Shownotes
Industry 4.0 is moving beyond factory walls and into farms, forests, and fields.
David Potere, a senior tech leader in BCG’s Industrial Goods and Climate Change and Sustainability practices, explores AI’s move into the outdoor world. Robotics and connected systems are changing how farming and other outdoor activities get done.
You’ll Learn:
Outdoor automation requires AI systems that can operate with constant uncertainty.
Leaders should rethink long-held operating models as AI and robotics reshape how physical work gets done.
The most valuable AI systems may be the ones that simplify complexity rather than add more dashboards.
Learn More:
David Potere: https://www.linkedin.com/in/davidpotere/
What 1,000 Farmers Told Us About Tech Adoption: https://on.bcg.com/4euA76V
Climate-Smart Agriculture Needs a Better Yardstick: https://on.bcg.com/4ejIfH6
David on the Climate Rising Podcast: https://podcasts.apple.com/us/podcast/david-potere-at-bcg-x-using-ai-satellites-in-climate/id1482781075?i=1000767537614
AI Foundation Model for Extreme Weather: https://on.bcg.com/4vKiwyz
Chapters
00:00 – How Will AI Impact Outdoor Industries?
04:26 –The Challenges of Taking Tech Outside
06:11– What Would a Farm That Thinks for Itself Look Like?
08:27 – Is AI Rescuing Agriculture?
10:55– Will AI Only Help Big Farms?
14:39 – Who Owns the Data?
16:16 – What Can Leaders Learn from the AI Outdoors?
18:51 – Next Steps to Truly Benefit from AI
This podcast uses the following third-party services for analysis:
Podtrac - https://analytics.podtrac.com/privacy-policy-gdrp
Transcripts
- For the first time,
Speaker:the kinds of automation technologies
Speaker:that we're used to thinking about
Speaker:in really controlled
industrial environments
Speaker:or maybe the kind of offices
Speaker:that we're in and office work,
Speaker:those things are coming outdoors
Speaker:into the farms and forests and fields
Speaker:that matter so much for the food and fiber
Speaker:that kind of power our society.
Speaker:And for me, from what I'm seeing,
Speaker:it's happening just in time.
Speaker:- Welcome to "The So What
from BCG," the podcast
Speaker:that explores the big
ideas shaping business,
Speaker:the economy, and society.
Speaker:I'm Georgie Frost.
Speaker:First came steam, then electricity,
Speaker:followed by computers
and automation.
Speaker:Industry 4.0 is what comes next--
Speaker:the digital connection of everything.
Speaker:And now that's coming for the outdoors
Speaker:and outdoor industries.
Speaker:So what does Industry 4.0
actually look like
Speaker:when it leaves the controlled
environment at the factory
Speaker:and heads out into the field?
Speaker:And what can leaders in
other industries learn
Speaker:from agriculture's experience?
Speaker:Well, joining me today is David Potere,
Speaker:senior tech leader in industrials
Speaker:and climate at BCG.
Speaker:Industry 4.0, from your standpoint,
Speaker:with outdoor industries such as forestry,
Speaker:agribusiness, oil, mining,
Speaker:just explain to us what it is.
Speaker:- Well, I think you
did a great job on sort
Speaker:of reminding folks about
what the 4.0 is, right,
Speaker:you know, essentially steam, electricity,
Speaker:and then the IT revolution.
Speaker:And then some Germans about
15 years ago decided we needed
Speaker:a new word for what was
going on in factories.
Speaker:Something emergent was happening.
Speaker:We would've said machine
learning around the time
Speaker:that this concept came out.
Speaker:And now we probably would say
frontier models and GenAI
Speaker:and then robotics, like being
able to do something about it.
Speaker:It's not a dashboard.
Speaker:It's not an insight
for someone to look at.
Speaker:It's taking action in
the moment in the work.
Speaker:So we're starting to get digital twins
Speaker:of the outdoor environment
Speaker:of farms and forests and mines ...
Speaker:- Mmm.
- ... and so on.
Speaker:What happens, in an emergent kind of way,
Speaker:when those systems
start to get wired
Speaker:like the factories that we think of?
