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The Digital Transformation Of Physical Industries - What Does It Mean?

May 21, 2019

Ahead of his presentation in the opening session of this year's WEAR Conference in Seattle, we sat down with Jon Melnick, Ph.D., Research Director at Lux Research, to get his take on the  digital transformation of traditionally physical industries, key trends and value drivers behind this shift, and emergent opportunities for wearable technology - in healthcare and beyond.

As a Research Director at Lux Research, Jon leads the Digital Transformation of Physical Industries Research Program - helping clients to make informed decisions on a wide range of emerging technology sectors, including IoT, sensors, autonomous vehicles, communication protocols, smart cities and buildings, artificial intelligence, augmented and virtual reality, and connected devices.

As consumers continually push for smarter and more cost-effective solutions, what do you think is the biggest concern regarding non-digital industries like healthcare, manufacturing and consumer goods?

The concern for traditionally non-digital industries is their core product offerings and processes are inseparably merging with digital technologies. This means that more and more of the cost and value of their products center around digital technologies, which is well outside of the core competencies of these organizations, creating openings for competitors to grab market share by doing digital better, or the threat of losing market share to non-traditional competitors like tech companies. Therefore, the success or failure of these large organizations are beginning to be dictated by how well they can adapt to the digital transformation of their industries.

What industry topics do you see getting the most attention at this time? How are these factors influencing the future of digital transformation of physical industries?

Within B2B organizations, most teams are focused on using wearables to improve operations, so areas like upskilling their workforce or for safety monitoring. B2C companies have been more focused on how to improve their customer engagement and overall product experience, so we see more attention on using wearables in areas like product personalization.

What advice would you give someone that is just breaking into the wearable market?

When people think of wearables, they often think of a Fitbit or Apple Watch, but beyond a few high-profile consumer devices, the wearables market is extremely fragmented; with each fragmented market and application having very different needs and requirements. In addition, the wearable is often not the actual solution, but a part of an overall solution, so aligning to the unique needs of the different applications and related ecosystems make wearables a very challenging market to enter, but there is a lot of growth opportunities for those that figure it out.

Your presentation at this year’s WEAR 2019 will cover the digitalization of healthcare and new business opportunities for wearable electronics that are emerging as a result. Why is it important for others in your industry to hear this message? What are some of the key take-aways?

There are several trends that are in the process of changing healthcare; for example, increasing consumer management of their own health, new policy and regulation putting more outcome and cost pressure on providers, shifting population demographics, and an increasing understanding that the current care models are unsustainable. Wearables are attractive components to address these solutions because their data is becoming high enough quality and the analytics behind them are maturing to the point to be able to deliver meaningful insight to all of the stakeholders within the healthcare landscape.

What session topic are you most looking forward to hearing about at WEAR 2019?

I’m most looking forward to the E-Textile and Wearable Healthcare vs Wellness sessions. E-Textiles are an interesting area because there is a lot of commercial opportunity and need for them, but has really been limited by the state of the technology, so I’m interested to see how the speakers are addressing some the key limitations like washability and power. I’m also looking forward to the Wearable Healthcare vs Wellness session because, as discussed above, there is a lot of potential for wearables to meaningfully impact healthcare, but most of the commercial impact thus far has been on the wellness side with the “Worried Well” driving the market. I’m looking forward to seeing how the speakers approach actually applying wearable’s value into more meaningful healthcare applications.