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The Promise of the Industrial Internet

Posted By Jeff Moad, November 26, 2012 at 3:17 PM, in Category: Transformative Technologies

Instrumented, intelligent machines, coupled with advanced, predictive analytics and mobile and cloud-based technologies are poised to bring new levels of efficiency to a wide range of industrial environments, driving a surge in productivity that will be comparable to the what was seen during the Industrial Revolution and the Internet Revolution of the late 1990s and early 2000's, according to a report recently released by General Electric.

The report, written by GE Chief Economist Marco Annunziata and Peter C. Evans, director of global strategy and analytics at the company, heralds what it calls the Industrial Internet, which is composed of three elements, according to the report:

  • The connection of the world's machines, facilities, fleets, and networks using sensors, controls, software, and communication technology such as the Internet;
  • Advanced analytics based on predictive algorithms, automation, and deep domain expertise; and
  • Mobile and other technologies that people and support more intelligent design, operations, maintenance as well as higher service quality and safety.

The Industrial Internet, the report predicts, has the potential to drive significant productivity improvement and cost savings in industrial segments that account for 46% of the worlds economy, worth $32,3 trillion annually. Those sectors include manufacturing, resource extraction, construction, transportation and health services.

In those sectors, the report claims, the Industrial Internet has the potential to significantly boost labor productivity, leading to economic growth and quality-of-life improvements. "It is not unreasonable to expect that [the Industrial Internet] would boost productivity growth to the levels prevailing during the 1996-2004 [Internet Revolution] period when labor productivity growth averaged 3.1%," the report states. That level of productivity gain, the report notes, was twice the pace of the previous 25 years. If that pace of productivity gain could be restored and sustained through the Industrial Internet, by 2030 average worker income levels would rise by $20,000 in the U.S., or about 40% of today's U.S. per-capita GDP.

The report identifies many areas where the Industrial Internet will enhance productivity:

  • Nework Optimization--The optimization of intelligent, interconnected machines will allow for operational efficiencies at the network level. In transportation networks, for example, interconnected vehicles can be alerted to the presence, location, and designation of other vehicles in the network, allowing them to optimize their routing;
  • Maintenance Optimization--Access to machine maintance information across fleets, for example, can help planners understand where and how many replacement parts will be required, reducing inventory and improving machine reliability;
  • System Recovery--In the event of major storms or other disasters, networks of smart meters, sensors, and other devices can be used to quickly detect the biggest problems so that they do not cascade and cause worse problems;
  • Learning--The operational experiences of intelligent machines in a network can be aggregated to accelerate learning across the machine portfolio.

In order for these types of benefits to be realized, the report acknowledges, several conditions must be met. They include the investments needed to develop the required technologies and deploy the needed sensors, more robust cyber security systems needed to protect intellectual property and information, and the development of a strong talent pool that includes more data scientists, security specialists, and what the report calls "digital-mechanical engineers."

Do you agree with this optimistic view of the Industrial Internet? Are the benefits of productivity improvements likely to be offset by Industrial Internet and automation-related job losses?

Written by Jeff Moad

Jeff Moad is Research Director and Executive Editor with the Manufacturing Leadership Community. He also directs the Manufacturing Leadership Awards Program. Follow our LinkedIn Groups: Manufacturing Leadership Council and Manufacturing Leadership Summit


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