If you still need more evidence that the Industrial Internet and big data analytics are driving a revolution in manufacturing, productivity and services, take a closer look at the 2013 Global Innovation Barometer released last week. The Barometer, which surveyed 3,000 executives from 25 countries, found that 53 percent of respondents considered the ability to mine data inside and outside their company crucial to successful innovation, and 63 percent said that their firm was already developing ways to use big data for innovation. The biggest champions of big data were executives from dynamic developing markets in Mexico, Brazil, Turkey, and Nigeria.
That’s good news for anyone keeping their fingers crossed over global economic growth. “The deeper meshing of the digital world with the world of machines holds the potential to bring about profound transformation to global industry, and in turn to many aspects of daily life, including the way many of us do our jobs,” write GE’s Peter C. Evans and Marco Annunziata in their recent report on the Industrial Internet and the rise of big data. “These innovations promise to bring greater speed and efficiency to industries as diverse as aviation, rail transportation, power generation, oil and gas development, and health care delivery. It holds the promise of stronger economic growth, better and more jobs and rising living standards, whether in the US or in China, in a megacity in Africa or in a rural area in Kazakhstan.”
The Industrial Internet that Evans, director of global strategy and analytics at GE, and Annunziata, GE’s chief economist, talk about is a global network linking people with “intelligent” machines that generate gigabytes of useful data about temperature, pressure or vibrations, and powerful computers and software that can analyze it. “Connecting and combining these elements offers new opportunities across firms and economies,” they write.
Evans and Annunziata estimate that in the U.S., the Industrial Internet could boost annual productivity growth by 1 to 1.5 percent. As innovation spreads globally, if the rest of the world could secure half of the U.S. productivity gains, the Industrial Internet could add $10-15 trillion to global GDP over the next 20 years, the size of the entire U.S. economy today. “In today’s challenging economic environment, securing even part of these productivity gains could bring great benefits at both the individual and economy-wide level,” they say.
GE, for example, has already rolled out Industrial Internet services applications that helped improve the operations of everything from hospitals, to railroads, and oil rigs. Last week, the company reported that in the last quarter of 2012, revenue from services increased by 4 percent and services backlog grew to $157 billion. That is good business.