Pinto Prognostications 2012

I have a hunch that 2012 will not be another same-old, same-old year for industrial automation. Expect opportunity niches to arise around industrial wireless, Ethernet, mobile interface technologies.

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In the United States, the trend to outsource jobs to lower-cost countries is slowing down. Many companies are reversing earlier offshore outsourcing decisions for skilled jobs as well as regular manufacturing work. Businesses are recognizing that cheap, exploited foreign labor is only a short-term expedient. There are domestic outsourcing alternatives that are both financially sound and good for American workers. Leading the reverse trend are the kinds of jobs that are considered core to the business, requiring higher skills and training than what is typically available offshore.

More companies will engage in “crowd sourcing”—piecing out jobs or even parts of jobs to whoever can and wants to do them. This will be a major change from conventional, large-company, full-time, location-based employment. The next few years will determine whether this trend is just a short-lived expedient or a major, competitive advantage.

All the major U.S. automation companies are growing, and have good cash reserves. They have been investing a lot of in offshore employment with results that may be more cost effectively achieved by domestic resources and by local, competitive outsourcing. The short-term trends are all positive.

Technology growth trends

Industrial wireless: Standards are settling down into reality. Wireless will continue to generate new growth beyond just wire-replacement. Major suppliers are reporting revenues in the tens of millions of dollars. The success is stimulating confidence and wider usage in larger projects for more end users. New markets and applications are generating revenues and market acceptance. Major suppliers only offer expensive wireless extensions to their conventional transmitters, inhibiting growth. Perhaps some smaller company can break the barrier by offering small, inexpensive wireless sensors with a variety of new features and functions.

Industrial Ethernet: In the factory and process control environment virtually everything is being connected to everything else via central networks and the Internet. Automation systems based on standard network architectures are spreading into all corners of the factory and plant floor. Enhanced industrial Ethernet protocols such as EtherCat, Modbus TCP and EtherNet/IP that promote transparency from sensors to enterprise systems will continue to proliferate.

Pervasive Internet: Today’s centralized controls and displays will give way to peer-to-peer input/output (I/O) and the other ingredients of decentralized automation systems. Industrial I/O products will become increasingly more autonomous in functionality, with vastly more robust operation in systems that include literally millions of I/O points. Software that orchestrates how, when and where these devices operate will be the key to managing the complex, adaptive systems of the future.

Portable operator interface: The old-style operator control console interface is giving way to access via ubiquitous, compact WiFi equipment. More diagnostics and service functions can now be viewed via mobile phones, with cheap but effective two-way audio and video visibility to aid trouble-shooting and service procedures. Most automation companies are now offering advanced features and functions using iPad, iPhone and Droid apps. New functions are emerging with increasingly vertical-application-specific designs using pervasive consumer technology.

There are several growth opportunities hiding in plain sight and entrepreneurs—risk takers—will see them first. Perhaps, some of the recently unemployed will be the ones to jump at the possibilities. There are an incredible number of exceptionally talented individuals scurrying around the automation infrastructure, looking for an “opportunity” niche. This is their time to grab for the gold.

>> Jim Pinto is a technology futurist, international speaker and automation industry commentator. You can email him at jim@jimpinto.com or review his prognostications and predictions on his website: www.jimpinto.com.

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