User:JohnMurray4040/sandbox

= Industrial Internet =

The Outcome Economy

Business Services will play a central role in re-industrialisation, both through the provision of innovative and productive services to other firms, and through the servitisation of Manufacturing. For example, the 2012 global Business Services market was estimated to be more than €3.5 trillion and to have doubled in size in the last decade. In Europe alone Business Services account for €1.5 trillion gross value added and provide jobs for more than 20 million people, across 4 million enterprises.

If economic activity in Business Services grows to the levels achieved by some countries, then the total global market for Business Services will be €7.8 trillion within a decade.

“Behind the scenes of the world’s leading industrial and manufacturing companies, a profound digital transformation is now underway”

According to EU High Level Business Services Group research, three factors will drive this growth: (a) continued outsourcing by firms as they seek to focus on their core competencies; (b) the servitisation of manufacturing - the tendency for manufacturing firms to sell services and solutions, rather than products and goods; and (c) general economic trends, where levels of employment in services tend to increase relative to manufacturing and agriculture, because of increased automation and productivity. The fourth industrial revolution - with increasing numbers of devices being connected to the industrial internet - will further reinforce and accelerate these trends, creating a significant global opportunity. A critical question is how to drive further innovation and productivity gains in services so that industry can capture a significant share of the global market opportunity and in so doing make a net positive contribution to the economy, the environment and society at large.

While the future opportunities for Business Services are significant, the High-Level Group identified three factors of concern: (a) the Business Services market is fragmented. This fragmentation creates challenges for the policy, business and research communities. (b) rapid growth of indigenous Business Service firms in some of the highest growth markets, including growth of consultancy and software firms in China and India. It is vital that Business Service firms gain a foothold in these rapidly growing and high potential markets and are supported by the public and university sectors in doing so and (c) we are in the midst of a fourth industrial revolution, enabled by sensors, data science, analytics and the internet Business Service firms of the future will play a crucial role in supporting industrial firms seeking to capitalise on the “industrial internet of things”. Past experience suggests that the United States is much more successful at growing the high tech, innovative firms needed to support this crucial industrial infrastructure.

We have to meet this challenge head on and significantly increase the pace of technological development and deployment if firms are going to seize the global opportunity Business Services offer. Achieving this will require co-ordinated effort and engagement across manufacturing and services firms either “born digital” or embarking in industrial digitalisation transformation.