"I never think about the future — it comes soon enough."

And he was right, of course.

So today, I'm here to ask you to think of

how the future is happening now.

Over the past 200 years, the world has experienced

two major waves of innovation.

First, the Industrial Revolution

brought us machines and factories, railways,

electricity, air travel,

and our lives have never been the same.

Then the Internet revolution

brought us computing power, data networks,

unprecedented access

to information and communication,

and our lives have never been the same.

Now we are experiencing

another metamorphic change:

the industrial Internet.

It brings together intelligent machines,

advanced analytics,

and the creativity of people at work.

It's the marriage of minds and machines.

And our lives will never be the same.

In my current role, I see up close

how technology is beginning to transform

industrial sectors that play a huge role

in our economy and in our lives:

energy, aviation, transportation, health care.

For an economist, this is highly unusual,

and it's extremely exciting,

because this is a transformation

as powerful as the Industrial Revolution and more,

and before the Industrial Revolution,

there was no economic growth to speak of.

So what is this industrial Internet?

Industrial machines are being equipped

with a growing number of electronic sensors

that allow them to see, hear, feel

a lot more than ever before,

generating prodigious amounts of data.

Increasingly sophisticated analytics

then sift through the data,

providing insights that allow us

to operate the machines in entirely new ways,

a lot more efficiently.

And not just individual machines,

but fleets of locomotives, airplanes,

entire systems like power grids, hospitals.

It is asset optimization and system optimization.

Of course, electronic sensors

have been around for some time,

but something has changed:

a sharp decline in the cost of sensors

and, thanks to advances in cloud computing,

a rapid decrease in the cost of storing

and processing data.

So we are moving to a world

where the machines we work with

are not just intelligent; they are brilliant.

They are self-aware, they are predictive,

reactive and social.

It's jet engines, locomotives, gas turbines,

medical devices, communicating seamlessly

with each other and with us.

It's a world where information itself

becomes intelligent and comes to us

automatically when we need it

without having to look for it.

We are beginning to deploy

throughout the industrial system

embedded virtualization,

multi-core processor technology,

advanced cloud-based communications,

a new software-defined machine infrastructure

which allows machine functionality

to become virtualized in software,

decoupling machine software from hardware,

and allowing us to remotely and automatically

monitor, manage and upgrade industrial assets.

Why does any of this matter at all?

Well first of all, it's already allowing us

to shift towards preventive,

condition-based maintenance,

which means fixing machines

just before they break,

without wasting time

servicing them on a fixed schedule.

And this, in turn, is pushing us towards

zero unplanned downtime,

which means there will be no more power outages,

no more flight delays.

So let me give you a few examples

of how these brilliant machines work,

and some of the examples may seem trivial,

some are clearly more profound,

but all of them are going to have a very powerful impact.

Let's start with aviation.

Today, 10 percent of all flights

cancellations and delays

are due to unscheduled maintenance events.

Something goes wrong unexpectedly.

This results in eight billion dollars in costs

for the airline industry globally every year,

not to mention the impact on all of us:

stress, inconvenience,

missed meetings as we sit helplessly

in an airport terminal.

So how can the industrial Internet help here?

We've developed a preventive maintenance system

which can be installed on any aircraft.

It's self-learning and able to predict issues

that a human operator would miss.

The aircraft, while in flight,

will communicate with technicians on the ground.

By the time it lands, they will already know

if anything needs to be serviced.

Just in the U.S., a system like this can prevent

over 60,000 delays and cancellations every year,

helping seven million passengers

get to their destinations on time.

Or take healthcare.

Today, nurses spend an average

of 21 minutes per shift

looking for medical equipment.

That seems trivial, but it's less time spent

caring for patients.

St. Luke's Medical Center in Houston, Texas,

which has deployed industrial Internet technology

to electronically monitor and connect

patients, staff and medical equipment,

has reduced bed turnaround times

by nearly one hour.

If you need surgery, one hour matters.

It means more patients can be treated,

more lives can be saved.

Another medical center, in Washington state,

is piloting an application that allows

medical images from city scanners and MRIs

to be analyzed in the cloud,

developing better analytics

at a lower cost.

