Looking back at economic revolutions to-date, what they have all had in common is that technological advances have driven major shifts in how businesses operate and how people live and work. At the start of the Industrial Revolution, the steam engine transformed economies by enabling the mass manufacture of goods, leading to fundamental shifts in society as people moved from the country into towns to work in newly-established factories. More recently, the birth of the Internet Economy transformed how people communicate, and opened the door to new cloud-powered business models.
The networked economy represents the next economic revolution. Many UK businesses have used cloud computing to drive innovation and agility, enabling new processes and insights. In the networked economy, the cloud will empower organisations to develop new services that leverage big data analytics, smart applications and connectivity – and bring these innovative services to market much more quickly than before.
Living In A Hyper-Connected World
In a networked economy, everything is connected and tracked. It’s been estimated that by 2020 there will be 2.5 billion connections between people on social networks, and 75 billion connections between smartphones, appliances, manufacturing equipment and wearable computers.
Some innovative businesses are already harnessing this hyper-connectivity to provide greater flexibility and value to their customers. By connecting machines to machines, and machines with smart applications, Harley-Davidson is able to increase the accuracy of motorcycle production to meet manufacturing cost and quality targets and deliver custom bikes to consumers more quickly.
And, to transform transport in cities, we’ve developed the Automotive Control Centre, an application that analyses telematics from 130,000 cars in a matter of seconds. Insurers and car owners can turn this data into actionable insights to reduce the risk of accidents and breakdowns, cutting costs for all parties.
The Secret To Germany’s World Cup Success
Sensors, digital signals and data analytics are at the heart of both the Automotive Control Centre and Harley-Davidson’s M2M application. By connecting digital signals from analogue objects, we are able to track and analyse the signals for practical use. The opportunities for insights are huge, which is why these technologies are making waves beyond the world of business.
The secret to Germany’s success in the World Cup wasn’t just great talent and tactics. The DFB team prepared for the tournament by running minute-by-minute analyses of past matches to gain insights into their own and their competitors’ strengths and weaknesses. This was enabled by sensor technology built into the teams’ equipment and in-memory analytics. In just ten minutes, ten players with three balls can produce over seven million data points. Because of the power of the cloud, the team was able to analyse massive volumes of data in real time, right on the bench.
In the future, we will also digitise and track every package of food, every pharmaceutical dose and every car. Safety will be improved and commute times will be reduced with driver-less cars that are guided by connected devices, real-time information from other vehicles on the road and historical route preferences.
Making Everything Run Better
The networked economy is set to transform society as a whole, making it more efficient, boosting economic development and enhancing problem solving. By embedding sensors in wind turbines connected to sophisticated operations applications, energy companies will be able to proactively plan for optimal maintenance and workload schedules. This will lead to budget savings and higher revenues, as more energy can be delivered with fewer outages.
Data analytics will also enable businesses to predict changes in customer requirements and optimise resources in real-time, leading to enhanced customer satisfaction. Shoppers won’t have to go home empty handed, as retailers will have always enough stock to satisfy demand.
How Do We Get There?
To make the most of the networked economy, businesses should firstly digitise and collect data on business assets such as devices, equipment, employees, suppliers and customers. Secondly, they should analyse data from capital, time, infrastructure and workforce to help reduce waste and improve agility and predictability.
But how much data is too much? I think that the more data you gather, the better, but not all of it has to be analysed immediately – you can just store it. It’s better to be a data hoarder than to risk missing a piece of insight that might bring big returns in the future.
Finally, businesses should no longer feel constrained by ‘the way it’s always been done’ but to challenge convention and continually look for ways to transform their processes, infrastructure, skills and systems. By taking these three steps, businesses will be able to capitalise on the huge growth opportunities that the networked economy offers.