How design can make connected cars a reality

The promise of Internet-connected vehicles is in full view, the question now is "when?"

By Olof Schybergson

FORTUNE -- Henry Ford's visionary idea of the moving assembly line spurred a revolution in car manufacturing.  With a conveyor belt production line, "they cut the time taken to assemble a Ford Model T from 12 hours and 30 minutes in 1913 to just one hour and 33 minutes the following year."

A hundred years on, and the car industry needs another revolutionary idea to transform its production and design for a digital age. Like the health care and banking industries, the car industry must rethink its fundamental structure in order to adapt to the needs of a new generation of ultra-connected drivers and passengers. Without reengineering the fundamentals of the car -- Google's (GOOG) driverless car project, or flying car fantasies -- we need a totally new paradigm in car manufacturing. Right now, the behavior of wired passengers is an afterthought.

In order to unleash the connected car, we need to reframe our thinking about what a car is capable of. This might mean imagining it primarily as a digital space, rather than solely a transportation device. Here's how:

Integrating the hardware with the software

Carmakers have struggled to move beyond the idea that consumers want a smartphone experience within the car, but this view has made digital experiences in the car, like touchscreen dashboards, appear clunky, Frankenstein additions to an analog design that has been honed over the decades. Manufacturers could learn from other industries that have run up against similar problems.

Smart TV users have grown very frustrated with an overly complicated application grid that mirrors the interface of their smartphone. When they're trying to relax, they don't want to go through several screens before being able to enjoy a show. Within a truly connected car, users will want seamless integration, without having to think too much about it. They will still desire the ability to physically touch and maneuver knobs and dials, rather than being distracted by a complex digital dashboard. After all, they must focus on the primary experience: driving.

Currently, these digital experiences are plugged into an existing design of the car, almost as accessories. Imagine if smartphone creators focused on the hardware over the software, putting all energies into the casing. To create a truly great connected car, these features must take precedent in a holistic interactive system with the hardware of the car designed around the "software."

When navigation meets recommendation

If we were to design from the inside out, putting service design at the heart of car production, we could create better, more integrated solutions that adapt to people's needs.

A crucial component of the connected car is smart navigation. One of the top three global players in route finding and smart mapping is Nokia Here (NOK). Not only does the company provide mapping platforms for key tech players, like Amazon's (AMZN) Kindle Fire, Facebook (FB), and Microsoft's (MSFT) Bing Maps, they're behind the majority of in-car navigation systems. Through our work with Nokia Here, we've found that people want more from their maps than basic navigation and traffic indicators.

Route finding is just the base layer to be enhanced by smart service. Increasingly, people want to deepen their exploration of the place that they are traveling. They want social and service information to overlay and compliment the navigational display. For example, cultural recommendations, logistical information, sales at a nearby shop, or a local's knowledge of a new place. We're seeing more of this in the app space with products like Google's Field Trip that hints at proactive location services and, of course, Foursquare that uses their extensive data points for smart recommendations.

People want a seamless experience that doesn't distract from their driving. A key service design challenge is to balance the tension between data overload and smart services to add meaningful information for travelers.

The car as mobile location

The average American spends over 90 minutes in her car each day. What if instead of a disruption, a person's commute could become productive? Futurist Stephen P. Johnson imagined the car in a series of "ludicrous ideas" as new spaces: breakfast nooks, closets, gyms, and even as a specialized workspace. While these ideas are cartoonish and playful, imagining the car as more than a means of transport is not farfetched. To transform the car into this new space, it needs to seamlessly continue work or entertainment we are engaged with on our tablets and smartphones.

Right now, when we enter and exit our cars, our conversations or the media we're listening to on our smart phones are disrupted by having to connect and reconnect our communication devices. What if the activity could seamlessly continue into our car's speakers without tying up our hands or distracting our eyes from the road?

Beyond the driver's advantage of this seamless experience, passengers could also benefit. One potential is for all the surface space within a car to be reimagined, beyond the usual placement of screens, in the back of seats. What if back-seat windows became surfaces for game-based activity? Or if a Google Glass-level of augmented reality enabled passengers to explore and understand landscapes in new dimensions?

This could have major implications for education, as a car could be transformed into an interactive classroom or training space. A student could learn about the space they're passing through, looking at the geography from a historical or social perspective. Imagine mobile window-shopping as you pass through a city's shopping district or search for a preferred restaurant, all from the backseat of the car.

Automated environmentalism

The future of the connected car means more than being digitally wired. The vehicle of the future must also be consciously connected to its environmental and social impact. In this respect car manufactures could take a cue from driving apps like Automatic. Both an app and hardware device that's akin to wellness apps like Jawbone and Fitbit, Automatic tracks how much fuel you're spending based on your speed and other driving behavior so that you can make more fuel-efficient, and ultimately, environmentally conscious decisions when you drive.

Tracking driving behavior can have benefits in other ways as well. State Farm and Ford (F) teamed up to record drivers' behavior through a sensor. After collecting and reviewing this data, State Farm can lower your car insurance, if they see you are driving safely.

When will the future arrive?

If we want to hand the car keys of the future to the masses, we must remove the digital divide in the manufacturing process and then move beyond the assumption that a smartphone interface is the best digital solution for the car. The car should be seen as a platform in which productivity, knowledge sharing, discovery, and exploration are enhanced through seamless, intuitive design. To achieve this, the automotive industry must reimagine the manufacturing process from the perspective of the connected consumer car.

Olof (@olof_s) co-founded Fjord in 2001, and has since led the company to become one of the world's most successful service design consultancies working with clients including the BBC, Citibank, ESPN, Flickr, Foursquare, Harvard Medical School, Nokia, and Qualcomm, among others. Olof has years of experience collaborating with major brands to design breakthrough experiences that make complex systems simple and elegant. A frequent speaker at global conferences and events, recent appearances include Fortune 2012 Brainstorm Tech, GigaOm Mobilize, and Rutberg Future: Mobile.