Council on Future Mobility & Electrification - 2021 REPORT - Michigan ...

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Council on Future Mobility & Electrification - 2021 REPORT - Michigan ...
Part 03   Actions of the Council/Policy Recommendations

Council on
Future Mobility
& Electrification

2021 REPORT

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Council on Future Mobility & Electrification - 2021 REPORT - Michigan ...
Part 03   Actions of the Council/Policy Recommendations

Contents

PART 01   Executive Summary                                        05

PART 02   Introduction                                             07

PART 03   Actions of the Council –                                09
          Policy Recommendations

          i.    Automated vehicle and smart                        10
                infrastructure technologies
          ii. Economic development                                 15
          iii. Talent and workforce                               25
          iv. Electrification                                     32
          v. Insurance, regulations, and                          45
             public safety

PART 04   Status of MI’s Mobility and                             51
          Electrification Industry
          and Non-State Mobility Assets

PART 05   Status of MI’s Government/                               60
          Public Mobility and
          Electrification Assets

PART 06   Public Policy Review                                     66
          Comparative Analysis Update

PART 07   Appendix 1 – CFME Process Overview                       67

PART 08   References                                               69

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Council on Future Mobility & Electrification - 2021 REPORT - Michigan ...
Foreword by
                                         the Lt. Governor

Back in 1985, when Robert Zemeckis’ Back to the Future first appeared on the big screen, the
notion of flying cars and hoverboards seemed impossible. That was a concept that could only be
experienced in movies. Now 36 years later, mobility, public transportation, and vehicle electrification
have come further than ever imagined, but we are still waiting on a flying Delorean.

When I started serving as the Lieutenant Governor      and scale-up of emerging technologies and
of Michigan back in 2019, I lived in the heart of      businesses.
Detroit and didn’t have a car. That might be a first
in Michigan politics. I understand firsthand what it   Governor Whitmer and I want to develop and
means to rely on public transportation. My story is    attract the skills and talent necessary to meet the
like that of many Michiganders who are dependent       changing demands of the mobility sector. This is a
on public transport to get to work, buy groceries or   challenge that Michiganders are ready to meet.
attend medical appointments.                           After all, Detroit put the world on wheels. Now it’s
Governor Whitmer and I are committed to building       time for us to be the leader in clean transportation,
a more robust state economy through safer,             and we are ready. The Council on Future Mobility
more equitable, and environmentally conscious          and Electrification is another example of how
transportation for all Michigan residents. Now         we’re fighting to build a stronger, more sustainable
more than ever, it is critical that Michigan           future for our kids and for future generations of
strengthen opportunities for economic growth           Michiganders to come.
and job creation while securing our continued          The following report from the Council on
leadership in mobility and electrification through     Future Mobility and Electrification will show the
forward-thinking policies, innovative partnerships,    progress we have made and what is next. As the
and smarter infrastructure.                            future continues to evolve, so will the Whitmer
In July of 2021, Governor Whitmer announced            Administration.
the formal launch of the Office of Future Mobility
and Electrification. This office is focused on
working across state government, academia, and
private industry to enhance Michigan’s mobility        Lt. Governor
ecosystem, including dynamic mobility and              Garlin Gilchrist II
electrification policies and supporting the startup
Council on Future Mobility & Electrification - 2021 REPORT - Michigan ...
Message from
                                    the Chairwoman
                                    Michigan has long been the world leader in the mobility sector, and
                                    we are committed to doing whatever it takes to maintain our state’s
                                    position at the forefront.

The Council on Future Mobility and                      July that set a target for all new vehicle sales to be
Electrification (CMFE) has developed public             electric by 2030.
policy recommendations that will help maintain
Michigan’s leadership in advanced mobility and          This signifies the creation of new jobs and the need
electrification, and I am proud to serve as the Chair   for highly-skilled workers. The CFME’s February
of the CFME as it releases its second report.           2020 report noted that the demand for computer-
                                                        related engineers, for example, will eclipse 45,000
The public policy recommendations included in           nationally by 2030. Additionally, estimates from
this report were designed, debated and chosen           the USDOE regarding job creation in the utility
because of the significance they will play in           sector deploying charging infrastructure will reach
ensuring Michigan remains the global epicenter          105,000 by 2030.
for next generation automated, connected, shared
and electric mobility. It is imperative that state      These are exciting times in both Michigan and the
policymakers see these recommendations through          mobility and electrification industry in general, and
to implementation.                                      I am anxious to see what the future holds for our
                                                        great state.
The report’s primary findings stress how Michigan
must continue its leadership in automated vehicle       Edsel Ford, the son of legendary automotive
policies and smart infrastructure deployment, while     pioneer Henry Ford, once said, “There are
also investing in economic and talent development.      no crown princes at Ford.” Edsel earned his
Similarly, Michigan must also become more EV-           position and built his own reputation every day by
friendly and better prepared for the future of          continuously developing the next best vehicle.
electric vehicles.                                      We do not take our automotive heritage for granted,
The CFME’s industry experts and public leaders          and we plan on working hard to keep Michigan at
also believe Michigan will take a bold step             the forefront of innovative mobility.
forward and continue embracing the mobility and
electrification sector, if the findings in the report
are acted upon.
                                                        Susan R. Corbin
The publication of this report comes at a time
of great advancement in the mobility world. The         Director, Michigan Department of
Biden Administration announced new grants for           Labor and Economic Opportunity;
deploying EV charging stations in April 2021, which     Chairwoman, Michigan Council on
was then followed closely by an Executive Order in      Future Mobility and Electrification
Council on Future Mobility & Electrification - 2021 REPORT - Michigan ...
Part 01   Executive Summary

Executive Summary

The Council on Future Mobility and Electrification (CFME) has previously indicated 2030 as a
year of demarcation. Over the next decade vehicle electrification will occur and become the
dominant propulsion system on the market, advanced automated vehicle technologies and smarter
infrastructure will become a more common part of the mobility experience, and the most valuable
part of a new vehicle will change from hardware to software. Likewise, workforce demands will grow
and shift, as will other inputs for the manufacturing process, and the need for high-tech talent will
exceed what current development pipelines can produce.

