- Tech & Innovation
GE Report: Industrial Internet Could Add $10-15 Trillion to Global GDPNovember 26, 2012
GE releases its latest report on the Industrial Internet and how Internet-connected machines can bring about exponential gains in efficiency.
Just as the Industrial Revolution and the Internet Revolution changed the world and its ability to create things, so too will this latest revolution called the Industrial Internet, write Marco Annunziata, Chief Economist, GE and Peter C. Evans, Director of Global Strategy and Analytics, GE.
In their white paper “Industrial Internet: Pushing the Boundaries of Minds and Machines” released Monday, the authors found that enabling Internet-connected machines to communicate and operate automatically can bring substantial efficiency gains. ”If this could boost annual productivity growth by 1-1.5 percentage points, with partial diffusion to the rest of the world and considering the power of compounding over the next twenty years, it could add $10-15 trillion to global GDP, about the current size of the US. economy,” they write.
These latest 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”.
In the chart below titled “The Power of 1 Percent,” the authors estimate the benefit of one percent improvement and the value it might yield over 15 years.
The “marriage of machines and analytics” is at the core of the Industrial Internet, the authors write, which “encompasses traditional approaches with new hybrid approaches that can leverage the power of both historic and real-time data with industry specific advanced analytics”.
As was reported recently in The New York Times, the Industrial Internet is part of a long-term strategy for GE, dating back to discussions in May 2009 during the worst of the financial crisis. According to the report, GE Chief Executive Officer Jeff Immelt and his staff, decided the Industrial Internet “built on G.E.’s strength in research and could be leveraged across its varied industrial businesses, adding to the company’s revenue in services, which reached $42 billion last year.”
The report urges a “sustained effort in technological innovation” along with investment, cultivating a strong talent pool that creates “digital-mechanical engineers” and a cyber security system that can protect against infiltration of intellectual property and sensitive data.