Marco Annunziata: Welcome to the age of the industrial internet

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Einstein said that “I never think about the future —
it comes soon enough.” And he was right, of course. So today, I’m here to ask you to think of how the future is happening now. Over the past 200 years, the world has experienced two major waves of innovation. First, the Industrial Revolution brought us machines and factories, railways, electricity, air travel, and our lives have never been the same. Then the Internet revolution brought us computing power, data networks, unprecedented access to information and communication, and our lives have never been the same. Now we are experiencing another metamorphic change: the industrial Internet. It brings together intelligent machines, advanced analytics, and the creativity of people at work. It’s the marriage of minds and machines. And our lives will never be the same. In my current role, I see up close how technology is beginning to transform industrial sectors that play a huge role in our economy and in our lives: energy, aviation, transportation, health care. For an economist, this is highly unusual, and it’s extremely exciting, because this is a transformation as powerful as the Industrial Revolution and more, and before the Industrial Revolution, there was no economic growth to speak of. So what is this industrial Internet? Industrial machines are being equipped with a growing number of electronic sensors that allow them to see, hear, feel a lot more than ever before, generating prodigious amounts of data. Increasingly sophisticated analytics then sift through the data, providing insights that allow us to operate the machines in entirely new ways, a lot more efficiently. And not just individual machines, but fleets of locomotives, airplanes, entire systems like power grids, hospitals. It is asset optimization and system optimization. Of course, electronic sensors have been around for some time, but something has changed: a sharp decline in the cost of sensors and, thanks to advances in cloud computing, a rapid decrease in the cost of storing and processing data. So we are moving to a world where the machines we work with are not just intelligent; they are brilliant. They are self-aware, they are predictive, reactive and social. It’s jet engines, locomotives, gas turbines, medical devices, communicating seamlessly with each other and with us. It’s a world where information itself becomes intelligent and comes to us automatically when we need it without having to look for it. We are beginning to deploy throughout the industrial system embedded virtualization, multi-core processor technology, advanced cloud-based communications, a new software-defined machine infrastructure which allows machine functionality to become virtualized in software, decoupling machine software from hardware, and allowing us to remotely and automatically monitor, manage and upgrade industrial assets. Why does any of this matter at all? Well first of all, it’s already allowing us to shift towards preventive, condition-based maintenance, which means fixing machines just before they break, without wasting time servicing them on a fixed schedule. And this, in turn, is pushing us towards zero unplanned downtime, which means there will be no more power outages, no more flight delays. So let me give you a few examples of how these brilliant machines work, and some of the examples may seem trivial, some are clearly more profound, but all of them are going to
have a very powerful impact. Let’s start with aviation. Today, 10 percent of all flights cancellations and delays are due to unscheduled maintenance events. Something goes wrong unexpectedly. This results in eight billion dollars in costs for the airline industry globally every year, not to mention the impact on all of us: stress, inconvenience, missed meetings as we sit helplessly in an airport terminal. So how can the industrial Internet help here? We’ve developed a preventive maintenance system which can be installed on any aircraft. It’s self-learning and able to predict issues that a human operator would miss. The aircraft, while in flight, will communicate with technicians on the ground. By the time it lands, they will already know if anything needs to be serviced. Just in the U.S., a system like this can prevent over 60,000 delays and cancellations every year, helping seven million passengers get to their destinations on time. Or take healthcare. Today, nurses spend an average of 21 minutes per shift looking for medical equipment. That seems trivial, but it’s less time spent caring for patients. St. Luke’s Medical Center in Houston, Texas, which has deployed industrial Internet technology to electronically monitor and connect patients, staff and medical equipment, has reduced bed turnaround times by nearly one hour. If you need surgery, one hour matters. It means more patients can be treated, more lives can be saved. Another medical center, in Washington state, is piloting an application that allows medical images from city scanners and MRIs to be analyzed in the cloud, developing better analytics at a lower cost. Imagine a patient who has suffered a severe trauma, and needs the attention of several specialists: a neurologist, a cardiologist, an orthopedic surgeon. If all of them can have instantaneous
