Productivity gains resulting from the “internet of things” could add between $10 trillion and $15 trillion to global GDP over the next 20 years, according to a new study from General Electric (GE).
The manufacturing giant reckons the “industrial internet”, as it terms the phenomenon, could find direct application in sectors accounting for more than $32.3 trillion in global economic activity, but expects this figure to reach about $82 trillion – one half of global economic output – by 2025.
As noted in the study, an efficiency improvement of just 1% brought about by the use of the industrial internet would yield terrific gains in a variety of sectors.
In the aviation industry, for instance, a 1% improvement in fuel savings would be worth about $30 billion over the next 15 years, while the same efficiency improvement in the global gas-fired power plant fleet could lead to savings of about $66 billion in fuel consumption.
The global health industry could realize savings of more than $63 billion by reducing process inefficiencies by 1%, but the most eye-catching figure is the $90 billion that GE (Fairfield, USA) believes could be slashed from capital expenditure in upstream oil and gas exploration and development, simply through a 1% improvement in capital utilization.
GE says the savings are possible by combining three elements of the industrial internet: “intelligent machines”, “advanced analytics” and “people at work”.
While the industrial internet starts with the embedding of sensors in an array of machines, it is the collection and analysis of data this process allows that generates much of the savings, with an additional boost provided by connecting people at work or on the move.
Using the example of the aviation industry, GE says that each of the three pieces of rotating equipment in a single jet engine could be instrumented and monitored separately.
With approximately 43,000 commercial jet engines in service, it asks readers to “imagine the efficiencies in engine maintenance, fuel consumption, crew allocation and scheduling when ‘intelligent aircraft’ can communicate with operators”.
GE’s bullishness about the industrial internet is not altogether surprising given its status as probably the world’s biggest maker of machinery across a range of industries.
Nevertheless, it acknowledges that if its vision is to become reality there needs to be a sustained effort in technological innovation, with considerable investments in the deployment of the necessary sensors, instrumentation and user-interface systems.
GE also calls for a robust cyber security system and greater protection of sensitive information and intellectual property, as well as the development of talent and creation of so-called “cross-cutting roles” that combine mechanical and industrial engineering.