It is relatively easy to digitize a song or a bank account. Yet fully digitizing physical industries such as manufacturing and agriculture has proven much more challenging. Manufacturers have taken the first step towards digitization by putting sensors into existing products such as turbines and tractors and using the resulting data to improve performance. The goal is now to turn data collection and analysis into a new revenue stream.
But data monetization is only one possible application of IT to manufacturing, and perhaps not the most effective at creating sustainable new markets or new business models. An alternative digital future for manufacturing, the “Internet of Goods,” is emerging. Three trends could lead to a manufacturing sector that uses information technology to boost productivity and create new markets.