[MUSIC PLAYING]
MICHAEL PORTER: Today, at this moment,
there is a major inflection point just starting
to get underway, which is going to affect
not only competition and productivity in the economy,
but it's also going to affect humans and our role, and how
we work in society.
Where we've come from, really, has
to go back to a world in which products and machines were
physical.
They were mechanical.
Information was collected manually
and stored in paper files.
But then, starting in the early '60s, what
we like to call Wave 1, was the advent
of computers in the early '60s, which
allowed us to start automating various processes
across the value chain.
And those computers not only allowed
us to do the process more efficiently,
but also to collect and gather and analyze data in quantities
that we'd never ever had opportunities to do so before.
But then we started moving into Wave 2,
and that was driven by the advent of the internet.
We were able to start linking the parts of the value chain,
connecting the dots.
But the really big wave, the one that's
going to be the most significant in the long run,
is Wave 3, which is the advent of what we
call smart, connected products.
And that's created a lot of improvements
in productivity and capability of products and the value
that products can create.
But it's created, now, the next big problem.
The amount of data available is just overwhelmingly greater
than ever before.
How do humans actually access and utilize all this data?
We get data on 2D screens, flat screens.
And then we got to figure out how to translate it
into the real world.
Bridging the gap between digital and physical is taxing.
A great example of this problem is illustrated here.
We have a GPS screen in our car, and then
we have to look up at the real world through the windshield
and try to figure out how to take what we see on the screen
and actually make it real, in terms of, should we turn here
or should we turn 100 feet up the road.
And of course, as we're looking down at the screen
and looking back and trying to figure out what to do,
we make mistakes.
We're distracted.
Hopefully, we won't have an accident.
Well, to solve that problem, we have
to take advantage of the senses that we humans have.
The powerhouse of our senses for gathering information is sight.
When we look at a room, we get massive amounts
of information instantaneously.
The problem now is that the digital interfaces
we have today are really not maximizing
our most powerful information source, which is our sight.
Augmented reality is a set of technologies
that allow us to actually take the digital information we have
and the choices we have, and actually overlay them
on a human's view of the real physical world in real time.
What you see here is, the information
is not on the 2D screen on your dashboard in the car.
In heads-up display, the information
is actually overlaid on your windshield.
It's projected on your windshield.
So you're looking at the real world.
You're not having to look down and up.
You're seeing what you need to know overlaid
on the actual real world, where you're
going to have to make the choice about what to do about it.
And this just massively improves your capacity
to assimilate and process this information.
JIM HEPPELMANN: It starts with physical things.
And if these things are smart and connected products
or smart and connected operations,
that means they're streaming data up to the cloud.
We now have a way to interpret the sensor data.
And quite frankly, we could send control commands
back down to the objects out in the real world.
But when we're looking at the data,
we're not looking at the physical world.
And when we're looking at the physical world,
we're not really looking at the data.
What augmented reality does is it brings this data down
into devices.
Then, what I see becomes augmented with information
coming down from the cloud, from this digital twin,
and illuminates digitally what I see physically.
Now, it's hard to conceptualize AR,
and it's actually pretty easy to demonstrate it.
Say I want to interact with this motorcycle.
The software, looking through the computer vision technology,
can see that motorcycle.
This would work fine with a real motorcycle.
It's just a little difficult to bring the real motorcycle
into the room here for this event.
You see it's actually morphing between digital and physical.
Now it's a 3D CAD model of the digital twin.
Well, what could I do with this?
Well, I could do a sales and marketing use case.
And it says, Jim, let me tell you about the features.
For example, here's what you should
know about the motorcycle.
It has the 1190 RC8 engine, and it's highlighting
the engine in the details.
But let me switch to our end user view.
So now I'm the owner of the motorcycle.
And I might say, for example, tell me
the status of this motorcycle.
And it's using IoT or smart, connected product data
now to map a dashboard onto the motorcycle.
Now, if I just use my hand here to move the motorcycle,
you see that the data is literally
attached to the motorcycle.
So it's communicating to me both physically and digitally
at the same time.
Now, a service technician might use this idea
and say, help me assess the condition of the product.
And it uses some data that's coming down from the cloud,
some analytics explaining what the problem is.
And then I might say, well, why don't you
show me how to fix it?
And it gives me a procedure here,
where you see the rear wheel, some bolts are coming out
and, the caliper is being removed,
and then the axle nut is coming out.
The axle itself gets removed.
And then finally, the rear wheel will come off.
Using the camera, the iPad could see the physical motorcycle.
And it said to the cloud, tell me what
you know about that motorcycle.
And the cloud gave me a way to visualize, for example,
how much gas, how much fuel, what's the temperature,
to instruct somebody in the operator sequence or a repair
sequence.
It allowed me, potentially, to interact with the motorcycle.
I could have said start, and maybe the motorcycle
would have actually started.
But anyway, a very powerful way for a person
to interact with the physical and the digital
in the very same integrated, visual experience.
There was no cognitive distance, no cognitive load
in trying to understand what was happening there.
PTC did some studying of our industrial customers.
And we asked them, what are you using augmented reality for?
And the percentages here actually showed
the distribution of use cases across design, manufacturing,
sales and marketing, operations, service, and training.
So that tells me that this technology has the potential
to impact practically everything that a company does.
What we found is that most companies
are reporting 30% to 50% improvements
in human productivity for operations
that can be guided and optimized with augmented reality
technology.
So smart, connected products is really
about digital technology that makes the product better.
And now we're talking about technology
that makes humans better.
And that's a great segue, I think,
to what you want to talk about, Michael.
MICHAEL PORTER: Well, thank you, Jim.
And as all of you have seen, there
is much to talk about here.
But let me step back a little bit from all of this technology
and all of these business applications
to think a little bit more broadly
about what AR might mean, actually,
to how our society evolves.
The capacity and capability and optionality of machines
is dramatically improving.
But as we discussed, it's very hard for humans
as we are to actually access the power
in the data and the capabilities and the analytics
of these supercharged machines.
And that is kind of limiting the access of humans,
particularly those that don't have computer science degrees
and engineering degrees to actually access
this digital transformation.
They're kind of getting left out.
But what we know and from careful study
is that, actually, humans have unique advantages.
Humans can come up with new ideas.
They can change the frame of reference
in thinking about something.
If you're playing checkers and then you turn to chess,
the human can easily switch from checkers to chess.
A human can kind of fix or repair any part in a machine
and not have to be programmed to do that.
We have these enormously powerful capabilities.
But it's been very, very challenging
so far for the humans to take advantage of the increasing
power and productivity advantage and optionality
of these new powerful machines.
Augmented reality is the great equalizer.
It is going to create a balance between what the machines can
do and what the humans can add, by making
the humans able to access the power of the data
and the analytics and the machine advantages.
AR also is transformative of the whole process
of education and training.
We've been sitting in a classroom.
Now, we can actually work with real objects
and participate in this digital transformation that's
well underway.
AR is both a profound next step in transforming competition
in business, but it's also going to be, I think,
a very important force in kind of resetting and reenergizing
the capability of humans to really participate
in the economy, something that we've
been losing over the first decades of the IT
transformation.
And so in that sense, it's very, very encouraging.
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