Speaker:- Well, let's use one of those
Speaker:as actually a really illustrative example,
Speaker:and that is, of course, farming.
Speaker:- I think what I've noticed,
Speaker:in particularly the last five years or so,
Speaker:is we're starting to really
see concrete examples
Speaker:of these 4.0 systems in action.
Speaker:I'll give you just one example.
Speaker:It made a big splash at
Speaker:the big consumer electronics
show a few years ago.
Speaker:The show invited John Deere, which is
Speaker:not sort of the company
you would imagine to come
Speaker:to the biggest consumer
electronics show in the world.
Speaker:And I think the system
See & Spray ends up
Speaker:being a bit of a poster child
for what this looks like.
Speaker:This is a spraying machine
Speaker:that's putting herbicide
crop protection down.
Speaker:It has cameras adjacent
to every spray nozzle.
Speaker:- Mmm.
Speaker:- It has vision, so it's not
a blind piece of equipment.
Speaker:It has cognition.
Speaker:It has some of those
same GPUs that we expect
Speaker:to make AI models work onboard,
Speaker:hardened and cooled on the machine.
Speaker:And then it's got robotic actuation.
Speaker:It's got nozzles that can
adjust their spray volume
Speaker:and height very precisely in the moment.
Speaker:And, and that whole system
is talking like crazy
Speaker:back to home base, to the
machine, and to the operator.
Speaker:And the result is,
there's a recent study
Speaker:from the University of Arkansas
Speaker:that those machines can
put down 50% less herbicide
Speaker:and have the same amount of
weed-free impact in the field.
Speaker:Georgie, you know, like we talked about,
Speaker:this isn't only about farming.
Speaker:Let's take for example forestry.
Speaker:It is remarkable what's happening
Speaker:around instrumenting our forests.
Speaker:There's a startup here in Boston
Speaker:called Chloris Geospatial
Speaker:that's working with a whole
constellation of satellites
Speaker:and spaceborne lasers to
essentially build a map
Speaker:of all the carbon that's locked up
Speaker:in all the forests in the world.
Speaker:And the accuracy of
these systems, these new,
Speaker:and it's sort of like factory
earth is manufacturing wood,
Speaker:and now we've got cameras
overhead like we were inside
Speaker:of a factory building.
Speaker:And just by having those
cameras overhead, we're able
Speaker:to get a much better sense
of the carbon footprint
Speaker:of forestry activities
Speaker:and start to create incentives
that are more aligned
Speaker:with what's needed around
changing our carbon footprint.
Speaker:- A factory is a controlled environment.
Speaker:The field is anything but.
Speaker:Just what are the biggest challenges
Speaker:of taking this sort of
technology outdoors?
Speaker:- We've got a smart doorbell system.
Speaker:We've got some DIY security
cameras in the house.
Speaker:And you think, well, how
hard could it be, right?
Speaker:And there's some good
reasons why it's taking
Speaker:until 2025, 2023 to see these
kind of systems come online.
Speaker:It's hard. And you mentioned the big one:
Speaker:the factory with no roof.
Speaker:The challenge with that factory:
Speaker:Imagine we're in some
manufacturing environment,
Speaker:and at random intervals,
Speaker:the utility turns the lights on and off.
Speaker:That's weather.
Speaker:They turn off water and
turn on too much water.
Speaker:You're flooded or you're drought.
Speaker:And, and the temperature
is all over the place.
Speaker:And so that's one of the big challenges is
Speaker:the unpredictability
of the supply chain
Speaker:in the factory environment.
Speaker:The other big one you
mentioned is, you know,
Speaker:these sensors and systems,
Speaker:they don't like to work in
these tough environments.
Speaker:It's dusty. It's hot.
Speaker:- I can remember ...
- Mm-hmm.
Speaker:- ... spending time at a startup
Speaker:that I sold my startup to, Indigo Ag.
Speaker:And one of the first pilots in the field,
Speaker:we thought it would be cool
Speaker:to have iPads out there in the Midwest.
