ARC Forum Press Briefing from ABB

Thank you. Thanks, Greg. Looking around the room here, I recognize many of you and also recall many good discussions we've already had together with you on what the Internet of Things, Services, and People — what the Fourth Industrial Revolution actually is or will be, and how ABB participates in that.

Let me tell you that from my perspective, Industry 4.0 is about enabling business innovations for how we digitally connect the things, the services, and the people. It's an exciting topic both personally as well as for us at ABB. With more than 125 years as a company — born around the time of the Second Industrial Revolution — even when you're 125 years old, you don't get to see that many revolutions. We all recall the Third Industrial Revolution, and now to be part of and in the middle of the Fourth Industrial Revolution is absolutely a very exciting time. Since at ABB we talk about the IoTSP — the Internet of Things, Services, and People — and that's a bit of a difference to some of the others involved with these changes, let me tell you why we do that. In terms of things, it's probably going to be next year that there will be more connected things on this planet than people living on it. Services — both the people and the things need and can provide services, so that's clearly an undivided part. But we think the people dimension is really important for success here, because connecting, supporting, and ultimately empowering people — and the art of balancing the corners of this triangle — will be what is really decisive in creating value from this revolution. We all understand the trends of the digital world, so I won't spend time here. You've heard it often enough. And you also know what the industries we serve are looking for: safety, productivity, energy efficiency, uptime, speed, and yield. If you just zoom in one level more on the productivity dimension, you can see in this chart different names and nuances — cloud-controlled irrigation systems, cloud-controlled electrical vehicle charging networks, integrated operations across process automation and the power side, automated container ports, integrated vessel and fleet management, or simply the increasingly smart homes we surround ourselves with today. There is one common theme throughout all of that: the IoTSP. The Internet of Things, Services, and People is really happening as we speak, across industries, with solutions small as well as large. Let me take you through some examples. This first one is actually a mine that is older than ABB — the Garpenberg mine of Boliden, a mining corporation dating back to the 13th century. Today it is not only the most integrated but probably the most productive mine, after a number of technology changes that we've implemented there. This is about removing people from the danger zone and moving smarter sensors, better actuators, and the collaboration of those things with people and services together, to actually produce more tons of ore per person than any comparable mine. On the energy efficiency side, rather than ventilating at full power all the time, we're ventilating as needed in specific sections of the mine for the people and equipment present at certain times. This improves safety, energy efficiency, and productivity — because rather than people going down into the mine, drilling holes, planting explosives, evacuating, blasting, and going back in, removing people from the danger zone yields much more continuous production, which helps on all three dimensions. If you take another industry — and by the way, I see several of you taking photographs; you'll receive the slides from Laura as a PDF — this is a new plant currently being built in Brazil. It's an integrated solution for power, automation, and the process side. It's not only for the new mill they're building but also for the already existing mill right next to it — one integrated control solution for the whole thing. Now, if I've given you two examples of rather large integrated automation solutions, the hero of this slide is actually a low-voltage breaker. In this distributed oil-and-gas production setup in need of power, you'd say: aren't we talking serious process control systems here? Actually, our Emax 2 breaker has the capability of automating connected loads. It can energy-manage them, essentially telling connected loads: "We're going to have a surge if you consume power like this, so please reduce and go off, so I don't have to trip the whole branch." In terms of maintaining stability, avoiding surges, and managing power consumption, the breaker does this in what I'd call seven different languages. When we talk about the Internet of Things and I see some people asking whether it's real, I certainly didn't imagine even in my time as Chief Technology Officer — when we built prototypes of that nature — that we would see IoT technology and objects like low-voltage breakers in production so fast. These are not pilot cases; we have many of these applications already today. When we talk about services and people — the examples are really as spectacular as you get with big systems, but I find this one stands for exactly what we mean by the services and people side. This is an FPSO having a problem with a drive somewhere in the off-loading section. At some point, it's threatening production. The crew doesn't have the ability to find out what's wrong, so they get in touch with our support center. Together, they look at the data from the drive — the support center connects to the drive and the crew, and the drives experts analyze the data in detail, then help the employees on board restore the situation in less than five hours with minimum production loss. That's a great example of people and things getting together through the IoTSP, delivering value for a customer who would otherwise have lost a lot of production. From my perspective, the integration of things, services, and people — we haven't talked much about people yet, but I think that's a really big part of it. Last year we completed the acquisition of Cogent, a company specialized in creating intelligent ergonomics for the 24/7 operations environment, to help operators stay healthy and alert. It's important that we recognize the other dimensions — the things and connecting networks and services — all scale pretty well with Moore's Law, but we as people don't. If we really want to have a balanced triangle between the IoTSP, the people part — how we connect people, keep them motivated, keep them healthy in an environment of increasing automation and connection — is a key topic we want to continue focusing on. A typical pattern on the people side that we see in the IoTSP is this collaboration triangle between the crew on the ship — or in the mine, mill, plant, you name it — corporate headquarters or specialized engineering pools, fleet or asset management depending on the industry, and our operations center supporting them. I'll give you an example: a contract we won late last year for A.P. Moller, the largest container operator. It's a significant contract looking at how to efficiently route a vessel and a fleet of vessels. We work with both the crews and the Fleet Management Center to route them in view of energy consumption, weather, what waves do to the hull, and what disturbances the cargo experiences, so you get there in the most timely, energy-efficient, safe, and cargo-intact way possible. That's not a hardware delivery contract at all — it's a Things, Services, and People contract, which exemplifies what I'm trying to say. Now, looking ahead: I mentioned in the beginning that current numbers of connected devices suggest it won't be much longer than next year before we see more connected devices on this planet than people living here. A lot of supporting trends are going in the same direction — the IoTSP is happening right here as we speak. Making the difference from these possibilities is what really counts, focusing on customer outcomes — safety, productivity, energy efficiency, uptime, speed, and yield — from intelligent infrastructure, engineering, software, and services. So ladies and gentlemen, let me wrap up. I think it's a great time to be in automation. Many of the technology limits that, looking around the room, we all grew up with are going away. I am personally convinced that the best way to predict what the Internet of Things, Services, and People will be is to create it. Thank you.

