- Michael Lind: The industrial Internet will shatter old systems and create opportunities
- New laws and regulations will be needed in the new world of machine communications
GE introduced the now-widespread term "the industrial Internet" for the subset of the emerging Internet of things that includes manufacturing, transportation and other parts of the productive economy. The industrial Internet includes hardware, in the form of sensors embedded in assembly lines, appliances, and autonomous vehicles like robocars and civilian and military drones. It also generates enormous amounts of information — big data — that can be sorted and analyzed for purposes of product and process innovation, repair and marketing.
Business models are likely to be transformed in some industries by the industrial Internet. In old-fashioned manufacturing, maintenance was often a secondary goal to assembly, and was often carried out by other businesses. Companies, and jobs, could usually be assigned to manufacturing or service sectors. But now diagnostic and prognostic technology embedded in products and communicating over networks can permit manufacturers to continuously monitor products and correct problems in advance. The result of this infrastructure is "servitization" -- that is, a blend of manufacturing and services in a single firm. The company can be responsible not only for the creation of a product, but also for its lifetime care and, in some cases, its ultimate recycling.
Here are some examples. The agricultural equipment company John Deere has a telematics system that allows farmers to track machine productivity and schedule preventive maintenance. The three major aircraft engine manufacturers — GE, Pratt & Whitney and Rolls Royce — offer a "power by the hour" model in which, instead of selling engines, the manufacturers retain ownership and lease them to airlines, to enable servicing throughout the engine's lifetime.
Preventive monitoring and maintenance need not be a monopoly of high-power machines. Similar innovations may break down traditional barriers between industry and medicine. Imagine the benefits for health — and the potential savings -- if pacemakers and other medical implants or wearable medical sensors were in constant contact with a network of hospitals and doctors.
The promise of the industrial Internet can only be realized if smart devices are talking to each other in the same language. A major milestone was passed recently, when the Industrial Internet Consortium was founded by GE, Cisco, AT&T, IBM and Intel. With the support of the federal government, this and other collaborative and commercial efforts will help to avert a high-tech Tower of Babel.
With new opportunities, to be sure, come new threats. Cyberattacks on the networks of American government and industry are daily news. The proliferation of communications among products and infrastructure grids will make it all the more imperative to ensure the safety of networks from crippling sabotage or attack.
The industrial Internet raises privacy issues, as well. Should manufacturers, in the interest of preventive maintenance, be allowed to track your movements by continuously monitoring your appliances? Should the government? ("I was shocked and heartbroken when I learned my toaster was a spy.") New laws and new regulations will be needed in the brave new world of machine-to-machine communication.
The rise of the industrial Internet may not lead to the creation of great numbers of jobs for humans, as opposed to robots. But the entire economy will benefit from the resources freed by increased efficiency and reduced waste. The industrial Internet can boost our exports, as a revolution largely forged in the United States spreads to the rest of the world. And just as the earlier version of the Internet created entirely new industries, like online marketing and social media consulting, new occupations that we cannot even imagine today are certain to emerge as machines start talking to machines.
The industrial Internet will not solve all our economic problems. But at least it can give the dark clouds confronting the economy a silver lining. Make that a silicon lining.