Imagine a patient

who has suffered a severe trauma,

and needs the attention of several specialists:

a neurologist, a cardiologist,

an orthopedic surgeon.

If all of them can have instantaneous and simultaneous access

to scans and images as they are taken,

they will be able to deliver better healthcare faster.

So all of this translates into better health outcomes,

but it can also deliver substantial economic benefits.

Just a one-percent reduction in existing inefficiencies

could yield savings of over 60 billion dollars

to the healthcare industry worldwide,

and that is just a drop in the sea

compared to what we need to do to make healthcare

affordable on a sustainable basis.

Similar advances are happening in energy,

including renewable energy.

Wind farms equipped with new remote monitorings and diagnostics

that allow wind turbines to talk to each other

and adjust the pitch of their blades in a coordinated way,

depending on how the wind is blowing,

can now produce electricity at a cost

of less than five cents per kilowatt/hour.

Ten years ago, that cost was 30 cents,

six times as much.

The list goes on, and it will grow fast,

because industrial data are now growing exponentially.

By 2020, they will account for over 50 percent

of all digital information.

But this is not just about data, so let me switch gears

and tell you how this is impacting already

the jobs we do every day,

because this new wave of innovation

is bringing about new tools and applications

that will allow us to collaborate

in a smarter and faster way,

making our jobs not just more efficient

but more rewarding.

Imagine a field engineer arriving at the wind farm

with a handheld device telling her

which turbines need servicing.

She already has all the spare parts,

because the problems were diagnosed in advanced.

And if she faces an unexpected issue,

the same handheld device will allow her to

communicate with colleagues at the service center,

let them see what she sees,

transmit data that they can run through diagnostics,

and they can stream videos that will guide her,

step by step, through whatever complex procedure

is needed to get the machines back up and running.

And their interaction gets documented

and stored in a searchable database.

Let's stop and think about this for a minute,

because this is a very important point.

This new wave of innovation is fundamentally

changing the way we work.

And I know that many of you will be concerned about the impact that innovation might have on jobs.

Unemployment is already high,

and there is always a fear that innovation will destroy jobs.

And innovation is disruptive.

But let me stress two things here.

First, we've already lived through

mechanization of agriculture, automation of industry,

and employment has gone up,

because innovation is fundamentally about growth.

It makes products more affordable.

It creates new demand, new jobs.

Second, there is a concern that in the future,

there will only be room for engineers,

data scientists, and other highly-specialized workers.

And believe me, as an economist, I am also scared.

But think about it:

Just as a child can easily figure out

how to operate an iPad,

so a new generation of mobile and intuitive

industrial applications will make life easier

for workers of all skill levels.

The worker of the future will be more like Iron Man

than the Charlie Chaplin of "Modern Times."

And to be sure, new high-skilled jobs will be created:

mechanical digital engineers who understand

both the machines and the data;

managers who understand their industry

and the analytics and can reorganize the business

to take full advantage of the technology.

But now let's take a step back.

Let's look at the big picture.

There are people who argue that today's innovation

is all about social media and silly games,

with nowhere near the transformational power

of the Industrial Revolution.

They say that all the growth-enhancing innovations

are behind us.

And every time I hear this, I can't help thinking that

even back in the Stone Age,

there must have been a group of cavemen

sitting around a fire one day

looking very grumpy,

and looking disapprovingly at another group of cavemen

rolling a stone wheel up and down a hill,

and saying to each other,

"Yeah, this wheel thing,

cool toy, sure, but compared to fire,

it will have no impact.

The big discoveries are all behind us."

(Laughter)

This technological revolution

is as inspiring and transformational

as anything we have ever seen.

Human creativity and innovation have always propelled us forward.

They've created jobs.

They've raised living standards.

They've made our lives

healthier and more rewarding.

And the new wave of innovation

which is beginning to sweep through industry

is no different.

In the U.S. alone, the industrial Internet

could raise average income by 25 to 40 percent

over the next 15 years,

boosting growth to rates we haven't seen in a long time,

and adding between 10 and 15 trillion dollars to global GDP.

That is the size of the entire U.S. economy today.

But this is not a foregone conclusion.