Siemens Vs GE: The industrial digital battleground
Two hundred years after the birth of the first industrial revolution, the latest – Industry 4.0 – is driving the industrial landscape towards a highly connected digital future, and two of the world’s most famous industrial brands are fighting hard to claim a piece of the action.
Thanks to the Industrial Internet of Things (IIoT), digital technologies are transforming industry and the 2017 World Economic Forum report identified a $100 trillion opportunity for both industry and society through the adoption of technologies which will reimagine how we design, manufacture and service products in the future.
It will rest upon the interconnectivity made possible by data generating devices that will provide the business insight, visualisation and capability to raise productivity levels, reduce time to market, increase competitiveness, create higher-paid, higher-skilled jobs and, ultimately, disrupt existing business models and create new ones.
The rise of the machine
The exponential growth of connected devices and the production of data are both expanding at break-neck speed. Every day, another five million devices link up with each other, with the internet, or with both. There are around 6.4 billion data-communicating objects in the world and by 2020 forecasters are predicting this number will exceed 20 billion. Indeed, 50% of the entire world’s data was created just last year alone.
Two industrial giants – Siemens and General Electric (GE) – are among the leading players intent on making the most of the commercial opportunity a digital industrial future presents by harnessing advanced digital technologies for their customers.
Founded by two great innovators: GE by Thomas Edison and Siemens by Werner von Siemens in the 19th century, both organisations have their roots in electrical energy. From their inception they have competed and built their global businesses through a belief in innovation and the manufacture of numerous state-of-the-art solutions that have impacted many parts of society, such power provision, jet engines, train locomotives, healthcare and factory automation systems.
Both now have their eyes on the next big battle – dominating the digital domain of industrial manufacturing.
Embarking on a digital journey
With the term Industry 4.0 originally coined in Germany, Siemens is focussing upon the delivery of digitalisation – the technology focus of Industry 4.0 – as the solutions provider for their wide range of industrial customers across many markets. This is important with the process industries & drives, digital factory and energy management divisions accounting for nearly 40% of their business.
Optimising the operational and strategic benefits that can be derived from the extraction, interrogation and storage of big data streams from connected digital devices lies at the heart of their proposition. The result of which will be enhanced industrial productivity, improved asset management and strengthened overall manufacturing performance.
This optimisation can offer customers the ability to produce flexible and highly customised product solutions at mass volume cost such as being seen in the food and beverage sector. Across other sectors this is seeing the delivery of personalised patient medicines in pharmaceutical manufacturing as well as providing technology answers to help meet the energy supply and management challenges all businesses now face.
GE’s digital vision follows a similar route with their advanced digital technologies helping to scrutinise operating models, look at internal business capabilities, support a growing app ecosystem, encourage collaboration and focus upon outcomes for their business partners.
The benefits of industrial digitisation
It is clear that both companies will play a critical role in helping businesses transform themselves to deliver the kind of highly digitalised industrial future set out in the strategically important and Government-backed ‘Made Smarter Review’ which was published last year.
If successful, the report says that industrial digitalisation could provide a £455bn boost to UK manufacturing and help to rebalance the UK economy from a reliance on the service and financial sectors.
When examining the key learning from this battle, you would be forgiven for thinking it’s all to do with the size of both GE and Siemens which gives a competitive advantage when it comes to the capex they are able to invest in such industrial mega trends. However, looking at the ongoing battle between the two, it becomes more apparent that it’s the drive both companies have to be at the forefront of innovation, a desire, which certainly isn’t dictated to by commercial investments.
The role of SMEs
In fact, SMEs also have an important part to play in industrial digital technology adoption. They need to be encouraged and supported in their pursuit of a digitally enhanced future; one where a research and development focussed culture needs to be fostered.
MPA is already working with a number of such companies who are embracing the potential of digitalisation and has a team of experts who can help compile a compelling R&D tax credit case, in addition to applications for government funding schemes including Patent Box, which enables companies to pay a reduced rate of tax on profits generated from patented inventions. Both of which mean important funds to be reclaimed and reinvested into the company. From the global influence and reach of business giants such as Siemens and GE, to the newest, innovation-based start-ups, no industrial organisation should be immune from the impact digital technology tools such as augmented and virtual reality, artificial intelligence, digital twinning and 3D printing are going to have, if they want to guarantee a competitive and safe future.