INDUSTRIAL INTERNET AND RECOMMENDATIONS TO PUBLIC POLICY MAKERS

“The industrial Internet is here and now. Leading companies across multiple industries are already reaping tangible benefits in improving operations, lowering costs, generating revenues and creating competitive differentiation. Major smart cities such as Barcelona, Chicago and Hamburg are also benefiting from reduced crime, improved urban services and better infrastructure integrated with real time, connections, servers and data. To further accelerate the adoption, industry, technology and government leaders need to work together to address challenges such as security, inter-operability, standards and digital talent gaps.” (John Chambers, Chairman and CEO, Cisco)

Recommendations to Public Policy Makers

1. Clarify and simplify data policies: To realize the promise of the Industrial Internet, global companies need clear legal guidelines over data ownership, transfer and usage. Who owns the data generated by equipment? What information can be shared or sold, and under what circumstance? How will responsibilities among parties be handled when the data originates in one jurisdiction and is used in a different one? In complex global organizations, it is often more difficult to segregate Industrial Internet data than that of consumer Internet based on national boundaries. Until the full impact is better understood, it would be prudent to introduce temporary policies to guide the market and spur innovation. Governments need to collaborate with each other and industry to harmonize compliance requirements in data and liability laws, as the European Commission and the United States are doing on message standards. This will streamline data flow within a jurisdiction and across national boundaries – an issue critical to large, global organizations.
2. Update industry regulations: Some industries, such as utilities and healthcare, are heavily regulated in many parts of the world. For these industries to benefit from the Industrial Internet, policy-makers will need to revisit and possibly relax existing regulations to provide more flexibility and incentives for companies to invest and innovate. In the utilities industry, governments can now tap into the new power of transparency enabled by the Industrial Internet to encourage more competition, market efficiency and better customer services. Motor vehicle, aviation and workplace regulations may require adjustments to allow experimentation with autonomous cars, unmanned aerial vehicles and robots in warehouses, factories and hospitals. Policy-makers should also review whether insurance regulations will support or hinder the growth of an outcomes guaranty insurance market.
3. Invest in digital infrastructure: The success of the Industrial Internet depends heavily on the presence of robust infrastructures, such as ubiquitous broadband connectivity and sensors. Through targeted investment, emerging markets will have a unique opportunity to potentially leapfrog developed countries in the Industrial Internet infrastructure. As these countries continue large construction efforts like roads, airports, factories and high-density buildings, they can avoid costly retrofitting faced by developed countries by installing state-of-the-art embedded sensors from the outset. These capabilities provide a foundation for smart cities, enabling more efficient use of natural resources, better public safety and citizen services. Industry can help government leaders to prioritize infrastructure investments that can provide long-term strategic benefits to economic growth, social impact and political success. As part of the Smart Nation infrastructure, for example, Singapore is considering installing Above Ground Boxes as key supplying points for backend fibre access and power. This approach avoids the need for unnecessary groundwork and thus significantly reduces sensor deployment time and cost.
4. Raise awareness among public policy-makers: Many policy-makers are still not well informed about how the Industrial Internet might impact citizens, industries and governments, and what governments can do to promote the market development and economic growth. There is an urgent need to bring them up to speed on the technology, its societal and policy implications (such as data security, privacy, education and jobs), and impact on government services. For example, the German government was one of the first to recognize this need, and has sponsored the Industrie 4.0 initiative, which includes specific recommendations for German regulators as well as industry to promote the growth of digital industries in the country.