Luckily, Michigan currently enjoys the availability
of resources necessary to not just plan for these
future changes, but to help shape and benefit
from them. If the recommendations included in
this report are acted on, the industry experts and
public leaders who make up the CFME believe
Michigan will take a bold step forward and plant
our state flag further than any other along the
road embracing the mobility and electrification
sector. Ignoring these recommendations on the
other hand will leave our state far behind our
competition and likely unable to catch up given
the one-time nature of so many of the resources
available to states today.

This report’s recommendations center around
how Michigan must continue its leadership
in automated vehicle policies and smart
infrastructure deployment, invest in ourselves
and mobility sector economic and talent
development, become more EV-friendly and
better prepared for electric vehicles, and
implement policies that will ensure the future
of transportation is safe and enhances mobility
solutions for more Michiganders.

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Council on Future Mobility & Electrification - 2021 REPORT - Michigan ...
Part 01   Executive Summary

This all begins with developing a
comprehensive and cohesive state
mobility and electrification strategy.

With such a North Star guiding the state’s actions        and resiliency of startup firms and make them
we can be assured that not only are state agencies        more attractive for private capital investments.
all traveling in the same direction, but that the         Supporting the adoption of electric vehicles and
state and industry are in lockstep. Other proposals       the deployment of EV charging infrastructure
included in this report are needed to open up             is also a must in the Council’s view. While more
new mobility solutions provided by technological          study is required to develop efficient, targeted
advancements to more Michiganders, like                   consumer incentives for the electric vehicles
streamlining shared transportation systems                themselves, the merits of incentives for charging
and adapting antiquated policies regarding the            infrastructure is well documented, easily replicated,
physical and mental abilities of vehicle operators        and ready to be implemented with funding. The
for the automated vehicle future. The Council             Council also strongly suggests establishing
also sees a clear need for not just significant           clear guardrails around the cybersecurity of
but impressive investments in the future of auto          intelligent transportation systems so as to protect
related manufacturing, mobility tech startups             the safety of Michigan residents and visitors.
and associated venture capital, and talent and            Lastly, if Michigan truly is to be the mobility and
workforce development. To remain competitive              electrification leader amongst its peers, the state
for the automotive industry’s future growth               should act as such in terms of being an advocate
opportunities the state must be able to offer more        on federal policies, beginning with issues related to
and better site selections, prove it has a plan for       connected vehicle communications, transportation
building out the capacity of Michigan’s talent            standards, and mobility incentives.
pipeline, and offer supports to increase the number

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Council on Future Mobility & Electrification - 2021 REPORT - Michigan ...
Part 02   Introduction

Introduction

The Michigan Council on Future Mobility and Electrification (CFME) was established by
executive order 2020-02, and charged with providing state policymakers on an annual basis with
“recommendations regarding changes in state policy to ensure Michigan continues to be the
world leader in future mobility and electrification, including autonomous and connected vehicle
technology, electric powertrain technology and charging infrastructure, and diverse mobility such as
shared and transit.”

The CFME does this with the support of                    To reiterate from the previous report, the themes
the Michigan Office on Future Mobility and                for the major hurdles to maintaining global mobility
Electrification (OFME), led by Michigan’s Chief           and electrification leadership that the CFME
Mobility Officer Trevor Pawl, under the direction         recognizes are on Michigan’s horizon include:
of the Department of Labor and Economic
Opportunity’s Director Susan Corbin.                      • a need to adapt and persist against ever
                                                            increasing pressure of global competition for
As explained in the CFME’s last report,                     the future of automotive mobility technologies’
the COVID-19 pandemic had delayed the                       research, development, and manufacturing;
start for development of these initial policy
recommendations. This council’s last report was           • preservation of Michigan’s current lead in terms
published with a consensus outlook from CFME                of future mobility asset concentration and
membership about the value of Michigan’s next               progressive advanced mobility governmental
generation mobility and electrification assets              approaches and public policies;
and identifiable future obstacles to the state’s          • a need to expand Michigan’s lead in terms of
global leadership in this crucial economic sector.          available automobility advanced talent and skilled
Through the dedication and hard work of CFME                labor;
members and many of Michigan’s mobility and
electrification partners some additional issues           • making Michigan’s ecosystem for private sector
were identified, and the policy recommendations             investments in the mobility and electrification
included in this report were developed. The goal            sector more attractive to investors; and
for these policy recommendations is to build off
                                                          • continuing to ensure and discover new ways that
the strong presence of the advanced mobility and
                                                            the future of advanced and electrified mobility
electrification sector already in Michigan, and
                                                            will help diversify and strengthen Michigan’s
prepare for the future.
                                                            economy and grow good-paying jobs.

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Council on Future Mobility & Electrification - 2021 REPORT - Michigan ...
Part 02   Introduction

                                                   During the CFME’s process developing the policy
 VOTING
                                                   recommendations contained in this report, some
                                                   additional themes for opportunities were identified
State Entities                                     and deemed imperative to Michigan’s mobility
                                                   leadership. First, the investments made and proposed
Susan Corbin, LEO
                                                   by the federal government under the American
Paul Ajegba, MDOT
                                                   Rescue Plan, the American Jobs Plan, and other
Anita Fox, DIFS
                                                   federal legislation are too great to ignore. Michigan
Col. James Gasper, MSP
                                                   must take swift action on the deployment of and
Rachael Eubanks, Treasury
                                                   planning for these resources so as to not lose our
Liesl Clark, EGLE
                                                   future mobility and electrification leadership, be
Tremaine Phillips, MPSC
                                                   better positioned to maximize the state’s draw down
                                                   of additional federal resources, and develop leapfrog
Non-State Entities
                                                   moments and projects that will catapult the state’s
Bob Babik, GM                                      mobility industry into an even greater leadership
Emily Frascaroli, Ford                             position. Second, is a recognition that the advanced
Steven Bartoli, Stellantis                         mobility and electrification sector currently enjoys
Patrick Cadariu, Waymo                             being at the center of gravity of three important
Derek Caveney, Toyota                              elements of policy agendas shared by both the federal
Chris Nevers, Rivian                               and state governments: pandemic economic recovery,
Cory Connolly, EIBC                                combating and adapting to climate change, and
Jeffrey Dokho, UAW                                 infrastructure investments. This is a unique situation
Dr. Huei Peng, U of M                              that is not likely to exist for long and Michigan would
Dr. Satish Udpa, MSU                               be wise to leverage this opportunity to its fullest extent
                                                   while possible.
 NON-VOTING                                        To tackle the daunting task of determining achievable
                                                   policy recommendations which would further
                                                   Michigan’s mobility and electrification leadership
Legislators
                                                   and fit the aforementioned themes, the Council on
Sen. Ken Horn, Senate Majority                     Future Mobility and Electrification divided into four
Sen. Mallory McMorrow, Senate Minority             workgroups: Electrification; Insurance, Regulations,
Rep. Jim Lilly, House Majority                     and Public Safety; Economic and Workforce
Rep. Ranjeev Puri, House Minority                  Development; and Automated Vehicle Technologies
                                                   and Smart Infrastructure. Each workgroup was
Senior Advisors                                    assigned a neutral, outside Senior Advisor with
                                                   particular expertise to guide the policy process. The
Alisyn Malek, SAFE                                 workgroups were made up of Council members, as
Carla Bailo, CAR                                   well as relevant outside stakeholders (see Appendix 1
Reuben Sarkar, ACM                                 to learn more about the CFME’s workgroup process).
John Peracchio, CFME Chairman Emeritus

