What's the next economic revolution? According to General ElectricChief Economist Marco Annunziata, it's the "industrial Internet" — intelligent machines such as jet engines, power turbines and medical devices.
In an interview Monday on CNBC's "Squawk Box," Annunziata said companies like GE are developing devices with embedded sensors generating enormous amounts of data that can then be analyzed to ensure the devices are performing correctly. For example, an airplane engine might have a sensor that can perform maintenance before something goes wrong, and not as the plane is due to take off — thus avoiding air traffic delays.
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Annunziata said smart machines will be able to manage hospital beds and medical devices, potentially providing health care at a lower cost.
But how will these sophisticated devices make health care less expensive, if the devices are expensive to create? Annunziata said he believes there will be increasing pressure on the health care sector to be more cost-efficient, which is why GE and other companies are developing the technology in advance.
"The technology is getting more powerful, and incentives to take advantage of the technology to lower costs are also getting extremely strong right now," he said.
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He said each device will be made of various moving parts, and each part will be associated with a different wireless sensor. The sensors send information to "the cloud," where it is analyzed. "There is virtually no limit to the improvements in performance you can generate," Annunziata said.
He said a byproduct of these new devices is the use of so-called Big Data.
"You're embedding intelligence into the data," he said. "You're creating situations where the data themselves — whether it's the result of an MRI in a hospital or the performance of a jet engine after a flight — the data itself will know where it needs to go and get the technician, the doctor involved as quickly as possible."
The bottom line? "A huge impact on productivity, fast economic growth, faster income growth and faster and faster jobs growth," Annunziata said. "It's huge and it's here. It is starting now."
(GE is the minority shareholder of NBCUniversal.)