The future is digital and the decisions are now
17 July 2017
At Goodwood Festival of Speed I recently flew in an all electric plane, writes Juergen Maier, CEO of Siemens UK. It was an experimental two-seater – but it is a sign of things to come. By 2030 we can expect that a hybrid version of this technology will be sufficiently tried, tested and scaled-up to be running short-haul commercial flights to domestic and European destinations. A key enabler for this technology is digital, smart simulation and optimisation software, without which the performance increase of the battery and motor system to allow it to fly for an extended period would not be possible.
The impact of realising such an innovation is in some ways subtle but in others huge for our society and our industry. Maybe future generations will look back and laugh at the noisy, polluting, smaller planes we used to fly and wonder how we and those living on their flight paths managed. Perhaps, like many other veteran vehicles at Goodwood, old favourites will be on display as fabulous historic icons while everyday commuter planes will be clean, electric and almost silent.
It’s exciting to witness these transitions as they rarely happen overnight. These are uncertain times – political volatility has been rife since the UK election and we are still unclear about the many facets of Brexit and what the future holds for business. But now is the time for businesses, large and small, to come together and not let political instability derail Britain’s need to invest in new technologies and revitalise its industrial sectors. We are essentially a nation of innovation, and we must demonstrate that the UK has the entrepreneurial spirit to lead a new digital industrial revolution.
We need to have a long-term economic vision for the country. A clear view of what it is we want to make, where we want to be and how we are going to get there. Part of how we can make that happen is by embracing the one area we can be optimistic about when it comes to business policy – and that is industrial strategy. It’s one of the few areas of policy left where there is a tremendous amount of consensus. For me, it is all about creating the jobs of the future, creating the new industries of the future and upskilling the workforce.
Successful industrial strategy will be about innovation, new technologies being created in the UK and new industries built around these new ventures. In its most basic form industrial strategy will need a distinct digital thread running through its core. It will not be about reviving long-gone industries, but rather about building the new ones in artificial intelligence, virtual reality, big data, machine-learning and simulation platforms – the merging of creative, digital consumer tech and industrial. It will be delivered by a new wave of start-ups and SMEs, a few of which will scale up to become significant corporations. It will create the wealth the country needs to fund its public services. It should be a key focal point for economic policy – and the business community should help shape it for the benefit of the whole country.
In the UK we excel at digital and have the ingredients for the foundation of a new industrial revolution. I’m already discovering this as I continue to lead a review into “industrial digitalisation” on behalf of UK businesses, reporting to the government as part of the industrial strategy. I’ve been working with more than 200 companies, large and small, alongside academics to understand how digital can take off in UK manufacturing and industry. The review is about finding how the increasing use of digital technologies can enable industry to become much more productive and competitive, creating more jobs in the process. The early findings are promising. We know that by that by leading, innovating and adopting digital in industry the UK could achieve
productivity gains of up to 25 per cent, manufacturing sector growth of up to 3 per cent – delivering annual growth of approximately 0.5 per cent of GDP.
We also need to prepare our cities for the impact of digital, upgrading our infrastructure and transport to cope with new industries and technologies as two thirds of us are destined to live in UK cities in the next 30 years. By 2030 London is expected to have 9.9 million inhabitants, up 15 per cent from 2016 – with that will come 50 per cent more demand on transport services. We expect to be producing 60 per cent less CO2 and 25 per cent of our energy will be from distributed energy sources. This means change, even if it subtle, such as commuter planes going electric, needs to happen.
Britain made its way in the world by being at the forefront of the first industrial revolution in the 19th century. It capitalised on the second by leading in methods of mass production in the early 20th century. In the 1970s, we lost our way and missed out on the third revolution of automation. Now is the time to fully immerse ourselves in digital. That way, we will be at the forefront of the fourth industrial revolution and be ready for whatever 2030 promises. I personally believe the overall conditions are better now than they have been for several decades. It’s down to today’s innovators and business leaders to get involved – to work in partnership with the public sector to ensure longer-term thinking, and make sure businesses invest and innovate to create a digitally led industrial Britain.