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Council on Future Mobility & Electrification - 2021 REPORT - Michigan ...
Actions of the Council/
Policy Recommendations

Since the Council on Future Mobility and Electrification issued its last report in February 2021, there
has been a monumental change in the importance of electric vehicles and charging infrastructure.

The federal government is assessing and                 while enhancing grid resiliency and supporting job
addressing gaps in auto manufacturing supply            growth in the energy sector.
chains; investing in a national EV charging network;
and has set a national goal for EV adoption. In July    Because advanced mobility and electrification
2021, President Biden signed an Executive Order         issues sit at the intersection of the significant
setting a target that half of all new vehicle sales     federal and state policy initiatives of economic
will be electric by 2030. These changes not only        growth and job creation, infrastructure rebuilding
highlight the importance of work being done by          and upgrading, and addressing climate change,
CFME and OFME, but create new opportunities for         there is an opportunity at hand to further
Michigan to leverage the strength of its automobility   Michigan’s mobility leadership in these spaces with
sector to further the state’s leadership and secure     more resources available than ever before. The
jobs for the next generation of electric vehicle and    CFME firmly views this opportunity as one that the
charging infrastructure manufacturing, strengthen       state of Michigan cannot pass up if global mobility
our state economy through diversification into          and electrification leadership is to be maintained.
more high-tech industries that are the emerging         With these opportunities in mind, the product of the
profit pools in automotive products, provide            CFME’s policy development process and resulting
attractive employment opportunities for a highly        recommendations are broken down by workgroup
talented workforce, and achieve climate goals           topics as follows.
Council on Future Mobility & Electrification - 2021 REPORT - Michigan ...
Part 03   Actions of the Council/Policy Recommendations

AUTOMATED VEHICLE TECHNOLOGIES AND SMART INFRASTRUCTURE

In its early meetings the CFME workgroup                     mobility strategy and vision plan. Such a
covering automated vehicle technologies and                  strategy would provide state agencies better
smart infrastructure surveyed and researched                 direction for their mobility and electrification
other sets of public policies and determined that            efforts and establish goals and metrics required
Michigan’s automated vehicle (AV) and smart                  to keep the state on track. The $1.5 million
infrastructure laws from 2016 are still among the            proposed in Governor Whitmer’s FY’22 budget
most cutting edge in the world and still strongly            recommendation would support this work product,
support development of the advanced mobility                 ensure it is coordinated with other state agencies’
sector. However, other states have begun to adopt            strategic plans, and utilized to keep all of state
Michigan’s original policies and the Great Lakes             government on track and sharing in the mission of
state no longer enjoys a convincing lead in this             continuing Michigan’s mobility and electrification
area. Furthermore, other states’ laws benefited              leadership.
from both being developed after industry had
settled on some common terminology and                       Adopt the leading and most common AV
definitional meanings and being able to incorporate          standards and continue to survey and evaluate
modern advancements in AV technologies.                      other states’ and trade associations’ model AV
                                                             laws
The workgroup determined that to remain the
premier state for researching, developing, testing,          The CFME recommends that the legislature
commercializing, and deploying AV tech and smart             update the taxonomy of the Michigan Vehicle Code
infrastructure, Michigan must keep its AV statutes           (Public Act 332 of 2016) to adopt terms which have
up to date, develop a state strategy to plot a course        become commonly accepted or industry standards
for the future, and invest ample resources in the            since the Michigan laws on AVs were enacted in
state agencies focused on advanced mobility                  2016. Certain terms, such as “personal delivery
and developing that strategy. To remain a global             device” have become widely used elsewhere.
future mobility leader, Michigan must also build             Other terms, like “automated mode” have been
off its strength of forward-looking public policies          replaced by different terminology. The Michigan
by implementing new policies to facilitate the               Vehicle Code should be amended accordingly to
next generation of smart infrastructure and                  provide consistency with other states and federal
AV technologies being developed in the state.                authorities and ease discussions with industry and
Additionally, it was noted that many AV and smart            research partners.
infrastructure policies are shifting focus from the          The Automated Vehicle Technologies and
states to the federal government, and Michigan               Smart Infrastructure work group discussed 14
should embrace federal policymakers’ interest and            specific recommendations of the AV Roadmap
be the leader of state perspectives on these issues.         proposed by the Alliance for Automotive
Resource a cohesive Michigan Mobility Strategy               Innovation. Michigan already complies with 11
                                                             recommendations for leading states. One of the
There is a need for Michigan’s Office of Future              remaining recommendations is to refrain from
Mobility and Electrification to develop a cohesive           adding equipment standards at the state level, but

