The Thought Leader Interview: GE’s Bill Ruh on the Industrial Internet Revolution

The Thought Leader Interview: GE’s Bill Ruh on the Industrial Internet Revolution

(Strategy-Business, 2/1/17)

According to Bill Ruh, the underpinnings of our industrial society will be profoundly changed by 2020. Every form of large-scale machinery will be suffused with sensors and software controls, all more and more interoperable. Increasing productivity, raising profits, eliminating waste, ensuring environmental quality, and improving manufacturing processes will all be automated activities, functions of a kind of ghost in the machine. There will be at least 1 billion more digital electric power meters than there were in 2015; more than 100 million lightbulbs will be connected to the Internet, turned on and off by sensor or smartphone; and machines produced by just one company, GE, will generate a million terabytes of data per day, much of it in the form of operational statistics that adjust machines to make them more efficient every day they are in use.

Whereas Northwestern University economist Robert Gordon argues that productivity growth is fated for a permanent slowdown, and MIT’s Erik Brynjolfsson expects automation to erode employment even if productivity recovers, Ruh sees himself as a productivity activist. He is building the software and hardware platforms that will take industrial technologies into a new, prosperous stage of development.

GE, of course, has been at the forefront of technological change since it was created in 1892 through the merger of Thomas Edison’s and Charles Coffin’s electric companies, supported by financier J.P. Morgan. After embracing financial-services and media businesses in the 1980s and 1990s under CEO Jack Welch, and then retreating from them after Jeffrey Immelt took over in 2001, the company has gradually reshaped its identity around the industrial platforms it maintains as a maker of turbines, jet engines, power systems, and healthcare equipment. Because platforms of this sort are rapidly evolving to incorporate sensors, data analytics, and Internet connections, GE is redefining itself as a producer of software-driven offerings — or, as Immelt puts it, “a top 10 software company by 2020.”

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