solutions developed in other country markets may not work in India due to cost reasons, Shubhangi Chiplonkar, deputy general manager (R&D ), Bajaj Auto, said Indian OEMs need to have a commanding position in the deployment of electronics, if they are to remain competitive. She suggested Indian manufacturers should vertically integrate electronics products in a cost competitive manner.

In the study, the experts analyzed also other factors that affect the industry directly like their end-users. They include also in their studies body and chassis, central command, telematics, power train, engine control, safety and security, and driver relevant information. The main thing that the study shows is that more and more electronics are being used on automobiles which increased the demand for ASIC, ASSP, and FPGAs.

Today's vehicles are becoming more and more reliant on electronic components. Different systems of a vehicle that are being developed and produced today are equipped with electronic systems which aid the mechanical parts in performing effectively. Fuel injection systems for cars rely on electronic components to provide the engine with the right amount of fuel. Likewise, safety systems also rely heavily on electronic circuits to provide optimum safety to the occupants of a car in the event of a crash. Braking systems also depend on electronic components like the anti-lock braking system (ABS). Without the aid of electronic components, even high quality parts like brake components from EBC Active Brakes Direct will not perform to the best of their capabilities.

The automobile specific integrated circuit (ASIC), application specific standard products (ASSPs), and the field programmable gate arrays (FPGAs) markets have been achieving much success, thanks to the needs for the said products in the automotive industry. The increase in the number of consumers means that the demand for the said electronic parts will also rise. Other factors that made the need for electronic parts are government pollution mandates, safety and security regulations, and the oil crisis. The use of electronic components also reduces manufacturing costs since human errors are very much avoided.

In the automotive industry, the introduction of luxury features also increased the need for specialized electronic components. The popularity of hybrid vehicles like the popular Toyota Prius also made the demand increase. Electronic components are needed on hybrid vehicles to facilitate the smooth change of power from engine to electric motor muscle. Other mandatory safety systems also need electronic components. Electronic stability systems rely on electronics to keep the car stable especially while cornering. Suspension systems also depends on electronics as shown by electronically controlled independent suspension systems employed by the latest mass produced vehicles.

Due to the increase in the demand of such, the industry is expected to generate considerable revenues especially in the European region's market where the industry is doing a very good business. While Europe may be the leading region in terms of production of ASICs, ASSPs, and FPGAs, Asian countries are joining the bandwagon. The region has become the fastest growing segments due to the increasing automobile sales in the said area.

While the industry may be enjoying much success, they still have to come up with more world class electronic design automation software tools to provide better service to their end users. Fierce competition is also expected since there are companies that are already established which will make it hard for smaller enterprises to break into the market and stake their claims in a share in the growing market. The analysts said that there is a possibility that the large and established companies will acquire smaller companies to increase their productivity. Analysts further said that the market for electronic components will grow dramatically as the technology used in cars will likely advance in the future.

Use of Electronics in Automobile Industry

Automobile is one of the fastest growing sectors in the world. With the growth of industry, there is also a growing requirement for environment protection and demand from the customers for greater fuel efficiency, security and safety. With the advances in technology and electronics, automobile manufacturers are able to offer a wide variety of services and conveniences with which many new automobile owners are satisfied. Use of electronics in the automobiles improved the safety and convenience of the owners. Usage of electronics also increases the luxury and comfort to the riders.

The cars manufactured presently contain more than 1000 electronic components because many manufacturers rely on electronic components for fuel injection systems for cars to provide the engine with right amount of fuel. Safety systems also depend on electronic circuits to provide maximum safety to the occupants of a car in the events of a crash. Braking systems also depend on electronic component like the anti-lock braking system (ABS) and also introduction of luxury features increased the need for specialized electronic components.

Dashboard gives the indication of fuel level, the speed, the tachometer and oil level, neutral state of car and more. These all functions are done by the computer diagnostics that are used in the body of the car and which displays on analog and digital meter.

ECU (Engine Control Unit) have following electronic components to increase the fuel efficiency of a car,

Pressure Sensor

Throttle Position Sensor

Oxygen Sensor

Fuel Injector and more

The automobile specific integrated circuit (ASIC), field programmable gate arrays (FPGAs) and application specific standard products (ASSPs) markets have been achieving much success, because of the usage of above said products in the automotive industry.

The industry has to come up with more world class electronic design automation software tools to provide better service to their end users.

Oliver Wyman study on auto electronics

Electronics are driving the development of theautomobile industry• Strong growth in all segments of auto electronics• Electronics innovations are being developed mainly by automotivesuppliers• Cooperation ventures and the standardization of auto electronicswill be increasingly important in the future• Electronics suppliers need to develop a better understanding ofend users• Mechatronic components can differentiate suppliers from theircompetitorsMunich, December 14, 2006 – Electronics are the main driver of nearly all new functions inautomobiles. The worldwide market for automobile electrical systems and electronics isexpected to grow at a rate of 5.9% per year, reaching 230 billion euros by the year 2015 and ultimately representing more than 30% of the automobile’s value. Demand is strongest for those electronic functions that benefit drivers directly: safety, entertainment, information and comfort. These are the results of the Oliver Wyman study on auto electronics, which examined the major trends in the field of auto electronics and the consequences for automotive suppliers. The electronics architectures and standards that are currently being contemplated represent a major challenge for the industry. No one knows how and when that will happen. The Oliver Wyman study recommends greater cooperation among suppliers.

