Harnessing the Internet's potential could boost global GDP by $10 trillion to $15 trillion over 20 years, if business fully exploits it, a new survey from General Electric Co. (NYSE: GE) estimates.
Using what GE, the No. 1 U.S. conglomerate, dubs “the industrial Internet,” enterprises connecting machines with analytics can reduce waste, operate at higher efficiency and boost U.S. productivity between 1 percent and 1.5 percent annually.
GE, based in Fairfield, Conn., issued the survey Monday. It was prepared by chief economist Marco Annuniziata and global strategy and analytics director Peter C. Evans.
Over the past year, GE has said it plans to hire as many as 4,000 software engineers and build a major new development center in San Ramon, Calif., to house them.
The manufacturer of industrial and consumer products ranging from jet engines to nuclear-magnetic resonance scanners to refrigerators said the Internet can reduce inefficiency by allowing products to communicate over the cloud.
The experts estimate major sectors of the economy, like health care, waste as much as $731 billion annually now by not operating efficiently. Just a 1 percent improvement could lead to global savings of $63 billion by 2027.
The energy sector, which now accounts for $1.9 trillion annually, could save $20 billion annually merely by being 1 percent more efficient. That could lead to a $300 billion annual saving by 2027, the GE experts reported.
A third sector, transportation logistics, accounts for about $6 trillion annually, or about 10 percent of global GDP. The industrial Internet could chop as much as 10 percent, or about $5.6 billion alone each year in savings.
Major airlines now waste as much as $284 billion now. A mere 1 percent cut in jet fuel waste could trim waste as much as $30 billion by 2027.
Shares of GE fell 12 cents to $20.92 in Monday trading.