General Electric, arguably the world’s biggest maker of diverse machinery from home appliances to CAT scanners to jet engines, released a new study showing that connecting devices to the “industrial internet” could boost global GDP to the tune of $10 trillion to $15 trillion by 2030.
That’s a very big number — roughly the size of the US economy. The industrial internet is the manufacturing giant’s take on the “internet of things” in which myriad devices — from smartphones to sensors in everything from wrist bands to traffic cameras — communicate via machine language with each other without requiring human intervention.
The report, authored by GE Chief Economist Marco Annunziata and GE Director of Global Strategy and Analytics Peter C. Evans, of course plays to GE’s strengths. How better to boost productivity than by automating the communication and control of all those already-productive tools?
A couple key takeaways from the report:
- Connected machines could eliminate up to $150 billion in waste across industries
- a 1 percent increase in efficiency could save up to $30 billion in aviation, $6 billion in power generation and $63 billion in healthcare costs.
More data = better analytics
Knitting together all these machines and devices, the authors wrote, provides a bigger, better pool of aggregated information that will enable the harnessing of ”physics-based analytics, predictive algorithms, automation and deep domain expertise in material science, electrical engineering and other key disciplines.”
And, connecting machines also connects the people who run them “whether they be at work in industrial facilities, offices, hospitals or on the move, at any time to support more intelligent design, operations, maintenance a well as higher quality service an safety.”
Clearly, GE is betting big on the industrial internet notion, as The New York Times reported recently. Of course, since GE has dogs in all those fights — aviation, power generation, heathcare equipment — it’s well positioned to talk on the topic but is hardly neutral on it. Whenever a company chats up automation-fueled productivity gains, the dark side tends to be job loss. On this touchy topic, Annunziata and Evans wrote:
“But what about labor? Will a further wave of productivity-enhancing innovation destroy jobs? In the current situation of already excessively high unemployment in the US and other advanced economies, this is a crucial issue. There is no doubt that further innovation will make some jobs unnecessary—for example to the extent that some processes can be automated. But as some of the old jobs are no longer necessary, new, better jobs will be created.”