Due to excess production capacities around the world and the rising competition fromdeveloping countries, cost pressures are bound to increase in the automotive supplierindustry. Thus, successful strategies involve cost reduction measures, but also ways toavoid cost pressures. The Oliver Wyman study also found that suppliers of automotiveelectronics should increase their understanding of the needs of end users, in order to better estimate the future order volumes for new functions and special features, but also to develop and market products that consumers will like. Finally, mechatronic components represent a good way for automotive suppliers to differentiate themselves from their competitors.

Engine, brakes, radio and air conditioning: There is hardly a function in today’s automobile that does not rely on electronic control systems. And the proportion of an automobile’s value represented by electrical systems and electronics will continue to grow in the future. Today, electrical and electronic components and software make up 20% of an automobile’s value, on average, on a worldwide basis. By the year 2015, this proportion will grow to more than 30%, according to the study on auto electronics. Because the number of autos produced in this period is expected to grow at a rate of only 1.5% per year, automotive suppliers will have to rely on electronics to boost their sales. Already today, suppliers of auto electronics are considerably more profitable than the average automobile manufacturer. While the industry as a whole generates a gross profit margin of 4% of sales, the operating profit margin of electronics suppliers is frequently higher than 7%. And champions like Gentex, the specialist for auto-dimming mirrors, and the infotainment producer Harman Int. enjoy considerably higher profit

margins. “Thanks to the constant flow of innovations in automobiles, auto electronics will continue to enjoy above-average growth rates and solid profit margins in the future,” says Dr. Guido Hertel, the Oliver Wyman automobile expert who authored the study.Above-average growth for electronics applicationsIn total, the worldwide market for automotive electrical systems and electronics can be expected to grow at a rate of 5.9% per year until 2015 – in particular because the applications now being used in premium models will spread to the lower-end market segments. But we can also expect to see innovative new features as well. The strongest growth will be experienced in the area of electronics for the car interior: According to the Oliver Wyman study, such applications could see growth rates of 7% per year. “Car interior” refers mainly to Infotainment applications, displays and various comfort functions. In the future, navigation systems will be able not only to recognize the route, but also to take factors such as traffic jams, work sites and road signs into account. Growth rates of close to 6% can be expected in the chassis and car body segments. In these areas, electronics applications like active suspension systems, ABS, ESP and adaptive steering, intelligent headlights, active safety and driver assistance systems are leading the way. The systems used in the chassis and car body increase comfort and enhance safety. Before long, cars will be able to park themselves. Lane recognition systems will keep the automobile in its lane and even help with changing lanes. Also, stop-and-go systems will enable the car to automatically follow the car in front of it in slow traffic situations. Even in areas like drive trains, engine control, electrical systems and on-board networks, electronics applications are expected to grow at rates of 4.9% to 5.5%, much faster than the rest of the auto industry. The main driver in these areas is the trend towards fuel-saving, more eco-friendly drive systems, including hybrid technology in particular. The additional electric drive in hybrid autos requires numerous new electrical and electronic components.Coming to a better understanding of end user needsInnovations in hardware and software are driving progress in the auto industry. These days, most new functions would not be possible without electronics. More than two thirds of all innovations have been made possible or were at least significantly influenced by electronics. Electronics suppliers also conduct most of the necessary research and development in this area. In 2005, automotive suppliers on average spent a sum equivalent to 4.3% of their sales on R&D expenditures, while many electronics suppliers spent a sum equivalent to more than 8% of their sales on R&D. Many new functions, including electrically adjustable seats and headlights that automatically adjust to the driving direction, were initially available only as special features. More than half the special features of an upper mid-range automobile are influenced by electronics and the trend is rising. However, the diversity of functions created by electronics also requires automotive suppliers to take a closer look at the needs of end users. Precisely those suppliers which conduct a majority of the research and development activities and often have no direct access to customers must become more active in this regard. “Many German suppliers hold a worldwide leadership position in the area of electronics innovations. In the future, however, innovations will require a more thorough understanding of end users. In this regard, electronics suppliers need to increase their understanding of end users in order to better master their unit sales risk,” Hertel said. Aside from those electronics functions that are originated by automobile makers and suppliers, another important source of electronics applications has nothing to do with car making in the traditional sense. The new developments in consumer electronics, Internet applications and communications technology, which are increasingly changing our day-to-day lives, are also finding their way into automobiles. I-pods, WLAN and electronic toll collection systems are only a few examples. Besides increasing the diversity of functions, these applications also give rise to new challenges for the technical integration and maintenance of these systems in the automobile. Europe and Japan will continue to lead the automotive electronics markets in the coming years. But the Asian market will become increasingly more important. In China, the strong growth in electronics generally (PCs, consumer electronics, semiconductors, etc.) and the strong interest in automotive technology will give a powerful boost to the development of automotive electronics. So far, the established suppliers are still dominant. But new suppliers from this region can be expected to emerge in the next few years. “Consequently, most producers of auto electronics simply must have

