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Industrial Internet of Things special report 2017

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RACONTEUR.NET INDUSTRIAL INTERNET OF THINGS 03 09 / 03 / 2017 /industrial-iot-2017 Although this publication is funded through advertising and sponsorship, all editorial is without bias and sponsored features are clearly labelled. For an upcoming schedule, partnership inquiries or feedback, please call +44 (0)20 3877 3800 or e-mail info@raconteur.net Raconteur is a leading publisher of special-interest content and research. Its publications and articles cover a wide range of topics, including business, finance, sustainability, healthcare, lifestyle and technology. Raconteur special reports are published exclusively in The Times and The Sunday Times as well as online at raconteur.net The information contained in this publication has been obtained from sources the Proprietors believe to be correct. However, no legal liability can be accepted for any errors. No part of this publication may be reproduced without the prior consent of the Publisher. © Raconteur Media RACONTEUR MARTIN BARROW Former health editor, news editor, foreign news editor and business news editor at The Times, he is now a freelance writer. WENDY M. GROSSMAN Freelance technology writer, specialising in computers, freedom and privacy, she won the 2013 BT Enigma Award for lifetime achievement in information security journalism. LEO KING Writer and editor, he works with the Financial Times, The Sunday Times, Forbes, Bloomberg, The Economist and The Daily Telegraph. JIM McCLELLAND Sustainable futurist, his specialisms include built environment, corporate social responsibility and ecosystem services. BEN ROSSI Editorial director at Vitesse Media and formerly editor of Information Age and Computer News Middle East, he writes for national newspapers and business publications. FINBARR TOESLAND Freelance journalist, he specialises in technology, business and economic issues, and contributes to a wide range of publications. CONTRIBUTORS PUBLISHING MANAGER Frank Monaghan DIGITAL CONTENT MANAGER Jessica McGreal HEAD OF PRODUCTION Natalia Rosek DESIGN Samuele Motta Grant Chapman Kellie Jerrard PRODUCTION EDITOR Benjamin Chiou MANAGING EDITOR Peter Archer DISTRIBUTED IN INDUSTRIAL INTERNET OF THINGS @raconteur /raconteur.net @raconteur_london T he internet of things or IoT, which can connect any de- vice to the web, has been a boon for owners of manufac- turing firms. By providing data from multiple machines, factory perfor- mance can be monitored, goods can be tracked and maintenance needs predicted – all for greater efficiency. Those on the factory floor have been less supportive of the change, understandably fearing their jobs will be replaced by robots and ma - chines that "speak" to each other. The reality, however, is more nu- anced. Rather than eliminating all roles, the IoT is creating demand for a different set of skills. Many of these jobs will come from the ser - vice sector, supporting customers, and also the technology sector that supports the systems. By 2020, according to the Centre for Economics and Business Re - search and technology firm SAS, some 182,000 jobs will be created in the UK by the IoT and big data in a range of areas. The IoT allows traditional prod - uct businesses to become services firms. Instead of simply manu- facturing and selling goods, the industry can now maintain and upgrade them, something the tech- nology sector rather awkwardly labels "servitisation". IoT-connected devices link con- sumer goods to manufacturers' systems, advising of maintenance and upgrade needs, the same way factory devices are connected. Washing machines or heating control systems, for example, can be fitted with sensors to detect when they are going wrong, alert - ing manufacturers to send an engineer. The same concept can be applied to the business world, and to a water utility's pipes and control systems. Numerous predictions demon- strate the enormous services oppor- tunity. Gartner expects 8.4 billion IoT-connected devices to be in use worldwide this year, with 5.2 billion of them in consumers' hands and 3.2 billion of them in businesses. Some $1.2 trillion will have been spent on IoT by 2020, says analyst IDC, with manufacturing lead - ing the way last year with a cool $187 billion. The change creates demand for a raft of new talent. "To capture the bigger opportunities presented by the industrial IoT," according to management firm Accenture, "com - panies will especially need to look for skills in data science, software development, hardware engineer- ing, testing, operations, marketing and sales." The smartest firms have recog- nised this shift. Among them is General Electric, whose chief ex- ecutive Jeff Immelt says industrial companies are "in the information business whether they want to be or not". The most positive aspects of the new service model are that it pro - vides a deeper customer relation- ship and a reliable revenue stream for manufacturers. Goods makers can record customer details from which to develop loyalty and they can look forward to recurring ser - vice revenue, repairing the devices themselves or taking a cut of their contractors' income. Home and heating management from the Google Nest and Brit - ish Gas Hive systems accumulate user data, becoming increasingly invaluable to people as they link automated services to recorded habits, making a brand switch less appealing. For their makers, both data analysis and marketing skills are essential. This thinking is being taken a step further by expanded teams of mar - keting and technology personnel, who are using the IoT for immediate promotions. Drinks maker Pernod Ricard has fitted sensors to bottles that enable smartphone users to simply tap their device on the ves - sels to reveal recipes for cocktails and ways to buy more products. Competitor Diageo designs and runs internet-connected bottles so users can share their own videos. An entire workforce will grow to create, sell and support the new business. In addition to sales and marketing, Accenture notes in its research, new employees "will in - clude product managers, software developers to create and test new information services, hardware de- signers to develop the products, data scientists to create and interpret an- alytics, and user-interface and expe- rience designers". Business buyers are adding to the scale of these skills demands. Rolls-Royce and General Electric have manufactured jet engines that can be sold as a service, rather than simply a product. Packaged into regular costs for airline buyers are maintenance and upgrades, with IoT systems telling them when to take action. Meanwhile, Michelin uses sensors on customers' deliv - ery trucks to help human experts suggest more efficient travel and sell tyres based on the number of miles driven. As these services become the key proposition for sales forces, manu- facturers can use them to drive up- take of add-on or upgrade products. The data from all of these services can also be applied by expanded research teams to influence fresh product design. As businesses move their humans away from manual tasks, workers will equally be required to oper - ate, design, monitor or service the IoT-linked machines they have purchased. Then there is the new demand for staff educators to help them use the systems and process engineers to make sure they fit prop - erly into existing operations, Accen- ture notes. Of course, with all these sys- tems connecting business net- works to the wider internet, secu- rity personnel will be paramount. Gartner expects that the "scarce" IoT security specialists will be in ever-higher demand and figures from freelance database Upwork show a 194 per cent increase in 2015 in demand for security infra - structure specialists. While the IoT may reduce the need for some manual jobs in factories, it will also create a huge new demand for service skills to maintain, create and market the systems. There is no doubt that such a colossal shift will be uncomfortable for some, but the power of people will remain strong in the new world. Connected machines will create better jobs Chris Ratcliffe/Bloomberg via Getty Images 3.2bn of the 8.4 billion IoT connected devices are for business use LEO KING $1.2trn will have been spent on IoT by 2020 Gartner/IDC $187bn will have been spent on IoT within manufacturing by 2020 Negative stories have surrounded the internet of things and job losses have been their focus, but a more accurate analysis reveals a shift in the skills needed towards services OVERVIEW Rolls-Royce's IoT systems notify the engineering company when maintenance and upgrades are due PUBLISHED IN ASSOCIATION WITH

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