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Part 03   Actions of the Council/Policy Recommendations

to reserve those for federal attention. The Alliance        system installations, it will mean direct funding of
cited a provision for data recording which applies          infrastructure. Other funding could bring more state
only to SAVE project vehicles, as described in MCL          engineers and planners to help more developers
257.665b, providing on-demand automated fleet               and testers. The CFME is not able to recommend a
transportation.                                             specific value for funding, but desired policymakers
                                                            to consider the role of funding in reaching policy
Two specific examples were raised. First, the               and economic growth goals. Just as the missions of
2016 legislation prohibited local ordinances on             the CFME and the OFME includes ideas and efforts
most aspects of on-demand automated vehicle                 from different state agencies, funding for mobility
fleets to allow the concept to take form and work           and electrification will include programs crossing
through demonstrations. The predictions for                 traditional lines. Funding and personnel positions
broad commercialization of such fleets has still not        for the OFME should be included as well as
been realized, and the CFME recommends either               programs within EGLE focused on electrification,
eliminating the current sunset date of December             offices at MDOT focused on ITS and multi-modal
31, 2022 or extending it to December 31, 2025. The          transportation, especially those dealing with public
CFME also recommends that policymakers remove               transit, and business development and community
the current limitation for on-demand automated              revitalization efforts at the MEDC.
vehicle fleets that excludes commercial vehicles.
Revising this provision would allow commercial              Michigan should permit operations of personal
motor vehicles to be included in demonstrations             delivery devices (or automated delivery devices),
and deployments showing new efficiencies in                 and extend the permissible vehicle type for
freight movement.                                           on-demand automated vehicle fleets to include
                                                            commercial vehicles
Improve the internal capacity of state
government by increasing funding for state                  Balancing delivery desires, consumer preferences,
departments’ mobility efforts                               and innovations changing the future of the logistics
                                                            industry with the impact on jobs and economic
The CFME recommends increasing the budget                   disruption, especially emerging from the current
and staff for state agencies and offices working            pandemic, requires a steady commitment and a
on the future of mobility, electrification, and             strategic plan for transition based on real data. The
smart infrastructure. This will facilitate more             growth of last mile or home delivery of goods is
rapid decision making, innovative thinking and              easily observed and well-known. Even accounting
processes, as well as enhance current mobility              for the special circumstances of the COVID-19
ecosystem development programs                              period, the phenomenon seems here to stay.
While discussing new technologies, state                    Consumers have become more accustomed to
regulations and state government interactions               swifter and more convenient delivery of goods.
with developers and industry, workgroup members             Last-mile delivery innovations imply efficiency and
noted the state and its private mobility partners           minimized traffic impacts by replacing large delivery
would be aided by additional funding for state              vehicles with automated ground devices and
agencies working to codevelop the sector. In                unmanned aerial systems. Michigan lawmakers
some cases, such as intelligent transportation              have considered legislation to allow automated
                                                            or personal delivery devices to transport goods

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Part 03   Actions of the Council/Policy Recommendations

                over short distances on sidewalks and streets to homes and
                businesses. In the current 2021-22 legislative session, Senate
                Bill 538 and Senate Bill 560 have each been introduced to
                allow such devices and provide guidelines for their use. Over
                a dozen other states have enacted such measures. While
                new jobs in packaging and delivery seem likely to be created,
                special consideration is needed for workers who presently
                provide these services and who may be displaced. Part of the
                challenge is to understand what new job opportunities may be
                created. Attention is also needed to retrain current workers to
                obviate technology advancement at their expense. The CFME
                recommends passage of legislation that permits the thoughtful
                and safe, and scalable use of automated ground delivery
                devices with an associated jobs impact study so that the state
                can better prepare for the future of the logistics industry.

                The state should revise its driver licensure laws to facilitate
                greater mobility for persons with disabilities or other
                personal mobility barriers

                The CFME recommends amending Michigan’s driver licensure
                laws in advance of the higher levels of automation to firmly
                establish the independent mobility solutions for those currently
                challenged or legally barred. Michiganders with disabilities are
                among the most hopeful advocates for automated technology.
                Current driver licensure laws, enacted decades before the
                new technology, legally block them from independent mobility
                based on an ability to safely operate a motor vehicle that,
                over time, has developed the ability to operate itself. While
                commercial use of vehicles with automation levels four and
                five is still in the future, it is not too soon to plan for it (the scale
                or levels of automation were established in SAE International
                J3016 “Taxonomy and definitions for Terms Related to On-road
                Motor Vehicle Automated Driving Systems”). More importantly,
                it is not too soon to reassure in state law that persons with
                disabilities will enjoy the freedom-giving technology when it
                becomes available instead of waiting for future revisions or
                “special add-ons” to the law. Driver licensure is a traditional
                regulatory role for states, and Michigan can set a clear signal
                and standard now that will benefit the state’s global mobility
                leadership status.

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Part 03   Actions of the Council/Policy Recommendations

Michigan should develop and implement                        development and tangible benefits for the motoring
policies supporting the world’s first deployment             public, the first responder community and road
of a connected and autonomous vehicle (CAV)                  construction workers. CFME recommends MDOT
corridor                                                     and OFME work with the mobility industry to
                                                             develop systems for sharing construction zone
The CFME recommends establishing policies                    data in real-time to enable the dynamic updating of
and enacting laws to aid in the successful                   maps and using AI to keep construction workers
development and deployment of the world’s                    and motorists safe. The CFME recognizes this
first connected and automated vehicle (CAV)                  may require additional back office support staff to
laneway. While the 40-mile Detroit to Ann Arbor              operate ITS, which is accounted for in a previous
CAV corridor is the first of its kind, it will not be        recommendation to increase funding for state
the last and Michigan has the opportunity to lead            mobility offices and agencies.
in developing state policies that will facilitate
these smart infrastructure deployments. While                Michigan should advocate to federal
a myriad of policy considerations may arise over             policymakers about C-V2X and the need for
the lifespan of developing, building, and operating          resources to states to upgrade and accelerate
CAV smart infrastructure, the public policy                  deployment of connected infrastructure
considerations known to be useful today include              systems, as well as the need for additional
creating CAV lane designation and dynamic road               spectrum beyond the limited 30 MHz spectrum
use charging authorization, permitting the use of            that has been allocated for transportation safety
CAV innovations in infrastructure design, and, most
importantly, ensuring that CAV lanes are a safe and          Since late 2019, the Federal Communication
effective service to the public and our economy.             Commission (FCC) has undertaken a regulatory
To the extent that CAV lanes will present the                process to revise the allocation of the 5.9GHz
opportunity to both disrupt and create new jobs, a           portion of the wireless spectrum. That portion
jobs impact study should also be included as part            of the spectrum had previously been dedicated
of these statutory changes.                                  to traffic safety applications. However, in FCC
                                                             Docket No. 19-138, the FCC chose to reallocate
State agencies should work with the mobility                 the spectrum to reduce the portion for traffic
industry to develop systems for sharing of real-             safety and allow it to be used by other interests.
time construction zone data for dynamically                  The implications for traffic safety are to lose a
updating maps and artificial intelligence (AI) and           significant portion of that available spectrum, to
addressing worker safety                                     raise the possibility of signal interference from
                                                             nearby users, and to saddle road agencies with
Michigan must lead the way in providing dynamic              costs of converting to new, compatible equipment.
information on fast-changing situations like                 This is an especially important issue for Michigan
construction zones. Road agencies struggle to keep           and local road agencies who have recognized the
the data for mobility technologies up to the precise         value of ITS and connected vehicle technology
and timely standards needed. MDOT and other                  and were early adopters. While the regulatory
Michigan road agencies acknowledge the need                  process has reached its conclusion, hope remains
and the challenges in doing so. Leadership in this           that other portions of the spectrum might be
area can lead to a huge breakthrough in technology           identified for traffic safety, and that road agencies

