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Industrial Internet: Big Opportunity, Daunting Challenges

World Economic Forum Report Surveys Global Executives

We heard for many years how developing nations would be able to develop mobile-phone networks quickly, perhaps even leapfrog developed nations, because their lack of traditional, wired networks would not inhibit them from deploying the new technology.

Now there is talk of history repeating itself with the Industrial Internet--a key aspect of the emerging Internet of Things. For example, Guo Ping, Deputy Chairman of the Board of Chinese electronics giant Huawei, said in a recent report from the World Economic Forum, "The Industrial Internet will afford emerging markets a unique opportunity to leapfrog developed countries in digital infrastructure," says a guy from Chinese giant Huawei in this report.

To some degree the first prediction turned out to be true, as mobile communications have become well established in many developing countries, and mobile phones the first phones ever used by perhaps 2 billion people. Our ongoing research at the Tau Institute shows that, indeed, developing nations in several regions are the most dynamic among all nations of the world.

Unleashing Potential
Now, with the Industrial Internet, no less a pontificator than Salesforce CEO Marc Benioff pronounced the IoT "ground zero for a new phase of global transformation...reshaping industries," in the same WEF report.

This particular report, entitled "Industrial Internet of Things: Unleashing the Potential of Connected Products and Services," cites operational efficiency, connected ecosystems, software platforms, collaboration between humans and machines, and something called the outcome economy as the key opportunities afforded by the Industrial Internet.

("Outcome economy" is some mumbo-jumbo invented by the report's collaborator, Accenture, and seems to mean that feedback from the IoT will provide companies with new insights that let them create products and services that will better meet customers' outcomes. Perhaps pharmaceutical companies in the past, for example, were unclear that their customers wanted to feel better.)

In any case, the touted new efficiencies of the IoT in general and the Industrial(ized) Internet in particular do seem to hold promise to bring new productivity--and if history is a guide, economic growth--to nations that move toward the IoT aggressively.

Healthy Growth
Economic growth without increased economic parity and social development will be the empty calories of this new global development engine: if bigger just means fatter, then nations will be hurting themselves over the long term.

This is one of our concerns about recent economic growth in the Philippines, for example. It's widely reported that the administration of President Noynoy Aquino--which runs from 2010-2016 in the country's single-term presidential system--has produced rapid economic growth currently running at 6 to 7 percent annually, trailing only China among Asian nations.

And our most recent trip to Metro Manila revealed significant infrastructure improvements at its airport and surrounding highways; a number of new high-end hotels, condominium complexes, and malls; slightly improving bandwidth; much economic development in areas where new agreements have allowed the US military to return in force; and some increasing prices that indicate a growing economy. But the country's familiar poverty remains entrenched in its cities and provinces, education remains terribly underfunded compared to developed-nation standards, and it doesn't seem clear that income disparity is being reduced on an overall basis.

We've seen similar patterns in other nations in Southeast Asia, and from reports by associates elsewhere.

There has been vibrant residential and commercial construction growth in Thailand over the past decade, along with dynamic pockets of innovative activity, for example, even as a severe, underlying socio-political conflict threatens to undo

Recent inflows of foreign investment into Indonesia, given the nation's still-recent status as a member of the world's largest 20 economies, cannot on their own significantly improve an average income that's about one-third that of neighboring Malaysia. Our research also shows Indonesia as being among the least aggressive technology adopters in the region and the world.

In Africa, we've reached out to the dynamic, innovative community in Nigeria, technology entrepreneurs in Kenya and Tanzania, and been apprised of new developments in South Africa. Yet entrenched poverty, factional violence, and a lack of physical and electronic infrastructure remain primary conditions there.

We've heard tales of personal frustration with the overall state of things in some countries of the Middle East and Latin America as well.

Ideas & Recommendations
So what should be done to facilitate strong socioeconomic growth in developing nations via the Industrial Internet?

Predictive maintenance, remote asset management, and improved working conditions are key areas cited in the WEF report. And several obstacles to improving things in all countries--developed as well as developing--were cited by the group of hundreds of high-level global executives (technical and non-technical) surveyed for this report.

The hurdles include such serious concerns as a lack of vision and leadership, a lack of understanding of values among management or C-level executives, a lack of proven business models (e.g. outcome-based revenue sharing or profit sharing), the thought that the rapid evolution of the technology is causing companies to delay large investments, heavy capital requirements, and the need for business process change.

That's a daunting list. Add to it the the "urgent need" (in the report's words) for improved, focused education throughout the world to develop a workforce equal to the challenges and opportunities offered by the Industrial Internet. An amazing 91% of executives surveyed said the world agreed with the statement that "new modes of education and training such as continuous training and  certifications) will be required to meet the talent demand in the future digital job market."

The report recommends that technology providers, technology adopters, and public policymakers unite to invest in strategic research and development, collaborate on "lighthouse" projects, and "accelerate digital reskilling" to address the challenges. Public policymakers are also encouraged to clarify data regulations, update industry regulations, invest in digital infrastructure, and raise awareness of the challenges and opportunities of technology among their colleagues.

Good governance is a staple of software deployment. Good government is the staple of strong, thriving societies. We view the challenges to public policymakers to be the most important catalysts for positive change, as cited in this report and as a general rule.

Technology marches forward, enlightened enterprises and consumers eventually lead all technology buyers toward new horizons, but nothing moves forward in societies plagued by weak leadership and the corruption and violence that comes with it.

Let's all get to work.

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More Stories By Roger Strukhoff

Roger Strukhoff (@IoT2040) is Executive Director of the Tau Institute for Global ICT Research, with offices in Illinois and Manila. He is Conference Chair of @CloudExpo & @ThingsExpo, and Editor of SYS-CON Media's CloudComputing BigData & IoT Journals. He holds a BA from Knox College & conducted MBA studies at CSU-East Bay.

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