Speaker:And you know what, Georgie?
Speaker:At 118 degrees, iPads stop working.
Speaker:- Yeah.
Speaker:- And you know, farmers will chuckle.
Speaker:And there's a lot of stories
Speaker:about Silicon Valley, you
know, tech folks coming,
Speaker:getting their boots
dirty for the first time,
Speaker:and having these aha moments
Speaker:about I don't have internet connectivity,
Speaker:my equipment doesn't work.
Speaker:And so that hardening is part
Speaker:of the reason why this sector
is one of the, the last ones
Speaker:to really feel this wave
of Industry 4.0 happen.
Speaker:- What would a, a farm
that can actually sense
Speaker:and respond to its environment
look like in practice,
Speaker:and how close are we to the
sort of ideal, I suppose?
Speaker:- A great farmer needs
to run a machine shop,
Speaker:trade commodities on a future
market, understand genetics
Speaker:and biology and chemistry at
a really deep level, agronomy,
Speaker:and then, you know, they
need to run a business and,
Speaker:and typically with a
decent amount of labor.
Speaker:- Mm-hmm.
Speaker:- And they will have systems
Speaker:for all those things like
we might in our house.
Speaker:I mean, one of the expressions
in the industry is
Speaker:every plant is a sensor.
Speaker:And if you just think
about that for a minute,
Speaker:that leaf canopy is telling me a lot
Speaker:in a corn plant early stage.
Speaker:Or that apple orchard,
Speaker:that apple tree is telling me a lot
Speaker:about what my yield is going
to be like this season
Speaker:in the blossom of the flower.
Speaker:So being able to read those sensors,
Speaker:and there's literally
startups today, Georgie,
Speaker:that are bioengineering
plants to communicate messages
Speaker:with us in the colors of their flowers
Speaker:and leaves, which is wild to me.
Speaker:But even if you don't do that,
Speaker:you know, a leaf has something to say.
Speaker:Every gardener knows that.
Speaker:And so watching the plants
Speaker:and having eyes on the canopy,
not only from the machines
Speaker:that are working the fields,
Speaker:but from space overhead,
Speaker:so using our public space assets--
Speaker:Landsat, the European
Space Agency, Sentinel--
Speaker:to watch these fields every day
Speaker:and compare these fields
to all the other fields,
Speaker:that benchmarking potential to understand
Speaker:where do I stand right
now in the season compared
Speaker:to the last season
compared to my neighbors
Speaker:and make smarter decisions.
Speaker:And then the second big piece
is that robotic revolution,
Speaker:that farm implement.
Speaker:We think about a tractor.
Speaker:By the way, all kinds of
crazy new forms coming.
Speaker:John Deere just acquired a
company called GUSS, G-U-S-S.
Speaker:And if you saw one of
those tractors, Georgie,
Speaker:they don't look like a tractor.
Speaker:First of all, there's no
cab. It's all electric.
Speaker:And it's essentially a roving
tank for delivering the kinds
Speaker:of crop protection systems and chemicals
Speaker:that an orchard needs.
Speaker:And instead of being super gigantic,
Speaker:it's actually fairly reasonably sized,
Speaker:and you just have a lot of them.
Speaker:- I just want to return back to something
Speaker:that you spoke about at the
start of your answer--
Speaker:very, very human aspect
of this conversation--
Speaker:and that is that farmers
are under enormous pressure.
Speaker:We know that. Unpredictable
weather, volatile markets,
Speaker:and emissions mandate,
Speaker:then you throw in the fact
Speaker:that there is a very real
skills gap, you know,
Speaker:a farmer that's worked
the same land for 30 years,
Speaker:how do you actually get
them to know and understand
Speaker:and use this sort of
technology and equipment?
Speaker:Is Industry 4.0 the
answer to those pressures
Speaker:or just another thing for them
Speaker:to have to manage and worry about?
Speaker:- Yeah, I think it's definitely some
Speaker:of the big forces, right?
Speaker:If you think about climate
change, so remember
Speaker:that factory has no roof
Speaker:and those input streams
are doing things today.
