The Industrial Internet Comes Of Age In China

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Danny Mu
Principal Analyst
March 16, 2018

A few weeks ago, the China Industrial Internet Summit — the country’s leading industrial internet conference — was held in Beijing. Dozens of leading manufacturing firms and technology vendors from the US, Germany, and Japan shared their latest achievements and future strategies with thousands of participants. The weather was cold, but the industrial internet is super-hot! 

I have been following smart manufacturing, Industry 4.0, and the industrial internet for more than four years now; these topics are gaining significant popularity in China’s manufacturing industry. Here are my key takeaways for this year’s two-day summit:  

  • Powerful support from China’s government is driving the transformation. Made in China 2025 is already a well-known national strategy. Late in 2017, the China State Council published its Internet Plus Advanced Manufacturing Industry report to further guide the Chinese manufacturing industry’s digital transformation. During the summit, government representatives from Guangdong, Shanghai, and Henan shared their road maps and financial and policy support initiatives to support this manufacturing transformation. It is indeed an appropriate time for manufacturers in China to start their transformation journey to the industrial internet. 
  • A flurry of IoT platforms from diversified players are creating choice and confusion. Telecom providers like China Mobile, China Unicom, and China Telecom; ICT firms like Alibaba and Huawei; software firms like SAP and PTC; and manufacturing firms like Foxconn and Haier introduced dozens of platforms. These firms boast that their platforms can cover multiple layers of the IoT stack — but in reality, they still struggle to differentiate their capabilities and foster broader ecosystem collaboration. Big manufacturing firms also find it challenging to build and market IoT platforms. 
  • Startups and crowdsourcing enrich the industrial internet ecosystem. Startups like landing.ai (founded by Baidu’s former chief AI scientist Andrew Ng), K2Data, and RootCloud demonstrated their capabilities at the summit. These firms were born lean, nimble, and open and will play a key role in China’s industrial internet. Crowdsourcing is another fast-developing force that will drive the creation of relevant industrial internet use cases. Several vendors have already opened their platforms to external developers, launching competitions to create millions of industrial apps. 

This summit clearly showed the ambition of Chinese manufacturers to compete on a global stage, leveraging China’s own high-tech products. Next year, I would like to see the various players work together to advance the industry’s maturity on topics like deep collaboration between information technology and operational technology, business model evolution, and cybersecurity. 

Forrester has already published a series of reports discussing the new generation of manufacturing. Soon I will also publish a more in-depth analysis of the state of the Industrial IoT in China. To discuss smart manufacturing further, please email me at dmu@forrester.com, set up an inquiry, or request a briefing. 

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