and simultaneous access to scans and images as they are taken, they will be able to deliver better healthcare faster. So all of this translates into better health outcomes, but it can also deliver substantial economic benefits. Just a one-percent reduction in existing inefficiencies could yield savings of over 60 billion dollars to the healthcare industry worldwide, and that is just a drop in the sea compared to what we need to do to make healthcare affordable on a sustainable basis. Similar advances are happening in energy, including renewable energy. Wind farms equipped with new
remote monitorings and diagnostics that allow wind turbines to talk to each other and adjust the pitch of their
blades in a coordinated way, depending on how the wind is blowing, can now produce electricity at a cost of less than five cents per kilowatt/hour. Ten years ago, that cost was 30 cents, six times as much. The list goes on, and it will grow fast, because industrial data are
now growing exponentially. By 2020, they will account for over 50 percent of all digital information. But this is not just about data, so let me switch gears and tell you how this is impacting already the jobs we do every day, because this new wave of innovation is bringing about new tools and applications that will allow us to collaborate in a smarter and faster way, making our jobs not just more efficient but more rewarding. Imagine a field engineer arriving at the wind farm with a handheld device telling her which turbines need servicing. She already has all the spare parts, because the problems were diagnosed in advanced. And if she faces an unexpected issue, the same handheld device will allow her to communicate with colleagues at the service center, let them see what she sees, transmit data that they can run through diagnostics, and they can stream videos that will guide her, step by step, through whatever complex procedure is needed to get the machines back up and running. And their interaction gets documented and stored in a searchable database. Let’s stop and think about this for a minute, because this is a very important point. This new wave of innovation is fundamentally changing the way we work. And I know that many of you will be concerned
about the impact that innovation might have on jobs. Unemployment is already high, and there is always a fear
that innovation will destroy jobs. And innovation is disruptive. But let me stress two things here. First, we’ve already lived through mechanization of agriculture,
automation of industry, and employment has gone up, because innovation is fundamentally about growth. It makes products more affordable. It creates new demand, new jobs. Second, there is a concern that in the future, there will only be room for engineers, data scientists, and other highly-specialized workers. And believe me, as an economist, I am also scared. But think about it: Just as a child can easily figure out how to operate an iPad, so a new generation of mobile and intuitive industrial applications will make life easier for workers of all skill levels. The worker of the future will be more like Iron Man than the Charlie Chaplin of “Modern Times.” And to be sure, new high-skilled jobs will be created: mechanical digital engineers who understand both the machines and the data; managers who understand their industry and the analytics and can reorganize the business to take full advantage of the technology. But now let’s take a step back. Let’s look at the big picture. There are people who argue that today’s innovation is all about social media and silly games, with nowhere near the transformational power of the Industrial Revolution. They say that all the growth-enhancing innovations are behind us. And every time I hear this, I can’t help thinking that even back in the Stone Age, there must have been a group of cavemen sitting around a fire one day looking very grumpy, and looking disapprovingly
at another group of cavemen rolling a stone wheel up and down a hill, and saying to each other, “Yeah, this wheel thing, cool toy, sure, but compared to fire, it will have no impact. The big discoveries are all behind us.” (Laughter) This technological revolution is as inspiring and transformational as anything we have ever seen. Human creativity and innovation
have always propelled us forward. They’ve created jobs. They’ve raised living standards. They’ve made our lives healthier and more rewarding. And the new wave of innovation which is beginning to sweep through industry is no different. In the U.S. alone, the industrial Internet could raise average income by 25 to 40 percent over the next 15 years, boosting growth to rates we
haven’t seen in a long time, and adding between 10 and 15
trillion dollars to global GDP. That is the size of the entire U.S. economy today. But this is not a foregone conclusion. We are just at the beginning of this transformation, and there will be barriers to break, obstacles to overcome. We will need to invest in the new technologies. We will need to adapt organizations
and managerial practices. We will need a robust cybersecurity approach that protects sensitive information
and intellectual property and safeguards critical infrastructure
from cyberattacks. And the education system will need to evolve to ensure students are equipped with the right skills. It’s not going to be easy, but it is going to be worth it. The economic challenges facing us are hard, but when I walk the factory floor, and I see how humans and brilliant machines are becoming interconnected, and I see the difference this makes in a hospital, in an airport, in a power generation plant, I’m not just optimistic, I’m enthusiastic. This new technological revolution is upon us. So think about the future —
it will be here soon enough. Thank you. (Applause)

