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Report Home

<Previous Next>
  • 1. Executive summary
  • 2. General findings
    • 2.1 The state of the market
    • 2.2 The four phases of the Industrial Internet evolution
    • 2.3 Key near-term opportunities and benefits
    • 2.4 Major challenges and risks
  • 3. Convergence on the outcome economy
    • 3.1 From connected products to software-driven services
    • 3.2 The emergence of the outcome economy
    • 3.3 Delivering outcomes through connected ecosystems and platforms
  • 4. Shift towards an integrated digital and human workforce
    • 4.1 Enhancing productivity and work experience through augmentation
    • 4.2 Creating new jobs in hybrid industries
    • 4.3 Reskilling for digital industries
  • 5. Recommended actions for stakeholders
  • Appendix A: About the research
  • Appendix B: Glossary
  • Acknowledgments
Industrial Internet of Things Home Previous Next
  • Report Home
  • 1. Executive summary
  • 2. General findings
    • 2.1 The state of the market
    • 2.2 The four phases of the Industrial Internet evolution
    • 2.3 Key near-term opportunities and benefits
    • 2.4 Major challenges and risks
  • 3. Convergence on the outcome economy
    • 3.1 From connected products to software-driven services
    • 3.2 The emergence of the outcome economy
    • 3.3 Delivering outcomes through connected ecosystems and platforms
  • 4. Shift towards an integrated digital and human workforce
    • 4.1 Enhancing productivity and work experience through augmentation
    • 4.2 Creating new jobs in hybrid industries
    • 4.3 Reskilling for digital industries
  • 5. Recommended actions for stakeholders
  • Appendix A: About the research
  • Appendix B: Glossary
  • Acknowledgments

2. General findings:

2.2 The four phases of the Industrial Internet evolution

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As depicted in Figure 1, research shows that the future evolution of the Industrial Internet will likely follow four distinct phases. Phases 1 and 2 represent immediate opportunities that drive the near-term adoption, starting with operational efficiency. These activities are happening now, and will likely accelerate in the next two years. 

Phases 3 and 4 include long-term structural changes that are roughly three years away from mainstream adoption. Survey results support the view that the impact of the Industrial Internet is incremental in the near-term (see Section 2.3 for details) but transformative over the long-term: 72% of respondents believe that the development of the Industrial Internet will be disruptive to their businesses and industries, and more (79% of respondents) think those disruptions will occur within the next five years. These disruptions will manifest themselves in Phases 3 and 4 in the form of the outcome economy and an integrated human-machine workforce.  

The outcome economy will be built on the automated quantification capabilities of the Industrial Internet. The large-scale shift from selling products or services to selling measurable outcomes is a significant change that will redefine the base of competition and industry structures. Delivering outcomes will require companies to forge new ecosystem partnerships centred on customer needs rather than individual products or services. Because of the rising importance in data, software and platforms, incumbent players will need to expand their capabilities and ecosystems in these areas to compete in this new marketplace. (See Section 3, “Convergence on the Outcome Economy”, for more details.)  

As the Industrial Internet becomes more ingrained in every industry, it will ultimately lead to a pull-based economy characterized by real-time demand sensing and highly automated, flexible production and fulfilment networks. 11 This development will call for a pervasive use of automation and intelligent machines to complement human labour (machine augmentation). As a result, the face of the future workforce will change dramatically, along with the skill sets required to succeed in a much more automated economy. (See Section 4, “Shift towards an Integrated Digital and Human Workforce”, for more details.)  

11
11 Bollier, David. “When Push Comes to Pull: The New Economy and Culture of Networking Technology”. The Aspen Institute. 2006. http://www.aspeninstitute.org/sites/default/files/content/docs/cands/2005InfoTechText.pdf.
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