The industrial world is set to embrace the internet and digitisation as companies seek to return to the levels of productivity gains they have not seen in a decade.
William Ruh (pictured), CEO of GE Digital, said today during his keynote at Congress that the last decade was more about the consumer internet. “But by and large if you look at the industrial world, it really didn’t take advantage of any of this technology in a meaningful way.”
The reason for this shift, he said, is that for 20 years from 1990, we saw 4 per cent productivity gains every year in the industrial world. “Then 2011 happened, and since then we have had 1 per cent productivity gain. So if you are an industrial business today you are trying to get back to that 4 per cent productivity,” Ruh said.
Chuck Robbins, Cisco CEO, agreed, noting that almost every company in the world is thinking about how to use technology to fundamentally change their business models for the future.
Robbins believes we’re on the front end of the most phenomenal technology revolution that we’ve ever seen, he said. “The pace of change is something we’ve never witnessed before.”
For example, he said, digitisation will boost the number of connected devices from 18 billion to 50 billion by 2020, and to hundred of billions of connections in the decade after that, so the opportunities are vast.
GE’s Ruh warned that if industrial companies do not embrace digitisation, they will not be able to compete in the next decade. If they can figure out how to capture the efficiency benefits, “this is probably the biggest opportunity we have seen in two to three decades”, he added.
While the last decade was all about the consumer and enterprise internet, “the next decade is the industrial internet,” he said.
Robbins noted that governments in many cases are leading the thought process and developing digitisation strategies to address everything from economic growth to job creation to more efficient travel.
He pointed to initiatives Cisco is carrying out in China, India, France, Italy, Spain and the UK. “When it comes to healthcare, education and other citizen services, these country leaders actually get it. They are driving a very aggressive agenda, which is great to see.”
Companies are also starting to recognise they have a societal obligation to re-skill people being disrupted by automation technologies.
“The good news is that we’re getting ahead of the discussion about what we need to do either retrain employees, so they are better equipped for the jobs associated with this revolution, or educate them to do different jobs,” he said.
Historically, corporations haven’t thought about that early enough, he said.