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Summary:

The emergence of Industrial Internet is not only going to make older industries more efficient, by making them data-smart, but in addition this will lead to more opportunities and create new jobs, GE economists argue in a new report, The Industrial Internet@Work.

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The ongoing trend of digitization and connectedness has finally entered the industrial sector and that is about squeeze out inefficiencies from the manufacturing and industrial processes. That will not only lead to more productivity, but will also lead to creation of a new jobs, according to The Industrial Internet@Work, a new report from GE written by GE Chief Economist, Marco Annunziata, and GE’s Director of Global Strategy and Analytics, Peter C. Evans.

GE’s idea of Industrial Internet is a marriage of data (much of it coming from machines) and analytics coming from their connected machines. The argument is that while they (GE and manufacturers) have pushed the material and physical sciences for their products, connectivity, data and the ability to analyze that data into actionable information is the next way forward to make industries more efficient. And creating a more responsive and nimble workforce that is in tune with these changes is the next step.

The report authors argue that industries such as power, aviation, railways and healthcare (four areas in which GE is a dominant force), the digitization allows the businesses to become more realtime which in turn transforms how the workforce responds to the needs of the businesses. Maintenance crews don’t have to work on a rigid time schedule but instead be more nimble and responsive in-tune with the data and information coming out of the machines that are part of the new industrial internet.

Instead just reacting, the businesses can take a more proactive approach to managing machines, according to the report. More information about turbines or engines means, less guess work and less time wasted, which in turn will allow the crews to focus on other activities, such as upgrading their own skills, argued Annunziata in a conversation earlier this week. For instance, he points out that in the power industry alone, 52 million man-hours are spent every year on maintenance. Smart industrial machines and software can help power companies save about $7 billion a year.

Annunziata points out that these changes will start to roll out over next three to five years, we are going to start seeing the impact of this data-informed Industrial landscape. GE has invested close to a $100 million in Pivotal, a company spun out from EMC and also includes parts of VMware, another EMC-owned company, in order to help create new software applications for this Industrial Internet. GE’s Bill Ruh will tell us more at our Mobilize 2013 conference later this month.

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WHAT ABOUT THE JOBS?

GE argues that the Industrial Internet will create new jobs, thanks to overall boost it will bring in terms of economic growth but also in terms of the new types of job opportunities such as a new class of digital-mechanical engineers along with data scientists, user interface experts, and business operations data analysts. In addition, the authors of the report argue that the current workers will become fluent in emerging technologies.

Annunziata didn’t deny that someone who has worked for thirty years in a specific industry will be challenged, but at the same time there are many veterans who are about to retire and with them, a lot of institutional knowledge (or experience) is going to walk out of the door. A lot of companies need to prepare for that eventuality too.

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He went on to point out that every time there is a technology shift, there are doubts and fears about jobs, but in the end the changes result in new opportunities and redefinition of the jobs and the kind of jobs. This means the companies need to get in on the re-training of their current workforces for this new digital and data driven reality. As companies get more efficient, they can spend their dollars on newer innovations, which in turn lead to more jobs, a trend they say has borne out in the past and will continue in the future as well.

“Workers will be racing with the new, intelligent machines of the Industrial Internet, not against them—more Iron Man than the Charlie Chaplin of Modern Times,” the authors write in the report.

While I laud the optimism of the authors, I fear that the industrial internet and the efficiency it proposes to bring to the market will lead to a job contraction in the near term, especially for those who are unable to adapt to this new data-driven world. We are not prepared as a society for this Data Darwinism at work!

PS: We will talk to Beth Comstock about the Industrial Internet and importance of design and experience on this new Industrial Internet, at our Roadmap 2013 conference on November 5/6 in San Francisco.

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  1. rode through many bangalore neighborhoods today, hundreds of small shops selling small things and services, probably three or four employees per shop, young and old .. great neighborhood feeling, all at human scale ..

    then went to a Metro, the german Walmart, now in india .. so sterile, not that many employees, dehumanizing lighting and environment .. but we call it progress ..

    is there a connection to the subject of this article?

    i think so …

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  2. Security of internet connected devices has to be a real concern for enterprises. If devices are connected to the internet, then a Stuxnet style worm/attack (for national or corporate espionage or by anarchist hackers) becomes an even greater concern.

    Will vendors have long term support for their firmware? Where does liability lay when attacks occur?

    That said, vendors, in theory, can get a lot more information about their products and product actual usage in the field. This information, in turn, could be fed back into the design process to eliminate or improve common points of failure.

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