Let me repeat the question for the recording. The question was: how will small and medium enterprises — in the example, from the UK — have a chance of actually getting to the Fourth Industrial Revolution, even though some of them are not yet entirely through the third? Let me give you examples. One of my favorite examples isn't a process automation example but a discrete manufacturing one. When I was starting to look in a German business I used to run, for orders where the business innovation side — enabled by connecting things, services, and people — was already happening, I actually found some orders in a robotics business where people were innovating how you produce shoes. They offered a website where you could custom-design your own shoe based on the geometry of your foot, your color preferences, and other features. That information was used to automatically generate a robot program, and the robot together with a machine would produce the shoe. These are not huge companies — they're small and medium-sized enterprises having a business innovation idea. Some of them are leapfrogging the third Industrial Revolution, much as in emerging markets people go directly to mobile phones without going through fixed-line first. It's very much like that. What it does for the industry is it eliminates inventory carrying cost and inventory risk. Rather than producing shoes in a remote country, shipping them by freight for weeks or months, and then at season's end finding nobody wanted size ten-and-a-half in green — scrapping all that inventory — instead you deliver exactly what the consumer wanted, customized, probably with a price premium, with no scrap in the process. And smaller players near-shore or onshore can play a game that had increasingly become entirely an offshoring play. I think there's a huge opportunity for small, medium, and large enterprises, and it's the business innovation based on technology trends that will make the difference.

Yeah, basically you can look back, you can look now, and you can look forward at new offerings in the space of remote diagnostics as well as services around that. The marine vessel example I used was one — instead of talking about a drive, I could have talked about medium and large switchgear and the connected relays there. Instead of the marine vessel, I could have talked about the more than 5,000 robots we already have connected today, which you can remotely monitor. These robots are often in small and medium enterprises that have no robot technician — maybe three or four robots — and we have contracts with them. The speaking robot can say: "Look, in my actual number three, I'm starting to feel a bit more slack, and it's about time somebody in the next 72 hours comes and does something about it — lubrication or a spare part." That kind of contract we have, and we're increasingly, for assets we've supplied to customers as well as other assets, in service relations where we look after an entire fleet of such assets. We have experts — whether it's kilns, mills, drives, and mining, or entire marine vessels and all the connected things on board — and then people who support that. It's there today, but it's a trend for more, so definitely a space to keep an eye on.

Okay, let me repeat the question. The question is about the obstacles — if they're not technology, are they in cybersecurity, cultural acceptance, or wherever else? First of all, I have to say I may have been simplifying as an ex-technologist. Clearly there are tons of technology challenges in the details and opportunities for getting this right and even better. There's also the question of at which point you want to standardize versus where you want to innovate and differentiate — all the lessons learned from previous waves of technology, including the introduction of digital field buses, still apply. Having said that, I would still say much of the innovation is going to be business innovation — what we do with that digital information to better connect things, services, and people. You mentioned cybersecurity: definitely that's one that must be right, because especially in the industries we serve, we're talking about mission-critical, 24/7 equipment. Cybersecurity is a must, and I would resist the temptation of putting it somewhere in a ranked list because it's simply a must. On cultural acceptance, I think it varies very much by society. We're having great experience with ABB's YuMi robot — a collaborative two-arm robot that doesn't need a fence between the robot and the person. You can literally work elbow to elbow safely, which is a complete departure from decades of robotics paradigm where you treat a robot like a wild animal that needs to be locked in a cage. Through such technologies, we're really making progress on the cultural side. We've seen people — both highly prominent individuals and others — try to stick their finger into the gripper or touch the robot with their elbow to see what happens. People are getting more used to these technologies, but not at a uniform speed, and we have to respect that. And then the part I mentioned about ergonomics: when automation systems get more and more powerful, the statistics of any major industrial customer show an enormous increase in how many loops a single operator oversees today. Yet we're still more or less the same human beings as the previous generation — you can't say that about the technology. Making sure that in an environment of more capable automation, humans remain engaged, healthy, and have optimal support from an intelligent infrastructure — I really see that as a very important priority. I don't believe for a second in completely lights-out factories that were visioned in the '80s and failed in the '90s, but I do believe in really empowering people with the Internet of Things, Services, and People.