Speaker:The number of farmers you meet who say,
Speaker:this is a season like
I've never seen before,
Speaker:it's just remarkable
Speaker:how many folks are
having those seasons.
Speaker:And these are folks that have had
Speaker:20 and 30 seasons of experience, Georgie.
Speaker:That's a major force to deal with
Speaker:and the change in those inputs.
Speaker:The second big one is big changes around
Speaker:what it is to farm in relation
to the climate system.
Speaker:So you know, agriculture
is 25% of global emissions,
Speaker:so any scenario where we
get to a better place,
Speaker:farming will change.
Speaker:Farmers care about stewarding the land.
Speaker:They want to do right by the land,
Speaker:but the recipe is changing probably faster
Speaker:than in a lot of farmers' lifetimes.
Speaker:And then the third big one
Speaker:that we're all living through is
Speaker:just global geopolitical uncertainty.
Speaker:So farmers these days in the
United States, for example,
Speaker:are having a hard time marketing the grain
Speaker:on global markets--
Speaker:relationships that took
30 years to build--
Speaker:and then having a hard
time buying the inputs.
Speaker:Just at the moment in the US
Speaker:where farmers need
nitrogen to make corn do
Speaker:what it's supposed to do,
we have the war go down.
Speaker:And so I think for sure it's
a tough time to be farming.
Speaker:And you know, I'm an AI optimist, Georgie,
Speaker:and I think that this
isn't a fourth thing
Speaker:that's something to worry.
Speaker:It certainly is something to worry about,
Speaker:and farmers are thinking
a lot about it.
Speaker:But I would like to make the
case with you on our so what
Speaker:that it's AI to the rescue.
Speaker:And we could talk maybe a
little bit more about that.
Speaker:I don't mean that in a naive
way to say that it's going
Speaker:to be smooth or easy,
Speaker:but it does feel a little bit
Speaker:like a just-in-time moment to me.
Speaker:- Is there a concern, and I think this is
Speaker:a cross-industry issue
of the adoption gap.
Speaker:Now, I was quite surprised.
Speaker:15% of farmers already strong AI users,
Speaker:but that rate doubles for large farms.
Speaker:So does this technology help everyone
Speaker:or just make the big players even bigger?
Speaker:- Yeah, that statistic you
mentioned came from Bushel,
Speaker:one of the startups in the space.
Speaker:They've been doing a survey
Speaker:for several years now on tech adoption.
Speaker:And for the first time,
Speaker:they put GenAI tools on the list, Georgie,
Speaker:and right off the bat, 14%, 15%,
Speaker:which could sound small or large to you.
Speaker:I, to me, it sounds
large and encouraging,
Speaker:and it's actually larger than the average
Speaker:when you talk about average
industry penetration
Speaker:in the United States.
Speaker:What I can tell anecdotally
Speaker:from things like that survey is
Speaker:that, you know, even with the
stereotypes of, for example,
Speaker:US farmers aging as a demographic,
Speaker:those are true statements.
Speaker:You know that the age
Speaker:of the American farmer is older than ever.
Speaker:These are practical businesspeople.
Speaker:And when there's a technology
that can make a difference
Speaker:for the bottom line, they're all over it.
Speaker:And you know, one story I heard, Georgie,
Speaker:that I think has really stuck
with me is there's a sense
Speaker:and this is--
I'm crediting Nick Horob,
Speaker:who was the founder of Harvest Profit
Speaker:and a tech entrepreneur--
Speaker:his perspective is, you know,
there was a period of time
Speaker:where farmers didn't weld.
Speaker:And it's actually not
that long ago, Georgie,
Speaker:that we had horses doing most of the work.
Speaker:You know, only a little
over a hundred years ago
Speaker:that was happening.
Speaker:And the transition to tractor,
Speaker:which people were pretty
skeptical around.
Speaker:You know, the horse is pretty convenient.
Speaker:It also fertilizes the field.
Speaker:It's, and at some point
Speaker:when that transition was well underway,
Speaker:farmers realized you can't
bring a giant piece
Speaker:of industrial machinery
into town for a repair.