a presence in Asia. But they should also be prepared for the emergence of Asian competitors in the medium-term future,” Hertel commented.Rising importance of standardization and cooperation venturesA key issue in the automotive supplier industry today is the future standardization of auto electronics architectures. In the last 20 years, auto electronics have grown from one system to the next. That led to massive quality problems, due to the diversity and complexity of functions. However, the turning point came in the last one to two years. Many new car models – especially those of German manufacturers – perform very well when it comes to reliability. But the existing architectures are coming up against their limits. These days, even small cars have up to 20 control devices, while upper-range cars have up to 70. These systems control the engine, balance the shock absorbers, operate car windows and keep the interior temperature constant, among other things. Most of the experts interviewed by Oliver Wyman as part of the study believe that the number of control devices can be reduced almost by half in the next few years.A number of standardization initiatives, like AUTOSAR in the area of automotive software, arecurrently in the process of developing the foundations for uniform interfaces and softwarearchitectures. The auto makers are betting that such standards will result in a lower degree ofdevelopment redundancy, higher quality and more innovations. In the past, those standardization efforts that promised direct benefits to automobile users, and therefore had better sales chances, were more successful. New markets like hybrid technology and driver assistance systems promise to generate additional benefits for customers, but also require strict cost management in order to be successful. And cost management can be improved through cooperation ventures and standardization. “These are the markets of the future, in which everyone wants to participate,” said Hertel. And yet, those standardization initiatives or cooperation ventures which are focused exclusively on cost reduction are considerably less likely to succeed. The steady march of electronics applications into automobiles gives automotive suppliers and manufacturers the chance to transform the automobile from a mass-market product to a more individualized product. For example, the engine function, suspension, transmission, air conditioning and heating, seating position and information can be customized to suit individual preferences. In reality, however, those functions which do not require settings and operation are the most successful. Between these two extremes will be found a large number of business models, from the “new” systems supplier to mechatronics specialists and various software business models. But not every one of these business models will succeed. “The key is to correctly understand the end user, and to develop innovations and an appropriate business model on that basis,” Hertel said. Strategic requirements for electronics suppliers

Mastering the complexity: The growing degree of networking among the different electronicsystems means that the complexity of such systems will continue to rise. To master this complexity and to utilize the same components for more than one function, automotive suppliers will have to cooperate with each other to a greater degree. Electronics suppliers that manage to solve overarching problems and apply a networking mentality will enjoy a competitive edge in the coming years. Increasingly, auto manufacturers will be looking for systems suppliers who can take care of some of the tasks they were formerly used to performing.Persistent cost pressure: In the future as well, system decisions will be made primarily on thebasis of costs. Even for high-tech products, Western suppliers will face rising competition from lowwage countries. That means they must continue to use the full range of cost reduction instruments, including the possibilities of standardization, outsourcing and offshoring. However, the sharing of development activities makes sense only for very large automotive suppliers.Customer-oriented electronics functions: New extras will continue to influence the positioning of future car models and generate profit margins that are well-above average. The success of new functions will be decided primarily at the human-automobile interface. New functions should not overwhelm the driver, but make it easier to operate the automobile. In the past, too many new functions were driven by technology alone, and were not adequately motivated by customer needs.

Mechatronic components: Sensible combinations of electronic and mechanical components not only save space, but can also lead to new functions and improve the cost position. They pose an important barrier against the competition. Mechatronic components require more sophisticated skills both in development and in production and therefore the manufacturers of mechatronic components can differentiate themselves better from the competition.

Four key tasks for auto electronics suppliersFocus on the end userThe development of new features is still being driven more by technical feasibility than bycustomers’ needs. Those who can correctly interpret the customers’ needs will be able to designproducts that set them apart from their competitors. They will also be able to better gauge the future order volumes for special features.Achieve differentiation through mechatronicsTo date, a clear trend towards purely electronic components has not been observed. That isbecause many electronic functions can be usefully combined with mechanical components. Byintegrating these two types of components to form a complete system, automotive suppliers can set themselves apart from their competitors.Pay close attention to the development of standards and automotive architecturesNo supplier can escape the trend towards standardization and new architectures. At the moment, however, it is impossible to tell what standards will be established, at what time and in what way Quick decisions can be expected only in those areas in which new end user benefits can be created. For automotive suppliers, it will be very important to achieve an advantageous positioning within the changing world of automotive architectures, at an early stage of development.Keep costs under controlAutomotive suppliers from emerging markets are quickly catching up to established suppliers. In the coming years, electronics suppliers from Asia will intensify the cost pressure on the industry even more. Therefore, Western manufacturers will have to master the full range of cost reduction instruments.