The big shift – three transformative trends

Three major trends that are changing the world from ABB's perspective

Last week, I had the opportunity to speak at the Swiss Economic Forum on the topic of “The big shift”. From ABB’s perspective, there are three major trends that are changing the world

The Swiss Economic Forum (SEF) is Switzerland’s local version of the World Economic Forum meeting, which takes place in Davos every January. I was honored to be able to give a keynote presentation before some 1,350 decision-makers from the worlds of business, science, politics and the media in Interlaken on June 6.

For ABB, the biggest shift in terms of markets and customers is undoubtedly the rise of the developing world. North America and Europe will remain vitally important for ABB, but it is the emerging markets of Africa, Asia and Latin America, which is where the growth will come from in the future.

In the next ten years, two-thirds of global economic growth will be in developing countries, and the biggest growth story is likely to be Africa, which is already home to the world’s fastest-growing markets. ABB employs 5,200 qualified people across the continent, one third of whom are engineers. On current demographic trends, Africa will have more people than China and India combined by 2040, and we can expect demand for electricity to soar as incomes rise and economic development advances. It is a similar story in India, where there are an estimated 400 million people without access to electricity.

Fortunately, these countries will not have to wait as long as the developed world did for electricity to start flowing because of the ongoing shift in the energy and power industries. Today, renewable energy sources such as solar and wind are bringing power to remote areas that would otherwise have remained cut off for decades. In India, for instance, an ABB-developed solar-powered water pump drive is making a huge difference to the lives and livelihoods of local farmers, who would otherwise struggle to irrigate their crops.

The changing power landscape

The challenge posed by renewables is not to be underestimated. Whereas in the past, electricity came from a limited number of large power plants and was transmitted from producer to consumer, renewables are dramatically increasing the complexity of the grid. Today in Germany, there are 1.2 million solar photovoltaic installations feeding energy into the grid. On a sunny or windy day, renewables can produce enough power for 70 percent of the country’s electricity demand. But when the sun goes down, or the wind drops, output from renewables can fall dramatically, compromising grid stability.

One solution, which has the potential to transform the global power grid is energy storage. Large-capacity batteries are now reaching a point and a price level where we can start to envisage electricity grids powered solely by renewables. (At present, traditional power plants or diesel generators must be maintained as back-ups to ensure power keeps flowing.) In both developed countries and emerging ones, renewables combined with energy storage would make possible small self-sufficient power networks known as microgrids or ‘nanogrids’. ABB is already installing control solutions for such grids on islands in the Atlantic and in Alaska and we expect such grids to proliferate in the future as battery prices fall further. Just last week, we launched a storage solution capable of storing 4-6 kWh of power in a private household.

Industry 4.0

Another big shift is the increasing digitalization and automation of industry – the so-called “internet of people, things and services”. This is enabling new solutions and taking industry to the next level of productivity. In developing countries, machines are increasingly driving productive, energy-efficient manufacturing, improving quality standards and freeing human beings from having to perform dangerous, monotonous work.

Advances in robotics are allowing humans and robots to collaborate with each other in ways that would have been inconceivable until recently. ABB’s new dual-arm robot is an entirely new concept in robotics that has sensor technology which enables it to gauge tolerances – so as to apply the correct amount of pressure – and to respond to the environment around it, which means it can work safely alongside humans, with no need for cages and other protective equipment.

Far from taking jobs away from people, we see increasingly that robots and automation support industries to move up the value chain. Countries with the highest density of robots, such as South Korea, Japan and Germany, tend to have the lowest unemployment rates and China, faced with a contracting labor force, is now the world’s largest market for robots.

A related development in industry is the explosion of mass data. Advances in sensor technology mean that our machines are increasingly capable of monitoring themselves and the world around them and sending that data to diagnostic control centers which determine whether human intervention is required.

An impressive example of this is a floating production, storage and offloading (FPSO) vessel called GOLIAT that is to be moored 50 kilometers off the coast of Norway in the Arctic. All of ABB’s electrical and operating systems on the vessel are monitored by sensors, which means diagnostics will be carried out remotely from a control center on the mainland. The days of human beings having to live for weeks or months on oil and gas rigs far out at sea are coming to an end.

ABB is at the forefront of these developments and we are actively driving the technologies that are making them possible through both our own research and by working with leading institutions such as the Federal Institute of Technology in Zurich (ETH) and with those pioneers of clean technology, Solar Impulse, who are aiming to fly an aircraft powered entirely by solar energy around the world in 2015.

Together, we are pushing the boundaries of technology and innovation to decouple economic growth from energy consumption and environmental impact, and to achieve a better world.

Watch the highlights of my speech:

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