58 Replies to “Marco Annunziata: Welcome to the age of the industrial internet”

  1. YRUSL says:

    ezio auditore ftw

  2. x says:

    I am sure companies will invest – equally – as much into securing these systems as they do into all of the potential benefits of interconnectivity. Excited and nervous here.

  3. Jon Wise says:

    "And there's always a fear that innovation will destroy jobs. But innovation creates new demand and new jobs"
    Right now unemployment rises BECAUSE of innovation (in AUTOMATION). But some economists are too stubborn to admit that. In the future most work should be automated and not just mechanical repetitive work. IMHO, if by the end of this century most people will have to work to satisfy basic needs, we have failed as a society.
    Here are some facts.
    Corporate profits go up, while wages go down. (less and less people are needed to generate more and more wealth)
    Unemployment rises. (same reason)
    E.g.
    Kodak had 145,000 employees. And it went bankrupt with negative 1 billion $.
    Instagram had only 13 employees. Was sold to Facebook for 1 billion $.
    As we go into the future more and more wealth will be generated by less and less people. And then those people use that wealth to generate even more wealth. And that's how inequality rises. It doesn't happen because of bad governmental policies or because of regulations or the lack of regulations.
    Those are not economic PROBLEMS, those are fundamental economic PROPERTIES of the capitalism. By regulations you can only speed up the process or slow it down. Or, as some "developed" countries do, you can move your problems to other regions. Capitalism was good for its  time, but not anymore. And it will be more and more disastrous as we move into the future.

  4. ElektrobanK says:

    Interesting talk, for sure. I think cloud computing, automation and innovation are all excellent tools for increasing efficiency and creating new jobs, but as Marco mentions near the end, there are pretty big hurdles. There needs to be strong oversight and fail safes in place to ensure safety is maintained in the event of possible systems malfunctions. Potential security breaches need to be prevented and/or contained without putting other systems in jeopardy. As we become more reliant on technology and the cloud, we also increase our vulnerability.

  5. Kombaiyashii says:

    more money for the banks to steal.

  6. TheMcBobbles says:

    Great talk. I think education will be key to achieving and maintaining this future which I think is inevitable. If we keep education costs down and readily available to all then that will be the foundation for the rest. Just my opinion. 

  7. Strangepete says:

    "Maybe… Just maybe… Human employment for income as we know it; the foundation of our economic system – simply ISN'T going to work anymore because of the emergence of science and technology. Hence: the emergent nature of reality clashing with our traditional assumptions."

    – Peter Joseph

  8. Strangepete says:

    "You have to deserve your right to live through labor for income!

    That's an obsolete notion."

    – Peter Joseph

  9. Open School says:

    Thinking machines going to create a profound impact on on our lives. Certainly it will make our world a better place. Less pollution, more efficiency and better living conditions could be the result of this 'Industrial Internet." More or less all these ideas are thoroughly analyzed by Alvin Toffler in his mind-blowing "Future Shock" book. We are in the midst of this great "Info-tech Revolution. Highly recommended talk.

  10. Jod Life says:

    i can't wait !

  11. weesh says:

    @Alec Chvirko 
    TED: a refuge of people looking forward an a site full of people pining for the old days.

  12. ManicMindTrick says:

    Man creates machines. Machines serves man. Machines grow more powerful than man. Machines destroy man. Machines rule the world.

  13. eclectic9eel says:

    sorry, upper middle klass twaddle – we well be having power outages in the uk soon

  14. shrunkensimon says:

    As with all these types of future talks, including the ones had decades ago, they always say "don't worry about your jobs/you will have more free time/you will all benefit". This is similar to the trickle down theory in economics, sounds great on paper but doesn't work out like that in reality. Innovation and efficiency will reduce costs for companies, and make the top tier even richer.. and that's it. We may get some fancy new technology, but the vast majority of people will not see a dramatic improvement in their living standards. At the end of the day people need jobs because people need money to live.

    We don't need more technological efficiency. What we need is efficiency in leadership! We're heading for a brick wall at 200mph and no one is doing a damn thing.

  15. Aaron Gelera says:

    Human beings adapt to changes of environment. Our innovations change our environment. We change ourselves. As a collective, we adapt. Some of us excel, others not so well. This video does a good job of promoting optimism while delivering realism

  16. ivan olszevicki says:

    We all can see how technology can advance, improve and be more effective. We know man can achieve incredible things. But the point is: are this improvements on technology focus on the main problems of humanity? Humanity problem is no it's lack of improving technology effectiveness. Humanity problem has to do with lack of consciousness, it's monetary system that has to do with control and preserve a few. Is the lack of feeling the human family as one and realizing that if we collaborate as one we don't need to play this game of money. Realize that the planet has enough resources to feed the entire planet s population. The problem are not the resources nor technical problems in order of how to take them from earth, and such. The problem is a civilization made out of greed and fear. Fear of the ones that have the power, that made the monetary game.

    So, technical improvements solve technical matters. We know how to solve those! How about HUMAN MATTERS… the one that actually comes first. Greed. Fear. Lack of love and compassion, feeling as ONE human family? THAT's the REAL problem. So, let's solve those… and then celebrate all other achievements, being technicals, atheltic, artistic, what ever. But, what comes first??? 

