- Report assesses the business and socio-economic opportunities and risks expected in latest wave of technological change
- The Industrial Internet of Things to redraw industry boundaries and create a new wave of disruptive companies
- Vast majority of organizations still do not understand the full impact on their business and industries
- Download the report here
Davos-Klosters, Switzerland, 22 January 2015 – The World Economic Forum today launched the Industrial Internet of Things: Unleashing the Potential of Connected Products and Services. The report demonstrates that the industrial internet of things will dramatically change manufacturing, energy, agriculture and other industrial sectors of the economy that, together, make up two-thirds of the global gross domestic product (GDP). However, the vast majority of organizations pursuing industrial internet initiatives don’t understand the implications for their business and industries.
The report, written in collaboration with Accenture, explores the impact the industrial internet of things will have on existing industries, value chains, business models and workforces. The key business opportunities will be found in four major areas:
- Improved operational efficiency, the most near-team and incremental benefit, achieved through predictive maintenance and remote management
- The emergence of the outcome economy, the large-scale shift from selling products or services to selling measurable outcomes
- New connected ecosystems, where companies increasingly rely on business partnerships built on software platforms to optimize on delivering outcomes to customers
- Increased levels of collaboration between humans and machines resulting in higher productivity, flexibility and safer work environments
“We have all experienced the transformative power of the internet in the past 10 to 15 years. But this has just been the beginning. Just as digitization allowed us to completely reimagine the media industries, the deployment of sensors is bringing the same level of transformational opportunity across nearly every sector,” said Derek O’Halloran, Director and Head of Information Technology Industries, World Economic Forum. “New partnership-based business models are emerging, driven by platforms that connect products, data and people – creating whole new markets for our future economy. Many companies are already making the shift, from selling products to providing the outcomes that customer really care about.”
Despite the great promise and new opportunities of the industrial internet of things, many factors could hinder its future growth. Among these are security, interoperability, policies for data and talent gaps. To overcome these hurdles and realize the full potential of the industrial internet of things, the report supports the need for business, technology and government stakeholders to take immediate actions which include, but are not limited to, the following:
- Technology providers should advance interoperability through test-beds and begin to take inventory and share best security practices with specific focus on security
- Technology adopters should develop an overall business strategy to take advantage of the industrial internet of things and seek ecosystem partners
- Public policy-makers should re-examine and update data protection and liability policies
- All stakeholders need to collaborate to implement new training programmes and encourage reskilling for high-demand job categories
“The industrial internet of things will not only boost productivity and efficiencies but create major growth opportunities as the value of data is unlocked to support new solutions and services,” said Paul Daugherty, Chief Technology Officer, Accenture. “To capture this growth, companies need to be bold in building new business models, partnerships and talent that, together, mark a decisive break from the way they do business today.”
The findings of the report will be presented and discussed at a session on 22 January 2015 at the 45th World Economic Forum Annual Meeting. More than 2,500 participants from over 140 countries, including more than 40 heads of state or government, are gathered in Davos-Klosters for the Annual Meeting, held from 21 to 24 January.
The World Economic Forum is an international institution committed to improving the state of the world through public-private cooperation in the spirit of global citizenship. It engages with business, political, academic and other leaders of society to shape global, regional and industry agendas.
Incorporated as a not-for-profit foundation in 1971 and headquartered in Geneva, Switzerland, the Forum is independent, impartial and not tied to any interests. It cooperates closely with all leading international organizations (www.weforum.org).