The Machine Economy promises significant benefits for people, businesses, and the broader economy by:
- Reducing costs and increasing revenue: For example, IoT enables industrial equipment manufacturers to implement process automation, just-in-time (JIT) manufacturing, remote monitoring, and predictive maintenance.
- Improving operational efficiency: M2M sensors enable organizations to monitor and track assets right from inventory across the entire supply chain.
- Creating new value: New marketplaces, industries, and business models will emerge (e.g. “as a Service” business models).
- Mitigating risks associated with owning assets: Reduces the need for businesses to own, maintain, and manage assets.
- Resulting in positive gains across the sales funnel: As the utilization of shared machines increases, this leads to cheaper products and services as cost per unit decreases.
- Transitioning from CapEx to OpEx: Companies can hire/lease out equipment based on specific needs and planned production cycles. By saving on the large upfront investment cost of purchasing machines outright, new businesses can participate as a result of reduced barriers to entry.
- Strengthening workforce and output: With a shortage of skilled workers and increasing complexity, IoT and complementary technologies can support employees in working on machines.
- Increasing transparency through data: The adoption of smart sensors enables companies to strengthen their domain knowledge to satisfy consumer needs and improve on sustainable business practices.
Machines Enable the World of Tomorrow
The future of the Machine Economy can be divided into two forthcoming scenarios:
1. Decentralized Autonomous Organizations (DAOs)
DAOs tackle the age-old problem of governance and are designed to operate without human oversight by using a model underpinned by a network of smart contracts on a blockchain (e.g. Ethereum). In business, we will likely see many more DAOs emerge in areas of smart property management, autonomous vehicles, and financial services to enable companies to automate parts of their business to achieve rapid scalability without sacrificing the quality of service.
2. Lights-out Manufacturing
As automation takes over production systems, entire factories will be driven by machines optimizing themselves, communicating with each other, and responding with root cause analysis (RCA) that identifies the origin of problems and develops an approach to solve them with no human presence on-site.
Over the next few years, we will see a profound shift in industrial processes, where there’s increased synchronization between different components across the value chain, and machines are making decisions and independently reacting to the world around them. As we transition toward the Machine Economy, for businesses to truly leverage the opportunities that exist, we need machines to do more than automate mundane tasks. We need to add another layer to business solutions to create more value out of the services that machines provide.
With a backbone of disruptive technologies, machines will have the power to make their own decisions, buy and sell services, and actively take part in the economy as an entirely new class of market participant — the Machine Economy is on the horizon.
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