  17. LanttuLoL says:

    I absolutely love his accent ^^, also a wonderful talk.

  18. John B says:

    No mention of how this fantastical industrial internet relates to the natural world which is in decline because of the industrial machine and growth economics. This "new world order" is just a load of switches and blinking lights without any connection to the natural world or basic humane thought. Many people simply do not want to be assimilated.

  19. squirreljester2 says:

    It's actually kind of interesting, we're becoming less like experts in our respective fields, but more like children following directions. If there's an issue at my work, I go on Google with the error message, apply the solutions that the collective online have agreed works, all without actually thinking about the issue very much.

  20. crash4dafun says:

    Anyone else notice how Marco looks down at the ground when he says "innovation has caused employment to go up." (8:50)  Doesn't seem like you even believe what you are saying to me…

  21. Husain Halimi says:

    im actually surprised.. i thought something like that already exists. guess im overestimating everything

  22. Luis Filipe Teixeira says:

    Obrigado @Pedro Pampolim Adorei este video, bastante poderoso nas suas ideias…….e mais não digo 🙂
    Alias aconselho a todos a visualizarem.

  23. missmeech788 says:

    Not liking the sound of all this innovation. Have to think on it, but also agree strongly with those who posted these thinking machines will replace human thinking, therefore replace human jobs. Don't see a good outcome to this, but am not ready to dismiss it.

  24. Jake Andersonm says:

    What accent is that?

  25. Lance Winslow says:

    Absolutely the right strategy. Brilliant, where can I read your academic papers? Some of the best hand-held devices I've seen are infrared to see friction heat in bearings for hydro-plants, vibrational noise anomalies in jet engines, and visual systems to see deformation. If we put sensors in bridges, infrastructure, buildings, pipelines, platforms and hook it all to the "Internet of Things" almost like the "digital nervous system" explained in Bill Gates' book "The Road Ahead" and the system was designed like Enterprise Software from SAP or Oracle we could easily have this done – couple that to AI (Artificial Intelligence) and we could rid the world of the unintended consequences of human decisions creating all known Murphy events. So, I concur and hope the world promotes you to the global spokesman to address these solutions – thank you again – AWESOME video -YOU are ABSOLUTELY CORRECT!

  26. I'm Simon says:

    Less delays for trips that are still not needed. Machines deciding how they will be upgraded, using their own intelligence; how long before they start making decisions to go in the direction they choose rather than the one intended? Quicker doctors and nurses; hospital mistakes (including mis-medication and unintended reactions) are now the third largest killer in America… Less jobs for those without cutting edge skills, more wealth concentration for the mega wealthy… I disagree with this fellow on many points.

  27. Black Leaf says:

    tecnology will bring more money but in whos bocket.

  28. kevendubin says:

    I can't thumb this up – the whole "Thinking Machines" / "Self aware computers" is used so poorly as to lead people to believe that they are "thinking", "learning" and "self aware" in the same way that we use those terms commonly, and it's just not true.  At the end of the day, they are still just A-Z programs, albeit very advanced ones, which are doing exactly what they are told to do within the limits of their programs.

  29. GotenTrunks2122 says:

    TED always interesting

  30. Dustin Danini says:

    Only supper smart people will survive we see this today

  31. Dustin Danini says:

    A redwood can grow from an acorn

  32. itscrazytrevor says:

    "The best innovations are behind us" where the hell is he hearing that bull puckie? I've never heard that until this very TED Talk! I don't see how it's the industrial internet age when it's already being call the drone age! TED Talks have loads of drone videos on line! You want to save time and money than it's not about fixing things before they break it's doing away with built in obsolescence that's the biggest scam! Finally forget coming up with better energy sources since Nikola Tesla brought the world free energy and now we have Keshe Foundation free energy if The Man does not kill him off and steal his work too!?!

  33. Roshawn Marcell Valentino Terrell says:

    "The future will be here soon enough"

  34. Farhan Misarwala says:

    The best thing i saw on internet today 

  35. shitbag says:

    "It can be argued that DNA is nothing more than a program designed to preserve itself. Life has become more complex in the overwhelming sea of information. And life, when organized into species, relies upon genes to be its memory system. So, man is an individual only because of his intangible memory… and memory cannot be defined, but it defines mankind."

  36. Tim Carter says:

    I applaud the dividends that the technological revolution will bring. But TED talks like these have a creepy sort of conditioning factor. Everyone enthusiastically sits with their mouths agape not thinking critically about the collateral damage of this inevitable revolution.  That enthusiasm predictably makes us vulnerable to accepting mediocrity in the marketplace. Also, do you ever notice nobody says "technology will help us work less and enjoy a balanced life" anymore?

