(By Balaseshan) General Electric Co. (NYSE: GE) released a new report finding that Industrial Internet could add $10 to $15 trillions to global gross domestic product (GDP) by 2030.
It found that enabling Internet-connected machines to communicate and operate automatically can bring substantial efficiency gains.
If the Industrial Internet boosts annual productivity growth by 1-to-1.5 percentage points in the U.S., with partial diffusion to the rest of the world and considering the power of compounding over the next twenty years, it could add $10-15 trillion to global GDP, about the current size of the U.S. economy.
The new report detailed the business and economic impact of the Industrial Internet, an open global network that connects people, data, and machines. The report, "Industrial Internet: Pushing the Boundaries of Minds and Machines," was written by GE's Chief Economist Marco Annunziata and GE's Director of Global Strategy and Analytics Peter Evans.
The Industrial Internet will help eliminate hundreds of billions of dollars of wasted time and resources across critical industries by combining Internet-connected machines, product diagnostics, software, and analytics to make business operations efficient, proactive, predictive, and strategically automated.
While its benefits will reverberate throughout the economy, the initial impact of the Industrial Internet is likely to also be felt especially strongly in advanced manufacturing, which could become a stronger engine of job creation and productivity.
The report cites that the first wave of the Internet and Communications Technologies (ICT) revolution boosted U.S. labor productivity growth to an average annual rate of 3.1% during 1995-2004, twice the pace during the previous quarter-century.
If the Industrial Internet revolution could recapture and maintain this 3.1% productivity growth, by 2030 this could translate to an average income gain of $20,000 per person over the current trend.
GE is trading down 0.29% at $20.98 on Monday.