Industry 4.0
Many of the Industry 4.0 use-cases such as real time asset monitoring and predictive maintenance, mass customisation, remote surveying and surveillance are now possible thanks to its technologies such as Internet of Things (IoT), 3D printing, and Unmanned Aerial Vehicles or drones. This will have a profound impact across sourcing, manufacturing, and retailing value-chains in the decade to come. And there lies business opportunity for providers of these solutions.
Internet of Things (IoT)
IoT nodes are the building blocks of Industry 4.0 on which various use-cases are constructed. Essentially combining physical sensing, connectivity, analytics, and control technologies, IoT is able to deliver solutions not possible hitherto such as remote monitoring of health of asset or under taking predictive maintenance. This would help industrial companies leapfrog to next curve of productivity as ‘lean’ tools and techniques have already been tapped to a large extent. This also presents an opportunity to IoT players – both solution providers (‘vertical model’) and platform providers (‘horizontal model’) – to partner with their customers in cracking more use-cases.
Additive manufacturing (or 3D printing)
Additive manufacturing or 3D printing is already playing an important role in sectors such as aerospace and healthcare, by ushering in manufacturing innovations not possible through traditional technologies. Rapid prototyping, highly customised designs, ultra-complex designs are some of these innovations. As population of installed 3-D printers across the world is rising, cost of 3D printing is coming down, making it increasingly viable for mass manufacturing. This will be a real game changer for global manufacturing.
Unmanned Aerial Vehicles (or Drones)
Drones are not limited to personal use-cases (the ones we all have seen in events and in weddings!), but are finding more and more industry applications such as surveying, surveillance, and in future can also possibly be used for moving things from point A to point B. Regulations have so far kept pace with the industry, enabling adoption of drones for these commercial use-cases. This presents an opportunity both for users of these services and for solution providers, most of whom happen to be start-ups.
Digital
Indian industries are yet to fully harness power of digital and analytics led innovations in business models. This is changing. Starting point of this change is willingness on part of many industry leaders to fully embrace digital technologies in their businesses.
‘Pay as you go’ business models such as ‘Software as a Service’
Robust and reliable data capturing is enabling various ‘pay as you go’ models such as using Software as a Service or paying for ‘uptime’ instead of making a heavy upfront capital expenditure. This greatly improves ability of smaller businesses, who may not be able to pay for an on-premise solution, to access cutting-edge solutions. Incumbent providers of equipment and services will need to re-orient their business models. This also opens up a window of opportunity for new challengers to come in and innovate around niches.
Analytics
Data may well be the new oil, but it is in analytics of data where most of the value will reside. As an example, firms implementing Industry 4.0 solutions often face biggest hurdle in analysing collected data and drawing out meaningful inferences. Demand is outpacing supply of skills in data science. Traditional technology services players need to ramp-up their advanced analytics capabilities including artificial intelligence and machine learning. Even then there will be plenty of room for new players to come in. Industry-backed solutions solving for real pain-points for the industry could win over generic ‘horizontal’ offerings.
Digital infrastructure
To supporting the wide adoption of digital across consumers and industries, country will need supporting infrastructure of hardware and connectivity. Roll out of fifth generation connectivity bandwidth will provide back-bone connectivity of the digital systems. Global standard (Tier IV) data storage infrastructure will be needed to support billions of transactions on digital platforms. Some of this infrastructure will be offered under Infrastructure as a Service (IaaS) business models.
Mobility
Automotive as an industry has seen little change in its basic product technology for many decades. And it could go through a massive change in a matter of a few years – a ‘once in a lifetime’ change. Driving this change are mutually re-enforcing trends such as electric mobility and shared mobility, massive investments in the logistics infrastructure, and emergence of new services based business models that can completely alter traditional value pools.
e-mobility
Notwithstanding differing views on how many Electric Vehicles (EVs) will be sold in India in 10 years from now, bidirectionally OEMs, their suppliers, and policy-makers are all aligned on pursuing EVs as next-gen mobility technology. This will have massive impact on automotive and related businesses as share in mobility value-pool will shift to new systems such as batteries. A lot of eco-system comprising battery manufacturing or assembly units, charging infrastructure, end of life management needs to come together. This provides an opportunity for both incumbents and new challengers.
Logistics infrastructure
With massive public investments across all asset classes of logistics infrastructure – airports, railways, roads, ports – India will be able to lower its notoriously high logistics cost. This will prompt businesses to rethink their supply-chains, many of which are built factoring old inefficiencies. This also presents opportunity for private players with access to capital to participate in build out of India’s next generation of logistics infrastructure through various public-private partnership models.
Mobility and logistics services
Traditionally mobility revenue pools have been concentrated in manufacturing, distribution, and after-sales service. With innovations in connected and shared mobility, new business models offering mobility (or logistics) as a service are emerging. These business models will fundamentally reshape mobility revenue pools. This is somewhat equivalent to emergence of a new ‘software and service’ layer in an otherwise hardware dominated sector. This could completely transform the way automotive firms think of their business.
Sustainability
Sustainability over the last decade has become a viable business opportunity. This change has been brought forward on account of more funding, supporting regulations, technological innovations, and rising consumer awareness. This has led to emergence of opportunities across sectors such as energy, mobility, materials, and urban utilities with sustainability at their core. Industry players should take a serious and hard-nosed business view of these opportunities. Dismissing sustainability as a ‘good to have’ in today’s scenario will not just be unmindful of environmental challenges, but will also not be good business judgement.
New energy landscape
Advent of renewable energy is changing the entire energy landscape. With rising energy efficiency, continual price reduction of renewable sources, and innovations in energy storage, it is uncertain if India would ever need to build a new thermal power station say after another decade. This holds significance for firms that are in business of power generation, firms that are manufacturing equipment for them, firms that specialise in executing power plant projects, and for end-users of power.
Emission control technologies
Indian policy-makers, regulators, and judiciary have ensured that country stays at-par with global standards on emission norms. Automotive sector and many industries face stricter emission norms with BS-VI roll-out and new SOx and NOx emission norms for coal plants. Makers of core materials like steel and cement are striving to cut down CO2 emissions e.g., through using recycled scrap in case of steel. As players in these sectors prepare themselves to ensure compliance to these norms, it presents a new business opportunity for supplier of these solutions.
Urbanisation
India is urbanising with a consistent and rapid pace. The quality of urbanisation though has been found wanting with huge stress on water, waste, and housing in urban areas. Improving quality of urban infrastructure is going to be the focus of urban local bodies in years to come. This presents business opportunities to providers of solutions to these problems. An efficient solution will combine traditional project execution efficiency with modern technologies such as IoT e.g., for monitoring water leakages.
