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Wednesday, August 27, 2014

Can the Industrial Internet Pave the Way for a New Industrial Revolution?

This infographic shows GE predictions for a fully integrated Industrial Internet’s impact on GDP. Click to enlarge.

As manufacturing equipment and tools become increasingly more sophisticated and “smart,” the margin for increasing efficiency becomes ever narrower. The law of diminishing returns has caused innovators to search for different areas within manufacturing, including supply chain, collaboration and automation, that may play a more important – and cost-effective – role in improving those margins.

General Electric (GE) at the end of November made an announcement that it is placing a big bet on the Internet as a major player in this drive to efficiency. In a report entitled “Industrial Internet: Pushing the Boundaries of Minds and Machines,” the company sketched out the concept of an industrial system of connectivity for machines and industrial equipment. Authors Peter C. Evans and Marco Annunziata described the benefits of such a system: “The world is on the threshold of a new era of innovation and change with the rise of the Industrial Internet. It is taking place through the convergence of the global industrial system with the power of advanced computing, analytics, low-cost sensing and new levels of connectivity permitted by the Internet.”

The Industrial Internet is not a new idea. Originally called the Internet of Things by technology pioneer Kevin Ashton, who introduced the concept in 1999, it says while the Internet is responsible for connecting users to large quantities of data, that data originates primarily from human beings — fallible human beings. Why can’t high-tech machines, which generate immense amounts of data in their daily functions, produce information for the Internet, to be used by other machines and human beings to better the behavior and efficiency of machines?

A few days after the release of the Industrial Internet paper, GE raised the stakes. Standing in front of a jet engine during GE’s Minds and Machines conference, CEO Jeff Immelt announced the company will be investing money in creating machines that gather and analyze data on a system very much like the Internet of Things.

While pointing out that GE has tens of thousands of “connected machines,” Immelt gestured to the jet engine near him and said the goal was to have that connected to the Industrial Internet. A ton of data can be generated from each flight, but this data is going unrecorded and unused, to the deficit of everyone. As Immelt pointed out during his keynote, the jet engine had been affixed with 20 sensors to collect about 1 terabyte of information in a one-way, cross-country flight.



Whether the information is about a flight or the daily operation of a piece of industrial machinery, it could provide designers, engineers and research and development scientists with data to improve future design. Immelt noted that if the jet engine’s fuel efficiency were improved only 1 percent, GE’s airline industry customers could save as much as $2 billion a year in fuel costs. The company’s estimates for other industries are likewise staggering:

  • Gas-fired power generation: $66 billion saved with 1 percent fuel savings
  • Health care: $63 billion saved with a 1 percent reduction in system inefficiency.
  • Oil and gas exploration and development: $90 billion saved with 1 percent reduction in capital expenditures.
  • Freight rail: $27 billion saved with a 1 percent reduction in system inefficiency.

Immelt announced a GE investment of $100 billion in the Industrial Internet, which the company estimates could add “from $10 to $15 trillion to global GDP.” Over 20 years, the Industrial Internet could boost US average incomes by 25 to 40 percent.

“With better health outcomes at lower cost, substantial savings in fuel and energy, and better-performing and longer-lived physical assets, the Industrial Internet will deliver new efficiency gains, accelerating productivity growth the way that the Industrial Revolution and the Internet Revolution did,” GE’s Industrial Internet report said. “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 U.S. or in China, in a megacity in Africa or in a rural area in Kazakhstan.”

The implications are huge. Perhaps a little too huge. Immediately following the announcement, critics chimed in to criticize GE’s method and predictions.

Interoperability is one of the large hurdles. Basically, an Internet of Things has no set standards. As O’Reilly Radar mused, “Should a GE jet engine interoperate with a jet engine from Pratt and Whitney? What would that mean, what efficiencies in maintenance and operations would that entail?”

Many companies have already begun developing their own data standards and protocols, and proprietary information encourages these companies not to build in interoperability, despite customer safety and preference for interactive standards. Continued O’Reilly, “Self-driving cars have the potential to be much safer than human-driven cars; but they become astronomically safer if your Toyota can exchange data directly with the BMW coming in the opposite direction.”

Even if appliance, machine tool and vehicle makers alike decide on an interoperability standard, it can be difficult to convince companies to sign on to the smart grid concept. Green Tech Media notes that while the smart grid is attractive, setting up the IT and infrastructure to run it poses a barrier to entry in terms of cost and resources. “Amidst a general slowdown in North American smart meter deployments expected next year, smaller municipal and cooperative utilities stand out as a relatively untapped sector — and one that will need some help in managing the IT … at a cost commensurate with the smaller scale of their projects, in the tens or hundreds of thousands of meters, rather than millions.”

While acknowledging the difficulties of pursuing an Industrial Internet, others remain more enthusiastic about the concept, in part because of disappointment with how the Internet has evolved. Tim O’Reilly, founder of O’Reilly Media, publisher of O’Reilly Radar, told The Economic Times that the top IT talent in the world today is more concerned with convincing people to click ads.

“[Thanks to the Industrial Internet], there is a growing sense in the global tech community that we should be doing much more important work than filtering social gossip to target ads,” he said, adding, “Our world has higher priorities and we want to be involved in solving them.”

Is the Industrial Internet a realistically achievable goal? Tell us what you think in the comments below.

Brian Lane



  1. LuAnn Kremer says:

    Maybe I’ve read too much Science Fiction, but can you spell HAL?

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