                                                        13
can be reimbursed for conversion costs to other        is met to ensure the safety and traffic efficiency
forms of connected infrastructure communication        benefits are realized both now and in the future.
devices (e.g. CV2X or cellular-vehicle-to-everything
technologies).                                         Michigan should also advocate federal
                                                       policymakers about the need for a uniform,
The CFME recommends the state, through                 national automated vehicle (AV) policy and
legislative resolution and agency and political        about revisions to the Manual on Uniform Traffic
advocacy, educate federal policymakers about           Control Devices (MUTCD) to include items that
the need to provide the states reimbursement for       facilitate AV deployment
the costs associated with conversion of road-side
units (RSU) to the newly endorsed technology           Michigan must lead among the states in advocacy
(C-V2X) and continue to encourage deployment           to the federal government on the future of mobility
of this technology through federal grants. Without     and electrification. The CFME recommends
such reimbursement, road agencies will essentially     Michigan officials advocate and attempt to
pay twice for the same safety benefit, effectively     influence content and decisions on federal AV
decelerating or even terminating deployments.          policy and guiding documents. While states have
Policy makers at the federal level should recognize    a vital policy role in automated vehicles, there
the importance of the situation and provide            is a pressing need for a federal policy including
reimbursement based on the cost of upgrading           legislation. Important topics of traditional federal
states’ connected systems as they existed when         regulation in design, construction and performance
the spectrum reallocation occurred. There will also    of vehicles need policy direction and to start
soon be a need for additional spectrum beyond          rule making for important regulations at that
the 30MHz that have been allocated as these            level. Outside of legislation, Michigan should
technologies transition both to 5G and then also get   actively contribute to discussions on revisions to
utilized for advanced use cases like AV’s. Various     the Manual on Uniform Traffic Control Devices
studies have suggested that an additional 40MHz        (MUTCD) to ensure the promise of technology is
of spectrum will ultimately be needed. The FCC         properly reflected.
should ensure that this additional spectrum need

This report builds on the momentum Governor Whitmer
started in creating the new Office of Future Mobility and
Electrification and the Council on Future Mobility and
Electrification. The pace and excitement of announcements
in these fields in Michigan is building. This report and the
work of the council will be key in bringing focus and energy
to state efforts going forward.
TREVOR PAWL | Chief Mobility Officer
Part 03   Actions of the Council/Policy Recommendations

ECONOMIC DEVELOPMENT

The CFME workgroup covering economic                         will assist in closing this gap and mitigate risks. To
development issues was quick to identify that                increase Michigan’s inventory of industrial sites and
many of Michigan’s longstanding shortcomings in              enhance those sites for business attraction and
its economic development toolbox are the result              growth opportunities, the state should capitalize
of insufficient funding and budget prioritization.           a large site development fund to acquire and
These shortcomings were then exacerbated by                  create “ready” site properties for mobility business
the COVID-19 pandemic. With the passage of the               development and attraction.
American Rescue Plan, the anticipated resources
to be deployed by a federal infrastructure package           Business development projects requiring
and the American Jobs Plan, as well as the state’s           substantial infrastructure modifications including
own one-time budget surpluses due to increased               water, sewer, wastewater treatment, electric power,
consumer spending during the pandemic,                       natural gas, telecom, rail and/or road improvements
Michigan has a generational budget opportunity               present particularly strong challenges, especially
to fund many of the mobility and electrification             when working to address large enough parcels
sector economic development tools that have                  to meet business needs. Michigan has a limited
needed attention for years. The recommendations              number of existing sites and facilities available to
are designed to be transformational one-time                 support its expanding businesses and a limited
investments that will translate into sustainable,            number of sites 300 acres or larger, with full
long-term growth and monumental leapfrog                     infrastructure in place. For projects requiring 1,000
opportunities that will keep Michigan in a global            acres or more (megasites) Michigan can currently
mobility and electrification sector leadership               only offer two sites, neither of which are served
position.                                                    with municipal water and sewer and both require
                                                             substantial upgrades to other public and private
Develop a better inventory of large sites                    infrastructure. By comparison, North Carolina
                                                             currently has 10 megasites, including at least
Site selection is the beginning of all project               six known to have full infrastructure. The cost to
lifecycles and is the most important factor of siting        provide public infrastructure to sites can range
a project in Michigan. The state’s current inventory         from $2 million to $100 million or more for very large
of “project read” sites is insufficient. Michigan            projects and utility users. It is critical that the state
needs such locations to continue to compete                  be able to offset these infrastructure connection
effectively for attraction projects. Michigan has            costs and develop new sites to expand its inventory
lost many opportunities since 2008 because                   of build-ready sites, with a particular emphasis on
Michigan’s sites were not “project ready.” Many of           large sites that can support business development
Michigan’s industrial properties are in underserved          projects that can have a transformative impact on
populations or townships. Communities need                   regions and workers substantially impacted by the
financial and technical assistance to improve the            COVID-19 pandemic and populations living below
industrial properties in their region. We are years          ALICE thresholds.
behind the site preparedness strategies employed
by Southern states, and an industrial sites program          The CFME recommends the state capitalize a

