Photo: Bergmann

“The industrial companies that can bring together cloud, open source, and real-time process management with industrial product cycles will be the ones that will win in the digital transformation process.”

William Ruh, CEO for GE Digital

At Mobile World Congress 2016, GE outlined some fundamental insights about the digital transformation efforts of industrial businesses. William Ruh, CEO for GE Digital, a US$6 billion business of General Electric, shared valuable insights about the digital transformation process that industrial businesses need to tackle.

Digital Transformation Is Happening And Offers New Opportunities

Companies that fail to embrace digitization won’t be able to compete in the next decade. William Ruh stressed that while the past decade was primarily about the consumer Internet, the next decade will be about the industrial Internet. Digitization offers one of the biggest opportunities in many decades to companies that are willing to change:

  • Digital technologies may help drive productivity growth. In low- or no-growth markets, the only way to boost economic output is through greater efficiency, which is largely driven by technological experiments. Between 1999 and 2006, global labor productivity grew at an average annual rate of 2.6%.[i] During that time, industry largely ignored the opportunities that the Internet offered for industrial transformation. The labor productivity growth rate in mature economies has slowed to about 0.6% since 2014, while total factor productivity hovered at around zero in 2015. Lower productivity translates into lost profits and thus fewer funds for future investments.
  • Connected products add value by providing real-time analytics processing capabilities. For instance, GE’s train engines calculate the optimized running speed for any given operating condition, thereby saving 10% to 15% of fuel costs.
  • Connected devices must communicate to optimize customer experience and operational excellence. Connected objects don’t yet do this because they still rely on myriad standards. Moreover, solutions in different sectors need to interact better and find a common language for all verticals. GE believes that industrial transformation is likely to happen faster in countries like Germany than in many other parts of the world. Germany’s Industrie 4.0, which focuses mostly on manufacturing, is helping shape the industrial transformation debate in an economy where the industrial complex still plays a significant role. In the US, the Industrial Internet Consortium (IIC) initiative focuses on many verticals. But Industrie 4.0 and IIC are complementary rather than opposing initiatives; they cooperate closely, and representatives meet and interact regularly.

[i] Source: “Total Economy Database™ – Key Findings,” The Conference Board, May 2015 (