Why Toyota Set up New $1 Billion Research Group as a ‘Skunkworks’

By Scott Kirsner |  January 27, 2016

We caught up earlier this month with Gill Pratt, the chief executive of the newly-formed Toyota Research Institute. The world’s largest carmaker announced it will invest $1 billion over five years to set up new research facilities in Palo Alto, Calif. and Cambridge, Mass., with a focus on artificial intelligence and robotics.

The new institute has four initial mandates, according to a speech Pratt gave at the Consumer Electronics Show earlier this month (video excerpt below):

“First, we wish to enhance the safety of automobiles with the ultimate goal of creating a car that is incapable of causing a crash, regardless of the skill or condition of the driver.

Second, we want to increase access to cars to those who otherwise cannot drive, including people with special needs and seniors.

Third, we plan to help translate Toyota’s expertise in creating products for outdoor mobility into products for indoor mobility. In other words, Toyota’s goal is to move people across the room…across town…and across the country.

Finally we hope to accelerate scientific discovery by applying techniques from artificial intelligence and machine learning particularly in the area of materials science.”

The new institute is just ramping up this winter, and it expects to hire about 200 people in Cambridge and Palo Alto, as well as funding academic research at MIT, Stanford University, and other schools.

We asked Pratt to explain why Toyota decided to set up the new Toyota Research Institute as its own entity, separate from the $60 billion company’s existing R&D organization. Pratt was previously the program manager at the Defense Sciences Office within DARPA, the U.S. Department of Defense’s advanced projects agency, and a robotics professor at MIT.

“The model with TRI is a little different. A good example is the role that DARPA plays in the U.S. government, which I lived for the last five years, or the role of the Skunk Works at Lockheed. TRI has actually been set up as its own company, with me as the CEO. We think it’s important for TRI to be independent in how it makes its decisions. If you look at the history of the Lockheed Skunk Works, they didn’t have to ask a lot of permission from the main company in order to do things. That allowed it to respond nimbly from things they learned.”

“Toyota Motor Corp. [the parent company] is our customer, in the same way as DARPA has the Department of Defense as its customer. It didn’t mean that DARPA had to respond to every request from the DOD, and when President Eisenhower set it up in the 1950s, DARPA was set up to be semi-autonomous.”

“We definitely have the customer in mind all of the time, in the same way that DARPA had the needs of the Defense Department in mind. But [we are empowered to] make decisions which can dynamically change about the best way to get [to the goal.] That’s the autonomy we’ve been set up with. It’s very good, and somewhat different from most of the corporate research labs that exist.”