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Part 03   Actions of the Council/Policy Recommendations

strategic site development fund with $100 to $250              are: year-round programs with consistent funding
million as a way of scaling or supplementing the               and site awards are made year-round, a dedicated
MEDC’s Build Ready Site Program. Based on                      funding source, a dedicated third party certification
MEDC estimates this level of funding could develop             (engineering firm or site consultant firm), buy-
six large sites (300 acres or larger) and an additional        in from the local communities, and continuous
30 smaller sites in less-populated areas of the                marketing.
state. This funding will allow smaller to medium
sized businesses expand their companies as they                Redesign economic-talent development tools
position their operations to recover from impacts of           to be smarter, more coordinated with talent
the pandemic, and prepare for new Industry 4.0 and             development goals
other technology demands. Projected outcomes                   Tax incentives, P3 style investments, land options,
are 8,529 in acreage development, $11.4 billion in             and other forms of monetary, traditional economic
private investment, 19,600 in new jobs created, and            development tools are not alone going to help
$10.1 million in public/private match funds.                   Michigan keep pace with business development
Grants from the fund should be awarded to                      opportunities in the future of the automotive
applications that: prioritize impact to geographically         sector. We have already started to see an evolution
disadvantaged areas and distressed communities;                in the Requests for Information (RFI) to which
demonstrate that site development will lead to a               the state is being asked to respond and in the
substantial number of pathway job opportunities                types of questions and the strategic focus of the
and equitable, high wage growth opportunities                  issuing companies. Relationships are important,
for individuals; benefit target industry sectors               and perhaps even more than financial incentives,
(evaluated based on potential economic impact to               companies want to know that the states they’re
the local community, region and the state, including           investing in are planning for their mutual, long-term
but not limited to MEDC strategic sectors); result in          success. Talent remains a significant interest, but
green infrastructure and site design and positively            companies want to know how states plan to supply
address environmental justice communities;                     talent directly to their industry. Michigan needs to
emphasize COVID-19 impact mitigation such as site              solve for these factors to remain competitive in the
development for specific end-users that have been              automobility economic development space.
impacted by the pandemic.                                      The CFME recommends that the state refocus
Michigan has lost several projects to Alabama and              its economic development tools to be more
Mississippi. Alabama began the site program in                 comprehensive. Through a more comprehensive
2008 and currently has 60 certified sites identified           set of economic development tools the state can
across the state. Mississippi’s site program has               make its economic development investments go
a matching grant of up to $50,000 for Ready Site               further while still attracting more future mobility
or $250,000 for Premier Site and MDA funds site                companies, help solve for these same companies’
applications. Tennessee has the nation’s top site              long term talent needs, establish more stickiness
program and Georgia’s is ranked second. Both                   for those companies to remain in Michigan and
programs have searchable real estate databases                 continue to make more investments.
and provide funding to communities with industrial             The state should review its current toolbox of
property. The differences from Michigan’s program              economic development incentives and, where

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Part 03   Actions of the Council/Policy Recommendations

and when it is strategically advantageous, aligns            focused on holistic economic impact while still
with both a target company’s vision and the local            being primarily a jobs-driven activity.
educational institution’s goals, the state should tie
its incentives to requirements that the receiving            The goal is to achieve an increase in Michigan’s
company play a role in the local education,                  stickiness for the automotive sector through an
workforce and talent development institutions.               enhanced capacity of the sector’s talent pipeline.
                                                             Generally, a ROI is anticipated, but without the
The companies awarded enhanced talent                        data that would come as a result of attempting this
economic development incentives should be                    sharpening of our economic development tools it is
incented to engage in the local PK-12 system,                tough to estimate what the percentage increase on
community college, or university. Options could              today’s economic development activity would be.
include:
                                                             An ancillary benefit of a change like this is the
• sponsoring a FIRST Robotics team;                          potential for the state’s economic development
• sponsoring a coding competition team or class;             work to help provide a more attractive set of
                                                             engineering, science, mathematics, art, and
• supporting a STEAM program with equipment,                 technology educational offerings at local
  teacher externships, guest lecturing/teaching,             educational institutions.
  projects and curriculum designs, or by offering
  real-world educational opportunities;
• offering company space as an age-appropriate
  field trip site;
                                                                   This would make the entire
• creating a high school internship or mentorship                  community more attractive
  program;                                                         to future residents and
• creating a scholarship fund for the local
  community;
                                                                   positively impacting overall
• creating a postsecondary internship or                           economic health of the area.
  mentorship program; and
• having senior engineers as adjunct teachers at
                                                             While some states, like Illinois, have established
  the local postsecondary institution.
                                                             partnerships between the state, an automobility
The MEDC, the target company, and the local                  company, and a community college to create a
educational institution would need to develop the            direct-to-company talent pipeline, the CFME is not
location-specific plan that works for all involved,          aware of any state that ties economic development
with the primary focus being on the experience and           incentives in the way being proposed here. This
learning opportunities for students.                         initiative would help make Michigan stand out from
                                                             other states as a place that is willing to implement
The proposal is not to simply spend more dollars             unique business attraction efforts, and indicates
on economic development, but to make the current             the state government intends to have long-lasting,
economic development tools more robust, and                  symbiotic relationships with the sector.
perhaps adjust the state’s ROI formula to be more

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Part 03   Actions of the Council/Policy Recommendations

The comprehensive economic-talent development               vehicle, a daily commute may involve different bus
tools could be developed and tested at a pilot level        systems, different fares and different acceptance
with a predetermined education institution that             of payments. Commuters and employers alike are
desires this sort of relationship.                          frustrated at the lack of seamless connections
                                                            and the likelihood of gaps and delays in timely
Create a “mobility wallet”                                  travel. Additionally, a tool developed with a
The CFME recommends the state spend $2 million              specific consideration for those without access
to create a centralized platform to systematically          to traditional financial services (unbanked
launch and scale mobility solutions statewide. This         Michiganders) will help drive greater equity in
platform would work to remove transit barriers              our transportation system. MDOT is beginning
and provide critical, post-pandemic solutions               important groundwork in creating harmonized
like contactless fares, common transit fares and            payments and transactional management to speed
parking payment processing across the state,                and smooth the movement from one provider to
reward programs, dynamic pricing and routing and            another. Residents and workers should be able
goods delivery. Transit and shared, multi-modal             to use the current services and others such as
mobility are essential to moving large numbers              transportation network companies so that new
of workers, commuters and the general public.               innovations can serve them without the stumbling
Increasingly, new modes of micromobility such as            block of uncoordinated payment.
electric scooters and e-bicycles can also play a            Establish and capitalize a startup resiliency fund
role. However, riders are challenged in moving from
one provider or mode to another. While bus service          Michigan is innovative, but could commercialize
may be available to someone lacking a personal              more of the innovations developed here. In the

