Industrial convergence is described as “the demand-induced convergence of industries and goods markets from different sectors of the economy that previously had no or only sparse interaction”. Markets which previously had been clearly separated from each other, are now coming together. As a result, previously existing industry boundaries are becoming blurred. In some areas, new market segments are developing as a result of this merging, which means that customers can be offered new, hybrid opportunities. Cross-industry approaches also allow exciting new business models to be established.
When does industrial convergence occur?
Industrial convergence occurs “when innovations emerge at the interface of demarcated markets”, triggering structural changes and increased economic momentum. The logical consequence that arises in this context is the at least partial convergence of previously delimited markets.
MIH EV Platform by Foxconn
The Foxconn MIH EV platform is a suitable example of the convergence of the industry. This is primarily about building an open platform for electric vehicles (EVs). On the platform, companies from a wide range of industries up that have not been in contact with each other until now can liaise. This is intended to accelerate innovation and development in the EV industry. According to the MIH website, 1,718 members are currently working on this common platform for electric vehicles.
4 main features of the MIH platform:
- The structure of the platform is fully modularized, scalable and easily customizable.
- The chassis is made of the latest lightweight materials with a unibody design that optimizes the EV’s performance.
- The platform provides a high-performance electrical structure for all application levels.
- The platform is designed to promote the development of autonomous driving technologies.
Risks of traditional automotive industry enable opportunities of MIH
According to its founders, the MIH platform represents the solution to some key problems of the traditional automotive industry. Three key issues are highlighted as challenges facing the traditional automotive industry:
- High development costs
- Long lead times
- Frequent lack of resources
The Electric Vehicle (EV) Platform is designed to help partners and third-party developers to evolve functional features and systems, which will strengthen the growth of the overall electric vehicle market. This can provide a foundation for developers to be able to create a complete ecosystem for the electric vehicle industry.
- Industrial convergence describes the demand-induced merger of previously separate goods markets from different sectors of the economy.
- Industrial convergence occurs when innovations emerge at the intersection of demarcated markets.
- Foxconn MIH EV platform aims to become an open development platform for electric vehicles
- The platform is expected to strengthen the growth of the overall electric vehicle market.
- Operational technology (OT) describes monitoring, controlling, and managing the processes of physical machines. The convergence of IT and OT paves the way for the further expansion of Industry 4.0.
Industry 4.0 and the industrial convergence of IT and OT
The intelligent networking of products and information technologies represents the technological goal of Industry 4.0. It not only takes on the task of increasing efficiency, but also serves as a transmission channel for cross-technology and cross-industry business models. Briefly, Industry 4.0 takes over the digital networking of the entire economy. This requires the merging of IT and OT. Operational technology (OT) describes the monitoring, controlling and steering of the processes of physical machines. For a long time, these processes were not connected to networks – unlike industrial technology (IT). In order to establish a network between the processes of operational technology and thus to be able to achieve the goals of Industry 4.0, IT and OT convergence is unavoidable. It is necessary to develop a sustainable strategy and to analyze the opportunities and risks for the company and its respective market environment.