After the Internet revolution, it is now the turn of the IoT revolution, which will dramatically alter manufacturing, energy, agriculture, transportation, and other industrial sectors of the economy.

The Industrial Internet of Things (IIoT)is one of the major revolutionary technologies that have become a significant trend lately. This technology will drastically change the manner of user-machine interaction and machine to machine communication. A concept that refers to the bridging of all the machines or equipment present in the industrial ecosystem, it includes usage of big data, machine learning, and machine to machine communication, thereby including all the automated mechanisms in the processes.

IIoT has the potential to fill the gaps in the proficiency, performance of any industrial processes and gain better results in terms of revenue, output, and productivity.

The network for IIoT comprises of devices connected through sensors, embedded electronics, and software and network connectivity. The number of these devices increased from 12.45 billion in 2010 to 13.4 billion in 2015; this number is estimated to get doubled by 2021. The global Industrial Internet of Things market is projected to reach USD123.8 billion by 2021; the market is forecast to grow at a CAGR of 21 percent through 2016 to 2021.

The concept of IIoT has given birth to the fourth generation of industrial revolution. This concept will take the industry by storm and reconfigure the entire industrial ecosystem. This fourth generation revolution will use Internet and web-enabled software capable of handling large volume of manufacturing data; the face of future manufacturing.

There are also many reasons for manufacturers to adopt the IIoT. From energy management to operational efficiency and predictive maintenance, IIoT could save a company a lot of money. But manufacturers are a conservative bunch, and they can be a bit timid when it comes to upgrading to new technology. So if the industry as a whole is going to embrace this new uncharted territory, we need a champion of change.

And the group who could make the biggest impact and influence a total transformation toward IIoT is not a company's IT or OT team, and it is not the automation suppliers or the IoT technology vendors. It is the system integrators.

World Economic Forum Takes Initiative

Pierre Nanterme, President, Chairman and Chief Executive Officer, Accentura"The Industrial Internet will transform the basis of competition, requiring business leaders to shift from a focus on products and services to business outcomes. For the Industrial Internet to achieve its full potential, industry sectors will need to collaborate more closely with technology leaders and policymakers to put in place the standards and conditions required to encourage further investment."

Pierre Nanterme
President, Chairman and Chief Executive Officer,
Accentura

Dubbed the Industrial Internet (of Things), this latest wave of technological change will bring unprecedented opportunities, along with new risks, to business and society. It will combine the global reach of the Internet with a new ability to directly control the physical world.

Undoubtedly, the Industrial Internet is currently in its early stages. Many important questions remain, including how it will impact existing industries, value chains, business models and workforces, and what actions business and government leaders need to take now to ensure long-term success.

To address these and other questions facing business and government leaders, the World Economic Forum's IT Governors launched the Industrial Internet initiative at the Annual Meeting 2014 in Davos, Switzerland. During the last eight months, the project team has developed a guiding framework and conducted a series of research activities, including in-person workshops, virtual working group sessions, interviews of key thought leaders, and a survey of innovators and early adopters around the world.

Key Research Findings

The research concludes that the Industrial Internet is indeed transformative. It will change the basis of competition, redraw industry boundaries, and create a new wave of disruptive companies, just as the current Internet has given rise to Amazon, Google, and Netflix. However, the vast majority of organizations are still struggling to understand the implications of the Industrial Internet on their businesses and industries. For these organizations, the risks of moving too slowly are real.

Opportunities and Benefits

Our research reveals that disruption will come from new value creation made possible by massive volumes of data from connected products, and the increased ability to make automated decisions and take actions in real time. The key business opportunities will be found in four major areas:

  • Vastly improved operational efficiency (e.g., improved uptime, asset utilization) through predictive maintenance and remote management
  • The emergence of an outcome economy, fuelled by software-driven services; innovations in hardware; and the increased visibility into products, processes, customers, and partners
  • New connected ecosystems, coalescing around software platforms that blur traditional industry boundaries
  • Collaboration between humans and machines, which will result in unprecedented levels of productivity and more engaging work experiences

As the Industrial Internet gains broader adoption, businesses will shift from products to outcome-based services, where businesses compete on their ability to deliver measurable results to customers.

Delivering such outcomes will require new levels of collaboration across an ecosystem of business partners, bringing together players that combine their products and services to meet customer needs. Software platforms will emerge that will better facilitate data capture, aggregation, and exchange across the ecosystem. They will help create, distribute, and monetize new products and services at unprecedented speed and scale. The big winners will be platform owners and partners who can harness the network effect inherent in these new digital business models to create new kinds of value.

Research also shows that the Industrial Internet will drive growth in productivity by presenting new opportunities for people to upgrade skills and take on new types of jobs that will be created. The growing use of "digital labour" in the form of smart sensors, intelligent assistants, and robots will transform the skills mix and focus of tomorrow's workforce.

While lower-skilled jobs, whether physical or cognitive, will be increasingly replaced by machines over time, the Industrial Internet will also create new, high-skilled jobs that did not exist before, such as medical robot designers and grid optimization engineers. Companies will also use Industrial Internet technologies to augment workers, making their jobs safer and more productive, flexible, and engaging. As these trends take hold, and new skills are required, people will increasingly rely upon smart machines for job training and skills development.

Risks and Challenges

To realize the full potential of the Industrial Internet, businesses and governments will need to overcome a number of important hurdles. Chief among them are security and data privacy, which are already rising in importance given increased vulnerabilities to attacks, espionage, and data breaches driven by increased connectivity and data sharing. Until recently, cybersecurity has focused on a limited number of end points. With the advent of the Industrial Internet, these measures will no longer be adequate as the physical and virtual worlds combine at a large scale. Organizations will need new security frameworks that span the entire cyber physical stack, from device-level authentication and application security to system-wide assurance, resiliency, and incidence response models.

Another crucial barrier is the lack of interoperability among existing systems, which will significantly increase complexity and cost in Industrial Internet deployments. Today's operational technology systems work largely in silos. However, in the future, a fully functional digital ecosystem will require seamless data sharing between machines and other physical systems from different manufacturers. The drive towards seamless interoperability will be further complicated by the long life span of typical industrial equipment, which would require costly retrofitting or replacement to work with the latest technologies.

In addition, other notable barriers and risks include uncertain return on investments on new technologies, immature or untested technologies, lack of data governance rules across geographic boundaries, and a shortage of digital talent. Overcoming these challenges will require leadership, investment, and collaborative actions among key stakeholders.

To seize near-term opportunities, capitalize on the long-term structural shift, and accelerate the overall development of the Industrial Internet, the project team at the World Economic Forum recommended that the technology providers, technology adopters, public policymakers, and all stakeholders would need to work together to take this to its logical conclusion.


 

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