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Part 03   Actions of the Council/Policy Recommendations

United States, Michigan is 7th in academic R&D                from $514 million in 2019 to $25 million in 2020.
and 5th in business R&D (% of GDP nationally)                 “MVCA survey respondents estimate that $1.2
and generates the 12th most patents per capita.               billion of additional venture capital will be required
Young companies drive job creation in the US,                 to adequately fund the growth of Michigan’s 165
but Michigan has a lower share of them in our                 startup companies in the next two years.”
economy. These dollars are lifelines to young
companies that drive job creation. Michigan is the            The initiative will be targeted exclusively towards
second highest receiver of automotive venture                 Michigan start-ups that faced documented
capital (VC) funds, but is still just 1/10th the scale        COVID-19 impacts, and will specifically target
of California. Unlike other regions, the majority of          support for entrepreneurs of color, women owned
automotive VC funding in Michigan is focused on               businesses, and businesses located in geographies
hardware, with just 6% of investment in software.             whose economies were disproportionally impacted
Even in hardware technologies, VC funding in                  by COVID.
California surpasses Michigan                                 The Initiative’s three lever approach is designed to
By being more competitive and having a better                 diversify risk and drive returns across three core
ecosystem for VC and private equity funding                   objectives:
Michigan will be able to help identify and develop
more mobility startups and associated jobs from                1    gain broad exposure to growth and value
the creation of intellectual property (IP).                         creation in Michigan-based businesses in
                                                                    sectors that have been harmed by COVID;
The CFME recommends that in order to attract
more venture capital investments to Michigan’s                      increase investment capital in Michigan,
                                                               2
mobility ecosystem, the state should establish a                    particularly in communities that have
$200 million startup resiliency fund. The fund would                been most harmed by COVID or that have
seek to fill a gap by targeting underserved and                     lacked traditional access to investment
underrepresented entrepreneurs.                                     opportunities;
This fund would be a budget investment with
                                                               3    produce financial returns that can be
administrative operations. The fund would contain
                                                                    reinvested into hard-hit communities.
three main parts: as a targeted form of small
business support, the state would provide equity
investments ($140 million), grants ($5 million), in-          The immediate action for setting up the fund would
kind services, and technical assistance to start-ups          involve:
($10 million).
                                                              • establishing a State Benchmarking Exercise and
Start-ups are worthy of a dedicated program:                    Advisory Committee;
According to Michigan Venture Capital Association,            • setting up and engaging In-State, Global Advisory
“Capital available for new investments in 2020 was              Committees; and
$503 million, a decrease of 44% over the last five
                                                              • implement fund structure.
years.” Venture capital activity in Michigan dropped

                                                         19
Benchmarking Exercise: LEO, Treasury and             Fund Structure, Governance, Management and
MEDC and a core group of in-state local partners     Operations: A halo oversight structure will govern
would conduct a series of interviews with state      all three levers. Each lever will have a dedicated
officials that have launched, or are launching,      Fund Manager (individual or third-party firm). Fund
similar fund constructs. Ohio and New York have      Managers to be appointed by LEO, Treasury and
operated successful funds of more than $100M for     MEDC with counsel from the Advisory Committee.
years to grow jobs in key industries. Ohio’s $150M   The Fund Managers would have discretionary
fund has invested in firms that have employed        mandates over their respective capital allocations.
~3,000 people. Firms that received funds from        But they would work closely together to ensure a
the state of Ohio employed staff with 50% higher     cohesive strategy and report to an oversight board
wages than average in-state employees. And           appointed by LEO, Treasury, and MEDC. LEO and
Wisconsin has $100M allocated for a new fund this    MEDC will work with fund managers to provide
budget cycle.                                        business development support to maximize the
                                                     Fund’s ROI.
Advisory Committee: A group of advisors will need
to be assembled to help guide the fund creation      Fund Structure Implementation and Investment
process. This includes defining fund structure and   Lever: Below are program design assumptions
strategy, identifying potential fund managers, and   based on a $140M allocation for Fund of Funds
aligning potential co-investors. These advisors      investments. With guidance from the Advisory
will be a mix of local players and Michigan expats   Committee a final recipient fund criteria, portfolio
with deep experience and expertise in investment     guidelines and selection process will all be
strategy and fund management.                        determined.
Part 03   Actions of the Council/Policy Recommendations

Programmatic Grant Lever: Below are program design assumptions based on a $50 million allocation for
non-equity grant-based investments or co-investments. With guidance from the Advisory Committee, we
will determine final criteria for companies or co-investors applying for grants.

Technical Services Lever: With guidance from the               The initiative will be targeted exclusively towards
Advisory Committee, LEO, MEDC, and Treasury will               Michigan start-ups that faced documented
determine complementary technical services to                  COVID-19 impacts, and will specifically target
help portfolio companies succeed.                              support for entrepreneurs of color, women owned
                                                               businesses, and businesses located in geographies
This fund would be revenue negative at first, but              disproportionally economically impacted by COVID.
the initiative is a one-time investment and would
recycle capital from returns. There would be an                Michigan is absolutely behind other states with
estimated return on investment, though there are               regards to policies and investments to develop a
too many variables to accurately estimate values.              robust venture capital market. Techniques used
This fund is intended to operate with a required 1:1           have experienced success in other states and
private match.                                                 countries around the world. Success would be
                                                               helping unlock private investment into Michigan’s
This initiative will catalyze economic diversification,        entrepreneurship ecosystem, while creating the
making our state more resilient and less                       environment for the long-term creation of good
susceptible to future economic downturns. It will              jobs.
support more small business startups, and both
grow demand for, and offer career options to a
more high-skilled workforce.