Speaker:I'm going to have to
learn how to weld.
Speaker:Nick's perspective is
that's probably what AI is.
Speaker:I can't tell you how
many farmers that we go
Speaker:and have an interview to talk
with them about AI and tools
Speaker:and they're cutting us
off and saying, yeah,
Speaker:but have you tried this,
and have you seen that?
Speaker:And we're learning things from the growers
Speaker:that we're meeting.
Speaker:And what I think is so
encouraging about that is,
Speaker:when we talk about that future farm
Speaker:with satellites in the sky
Speaker:and tractors that are
automated on the ground,
Speaker:there's still very much an
important human element there.
Speaker:And there's so much volatility and change.
Speaker:These human orchestrators
are more important than ever.
Speaker:And I think these GenAI
tools, this new welding skill
Speaker:is just going to be so important.
Speaker:And it's scratching an itch
Speaker:that we've seen for a long
time that each one of us--
Speaker:I'm guilty as a tech
entrepreneur, too, Georgie--
Speaker:we invent a new system, a new tool.
Speaker:We're so excited to get
Speaker:that new iPad dashboard
system forecast
Speaker:into the hand of the farmer.
Speaker:And you go and sit down at the
kitchen table with them,
Speaker:and they need two monitors
now, and they have 19 logins,
Speaker:and they're just like,
Speaker:not another software subscription, please.
Speaker:And I think, I think, you
know, for those of us that--
Speaker:I'm sure you're playing with them, too--
Speaker:like these tools do
just such a good job
Speaker:of taking in all that context
for us, making connections.
Speaker:And most of the important
problems on the farm are
Speaker:multidisciplinary problems
that involve the weather
Speaker:and the futures market
and machines, you know,
Speaker:and so I see farmers
starting to realize, ah,
Speaker:I might have a real coach here
that can help me get my hand
Speaker:around this, almost like a
new member of the staff.
Speaker:- I'm curious though,
Speaker:not to burst your bubble
on the excitement here,
Speaker:but regulation and data,
Speaker:there is, of course, going to be
Speaker:a lot of data sensors, machines, platforms
Speaker:all collecting this really useful data.
Speaker:Who owns it? Who controls it?
Speaker:Does the farmer always
know what's being taken?
Speaker:- It's certainly the right question.
Speaker:And look, it's not
unique to farming, right?
Speaker:I mean, if we're, if
we're driving, you know,
Speaker:a really modern car that
has extensive driver assist,
Speaker:I don't know about you, but I
haven't looked too closely
Speaker:at my user agreement in terms
of what Toyota or Tesla
Speaker:or any of those companies
know about me.
Speaker:But what we know is that
in the automotive space,
Speaker:our driver behavioral data
Speaker:and the imagery from
our camera systems,
Speaker:those are the things that are making
Speaker:self-driving car a reality.
Speaker:I think you're right.
Speaker:It's trickier from a
small business perspective
Speaker:for a farmer operator.
Speaker:And a principle that I've
seen applied a lot here is
Speaker:that, you know, the farmer
and the farmer's data
Speaker:should be used first to make sure
Speaker:that the farmer benefits directly
Speaker:from their own data and systems.
Speaker:And in a lot of cases, what
you're starting to see is
Speaker:farmers able to opt into sharing
Speaker:and benchmarking-type systems
Speaker:and a give-to-get
kind of model,
Speaker:which I think feels fair
to a lot of growers.
Speaker:But that's not to say--
you're right;
Speaker:it is a thorny challenge.
Speaker:And it's one of these things that has
Speaker:to get overcome to kind of imagine
Speaker:that future farm that we're talking about.
Speaker:- So beyond farming,
what's the lesson then
Speaker:for a leader in any
outdoor industry
Speaker:and for all industries?
Speaker:- Maybe we'll start with
the outdoor industries.
Speaker:I hope that's a little more obvious
Speaker:from the conversation today.
Speaker:I mean, I think I am just
continually surprised
Speaker:at my colleagues in the
industrials practices
Speaker:here at BCG at how
fast the, you know,
Speaker:pick your most cutting-edge technology
Speaker:from inside a factory, how
fast that's moving outdoors.