  37. Ben Lo says:

    他的口音好可愛!

  38. rRobert Smith says:

    at time 3:57 the speaker imagines a future utopia where there is no bad weather, or other chaos interrupts, with some wild leaps of logic you can extend the technology curve out and project the month when time travel will be possible….and when your personal digital assistant will be smarter than a doctor or a degreed engineer…  

  39. Alex Geller says:

    Lacking some real specific examples… Cost of wind going from 30 cent per kilowatt hour to less than 5 was not entirely due to industrial Internet. Probably the single largest reason has more to do with the engineering feats in building them larger. In the hospital example, how did the bed turnover rate jump so much? Even if it was due to industrial Internet, he did not provide an explanation as to why…

  40. Aeribous says:

    +Jon snow a few quick things and don't think I disagree with you. First if your American like myself let me say our economy is unsustainable because your right there are a lot of useless jobs. The system would work better if we got rid of capitalism. Hopefully you understand that capitalism and free enterprise are two separate things. Capitalism corrupted the free enterprise in the us. Which is why our government keeps signing these horrible trade treaties that got rid of our true wealth, manufacturing. Communism should never be discussed because it's useless. Raw materials are finite not infinite. There for no matter how you look at it, it is unsustainable until we have infinite resources and useless to even discuss. Even if machines completely take over the production of wealth there will always be the need for over site and service for even now we can't run with out machines and they can't run with out us.

  41. Nagarjun Palavalli says:

    Fantastic talk! Absolutely agree with the speaker's points.

  42. Tyson Quick says:

    Nothing is going to slow down. If you're having a hard time keeping up now, just wait another 2-3 years. 

  43. Dylan Schmitz says:

    Does anyone know what presentation software he is using for his deck?

  44. Marcus Simpson says:

    Lots of big words little substance. This is empty optimism and opiate addiction to progress, tomorrow is always brighter. Solving air flight delays simply isn't a compelling lecture. There are many more accessible issue within our society. He closes with a note on the education system. What a joke. Throw it all away. Start over enough with this worship of a faster more intelligent computer chip.

  45. hadi fatahillah says:

    did anyone notice this guy's dick its B.I.G….!! 🙂

  46. ceojr1963 says:

    For the people fearing that the new will make them idle and alone and jobless, then pick up your garden trowel and feed a stranger with the fruits of your window box or yard, help the person down the street cook a meal for others, be helpful, and share and learn from those in need, you can fill your day helping people and never know that you were not homeless, jobless or hungry, because you were feeding and helping and hugging your fellow human.  The Peace of Christ be with you all.

  47. ProYouTube COL says:

    Great talk

  48. TheRustedBucket says:

    For this to truly be successful, political and economic industries need to be reformed to make full use of the industrial internet. Plutocracy is the last great hurdle to a new age of world prosperity.

  49. Omioblivion says:

    Quite an inspiring speech.

  50. Jeremy Conner says:

    Marco Annunziata looks at how technology is transforming the industrial sector, creating machines that can see, feel, sense and react …

  51. Mark Geronimo says:

    2 words this guy didn't consider: Net Neutrality. NSA and the US Government have different plans for the internet..and our access too it

  52. holybigbang says:

    that fuckin' accent

  53. manuelabeltran says:

    Amazing! We are definitely feeling more fulfilled as we are able to buy all the crap we don't need faster than ever! Even more happy and fulfilled are the massive number of people who "become interconnected" with "brilliant" machines at sweatshops while earning below minimum wages, working excessive hours and practically having zero quality of life. This guy should have an audience of sweatshop workers and sell them his "happiness" philosophy attributed to these "brilliant" human-like machines, see if they buy his crap.

  54. Pwa Al says:

    Marco – an excellent talk, I enjoyed it.  I particularly enjoyed your comment about being scared, even as an economist…
    Thanks for the show.

  55. Vizor says:

    internet of things and industrial internet whats the difference? 

  56. Thanh Tùng Nguyễn says:

    love

  57. Patrick McCormack says:

    When marginal costs near zero, what will happen to people when AI does most work and idle minds churn. In store for us is an uncertain future … emotional to say the least.

    DUNE PROLOGUE TV extended version
    https://www.youtube.com/watch?v=z7FcJwg6OkA

    "Dune" (1984): The Sleeper Must Awaken
    https://www.youtube.com/watch?v=vAUqvzNaN2o

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