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Part 03   Actions of the Council/Policy Recommendations

Create a Global Center of Excellence for both                  Venture capital funding for AI companies totaled
Battery Innovation and Responsible Artificial                  $61 billion from 2010 to 2020, while funding
Intelligence                                                   for battery storage, smart grid, and efficiency
                                                               companies increased by 12% from 2019 to 2020,
Universities are critical to building tech ecosystems.         rising to $2.6 billion. The volume and pace of
In Silicon Valley, Stanford University played an               venture activity indicate that these areas are poised
instrumental role in establishing the region as the            to shape the world for decades to come, positioning
global epicenter of technology innovation, in large            Michigan as the leading tech ecosystem for urban
part due to its robust R&D pipeline. Stanford’s role           infrastructure, equitable mobility, and sustainable
in catalyzing the Silicon Valley ecosystem can be              transportation. This proposal recommends two
traced to the creation of Stanford Industrial Park             global centers of excellence for created to focus on
in the 1950s. By establishing a physical center for            responsible AI and emerging battery innovation.
collaboration, Stanford sent a signal to the private
sector that it was a committed partner in shaping              Global Center of Excellence for Responsible
the future of technology. From 1970 to 2010,                   Artificial Intelligence: The establishment of
Stanford’s Office of Technology Licensing disclosed            a multi-university partnership to research and
8,300 cumulative inventions and executed over                  apply responsible artificial intelligence (AI) to
3,500 licenses for companies, including Google.                identify, analyze, and improve local transportation,
The strength of Stanford’s research programs also              cybersecurity, and logistics networks. This
created stickiness in the ecosystem, as spin-out               would be in a way that propels cities and rural
companies were incentivized to remain in Silicon               areas into an equitable and sustainable future.
Valley for evergreen access to skilled talent. At              Selected universities would work together to
Mountain View-based Google, for instance, 1 in                 develop artificial intelligence algorithms meant to
20 employees graduated from Stanford. More                     improve global infrastructure and transportation
recently, the University of Texas at Austin has                networks, starting in Michigan. The focus will be
driven economic development through programs                   on addressing the question of how AI can best be
like the Austin Technology Incubator, which                    used to enable and accelerate equitable mobility.
resulted in the formation of 300 companies and
generated a $3 billion economic impact in Texas.               Global Center of Excellence for Battery
Tech ecosystem growth in both Silicon Valley and               Innovation: In parallel, a global center of excellence
Austin has been intrinsically tied to – if not directly        for emerging battery technologies would be
catalyzed by – universities committed to cutting-              launched, also as a multi-university partnership,
edge, collaborative innovation.                                to reinforce Michigan’s leadership position in
                                                               vehicle electrification and transition Michigan’s
The CFME recognizes there is a compelling                      workforce to lead an electrified future across all
opportunity to leverage Michigan’s network of                  modes of transportation. Batteries hold the key to
research universities to advance the State’s                   transitioning away from fossil fuel dependence.
mobility leadership goals and build a vibrant                  Cutting edge research and Innovation will be a
ecosystem around two emerging areas: Artificial                cornerstone for building a globally competitive
intelligence (AI) and sustainable batteries. The               battery industry in Michigan and positioning the
CFME strongly recommends the state establish                   state to capture the massive economic opportunity
these two Global Centers of Excellence with a $50              underlying the shift to battery-based mobility and
million investment.                                            energy systems. The growth in EV sales, in large

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Part 03   Actions of the Council/Policy Recommendations

part, is linked to reductions in cost, improved              Once the official partnerships are in place,
performance of lithium-ion batteries, and a                  technical implementation for the Global Center of
commitment to the environment. The creation of               Excellence for Responsible Artificial Intelligence
research programs that:                                      should focus on developing transparent AI models
                                                             for mobile users. Due to the rapid adoption of digital
• enable EV batteries that charge in less than 10            technologies, many applications that once treated
  minutes while maintaining at a ~300 mile range             users as passive entities must now consider them
  (lasting for the life of a vehicle),                       as active participants. This is particularly the
• develop batteries that achieve EV range and                case for companies or utilities in the mobility or
  charge rate parity while halving the size of the           infrastructure space that are tasked with optimizing
  battery cell,                                              the performance of a system that people are
• lead the development and application of new                actively interacting with in real-time. To address
  manufacturing processes and more affordable                these challenges, the center will focus on the
  materials,                                                 development of ‘glass box’ models that increase
                                                             transparency, accountability, and trustworthiness
• leading the development of new battery recycling
                                                             without sacrificing learning performance.
  technologies,
                                                             Cybersecurity would also be a focus.
• dramatically improving safety (non-flammable),
  and                                                        The state-academic partnership should also
                                                             focus on AI systems that balance efficiency and
• halve battery pack costs.
                                                             fairness. As companies or utilities leverage these
Both Centers of Excellence can incorporate private,          learned models, they typically focus exclusively
federal, and local match requirements. These new             on improving system efficiency. However, this
in-state assets will position Michigan and multiple          singular focus creates large discrepancies between
universities and partners to better compete for              individual user experiences. Unfortunately, this
federal funds and private capital.                           type of approach can lead to large discrepancies in
                                                             travel times that unfairly burden the poorest in our
These two Global Center for Excellence could                 communities. To address this challenge, the center
be implemented like other examples of the state              will focus on technologies that help companies or
partnering with universities on joint operations or          utilities account for users’ economic hardship.
projects through Memorandums of Understanding
(MOU). Selected universities for the responsible AI          The state-academic partnership should also
excellence center must have experience in artificial         conduct user-inspired research to better
intelligence, next generation infrastructure and             understand what drives innovation while enhancing
transportation systems, and quantifying the impact           safety. Each of these major research efforts will
of technology in diverse communities. Likewise,              build upon prior efforts around fare optimization,
the university partners selected for the battery             data driven decision-making that fits into the
innovation excellence center must have experience            larger context of transportation applications. The
in battery materials, manufacturing, design                  properties of any developed AI algorithm will be
research, and a strong history of collaborating with         directly motivated by user-inspired research. Any
industry partners.                                           developed algorithms will need to be robust and
                                                             verified to operate correctly since the safety risk

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