Digitalization: fast track to “Made in China 2025”

Digital technologies offer China a fast way to upgrade its industries and for enterprises to achieve a quantum leap in efficiency and productivity

Dr. Ulrich Spiesshofer, CEO, ABB Ltd.

With China well on track to boost its global competitiveness through “Made in China 2025”, the widespread adoption of digital technologies could further accelerate progress in energy efficiency and productivity, as well as support China’s ambition to transform itself from a “big” into a “strong” manufacturer.

Investment in advanced technologies in China is already at a high level – it is the world’s largest and fastest-growing robotics market, for instance – but it still has a long way to go to catch up with advanced economies in terms of automation and productivity. Currently, China has 49 robots per 10,000 workers in industry, compared with 176 in the United States, around 300 in Japan and Germany, and 531 in South Korea, according to the International Federation of Robotics. Moreover, productivity levels are less than a tenth of those of Europe, Japan and the US (ILO and Chinese National Bureau of Statistics).

That said, few countries are better positioned than China to embrace the digital revolution. It already has almost a quarter of the world’s internet users – more than the next three countries combined (the US, India and Japan), it is the world’s largest digital retail market, and it has by far the most machine-to-machine mobile connections. The challenge is to integrate Chinese enterprises into the digital economy by connecting their robots, machines and plants to the industrial internet.

One advantage of digitalization is that enterprises can reap benefits quickly without needing to make substantial investments in new plant and equipment. For instance, an easily affordable smart sensor device launched by ABB last year connects low-voltage electric motors to the industrial internet, allowing them to be continuously monitored. The sensor transmits data on vibration, temperature, loads, and power consumption to the intelligent cloud and alerts are generated as soon as any of the parameters deviates from the norm. That way the owner can take preventive action before the motor malfunctions. Cyber-security is assured because there is no electrical connection between the sensor and motor, so no unauthorized party can gain control of the motor through the unit. Data is transferred to servers using industry standard encryption protocols, and stored in an encrypted form in the cloud.

Early indications are that this smart sensor solution leads to a reduction in downtime of motors by up to 70 percent and extends their lifespan by up to 30 percent. Acting on the data to optimize the motor’s performance reduces energy consumption by as much as 10 percent. If all of the 300 million industrial electric motors worldwide were equipped with these devices, the energy savings would be equivalent to the output of 100 large power plants.

Digital technologies, such as sensors, cloud computing and processing power, have made it possible to remotely monitor all manner of equipment, allowing technicians to pre-empt malfunctions, as well as to track every product throughout production and delivery processes. Applied across industrial plants, the improvements in lead time, productivity and quality can be exponential.

However, for many enterprises, the challenge is knowing what to do with all the data generated by their equipment and systems. In some cases, the “data deluge”, as it is known, has overwhelmed many companies, leading them to scale back or even put on hold plans to digitalize their operations. Industrial companies can avoid this pitfall by working with partners that provide not simply data, but actionable information that they can apply directly to their operations.

ABB is one of a small number of companies that is able to provide such information because, as well as digital know-how, we have one of the largest installed bases in power grids, industrial robotics, and control systems for industry. We analyze data from our customer’s machines, robots and facilities, compare it with everything we have learned from our global installed base and then provide our customers with actionable information that they can use to optimize their operations. Because no single solution can keep increasingly interconnected systems secure, ABB uses multiple security layers to detect and deter threats, in close collaboration with customers.

In China, digital technologies have enormous potential in the areas of energy, industry, and transport and infrastructure. To achieve its energy transition, China’s needs high-voltage transmission infrastructure supported by intelligent grids to manage power flows from intermittent renewables and route power to where it is needed. In industry, China needs to improve uptime, speed and yield as well as upgrade its industrial base by automating its industries. Finally, to tackle urban air pollution and manage its expanding mega-cities, China need to transition rapidly to electric mobility and improve the energy performance of buildings and infrastructure.

Digital technologies offer a fast and effective way to address these challenges, as well as to move up the industrial value chain. In addition, there is strong evidence to suggest that digital technologies act as a spur for innovation by placing advanced technologies within reach of entrepreneurs. This is evident with the staggering success of online retailer Alibaba, taxi-hailing app Didi Chuxing, and messaging and electronic payments platform, WeChat. The more it embraces digital technologies for industry, the more China can expect to see pioneering technology solutions emerging in the industrial space.

Dr. Ulrich Spiesshofer is President and CEO of ABB Ltd, a pioneering technology leader in electrification products, robotics and motion, industrial automation and power grids, serving customers in utilities, industry and transport & infrastructure globally. Continuing a more than 125-year history of innovation, ABB today is writing the future of industrial digitalization and driving the Energy and Fourth Industrial Revolutions. ABB operates in more than 100 countries with about 132,000 employees.

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