Speaker:And so for those leaders, you
know, working with your teams
Speaker:to stretch the imagination
around what's possible,
Speaker:doing experiments and tests,
Speaker:and doing more of this
grafting of what's working
Speaker:in traditional industrial environments
Speaker:into the outdoors.
Speaker:But maybe I'll take
a swing at something
Speaker:that I hope people
take away regardless.
Speaker:And you know, here I'm going to crib
Speaker:from an Industry 2.0 story,
Speaker:and maybe you've heard this one.
Speaker:It definitely bears telling
from what I've seen on farms.
Speaker:And it's this idea that
when electrification was
Speaker:first starting here in the northeast
Speaker:and manufacturing facilities
Speaker:that were designed around
a giant prime mover
Speaker:that was powered by steam
and then belts, right,
Speaker:belts that would move drivetrains
all through the factory
Speaker:to power a sewing machine
Speaker:for a factory that's doing fabric,
Speaker:what was the first move
in electrification?
Speaker:People just put in the biggest
electric motor they could
Speaker:in place of that steam motor
Speaker:and left everything else in place, right?
Speaker:And then what happened over
a period of 10 to 20 years is
Speaker:the kind of people that designed
Speaker:and operated those
factories started to realize
Speaker:that if they broke the pattern entirely,
Speaker:there's no reason to have
a gigantic electric motor.
Speaker:I can have a little motor
with every sewing machine
Speaker:and then run power to the machines.
Speaker:And you can imagine how
that changed the layout
Speaker:and the productivity of that place.
Speaker:And I think we are,
Speaker:I don't know if we need
to say 5.0 now, Georgie.
Speaker:I worry if we say 5.0,
Speaker:we're going to run out
of numbers at some point.
Speaker:So whatever you want to call this,
Speaker:4.0 outdoors is at that
same kind of moment.
Speaker:It probably is that fundamental.
Speaker:And so I think the,
the thing I'd like
Speaker:to leave folks with is we
will probably be surprised.
Speaker:And I would be surprised
Speaker:if we're not a little bit
embarrassed by, you know,
Speaker:answers that people like
me give when you ask,
Speaker:imagine what a fully
digital future looks like.
Speaker:I'm probably more in the camp
Speaker:of the guy who's putting
the giant electric motor
Speaker:in place of the steam machine.
Speaker:- Well, we've covered the so what.
Speaker:Finally, it's the now what.
Speaker:What are the next steps to take
Speaker:to truly benefit from Industry 4.0?
Speaker:- Yeah, well, I mentioned a couple things.
Speaker:You know, one is I can't
resist jumping on a soapbox,
Speaker:Georgie, around how easy
it is to build software.
Speaker:I'm not saying it's that easy
Speaker:to build great, important
software of record,
Speaker:but to build functional
prototypes right now,
Speaker:it's never been easier.
Speaker:And so I hope one thing folks
will think about from a so,
Speaker:from a what's next is
pushing your product teams
Speaker:to accelerate testing and learning
Speaker:out in the real world with your customers.
Speaker:And I'd say that's the second
thing on a what's next is
Speaker:have a review, have a think
about your business,
Speaker:sit down with your leadership
team and ask yourself,
Speaker:what about our business
depends on strategic advantage
Speaker:that we have that comes
from knowledge and data
Speaker:and insights that only we have?
Speaker:And then just imagine
that that's going to go away.
Speaker:The way the food system works
is going to get rewired,
Speaker:and the way that these industrial systems,
Speaker:outdoor industrial systems
work is going to get rewired.
Speaker:And so being able to
look around the corner
Speaker:with your teams by pushing on some
Speaker:of these bedrock assumptions
Speaker:I think is a really valuable exercise.
Speaker:- David, thank you so much,
and thank you for joining us.
Speaker:You can find links to more
Speaker:of David's research
in the show notes.
Speaker:- Georgie, thanks a lot for that.
Speaker:That was a lot of fun.
