Navigating 2025 with Industrial Intelligence

Posted: January 13, 2025

Looking back on this past year, three global megatrends stand out for me, and capture the key opportunities facing industry at this moment. These megatrends will shape management agendas in 2025 under the umbrella of what I call #industrialintelligence.   

Megatrend #1: The urgent case for decarbonization

Industry came face to face with the growing multi-polarity of the international system in 2024. The economic, military and demographic clout of the countries known as BRICS+ is creating a new source of geopolitical gravity challenging US and G7 interests, often with contesting positions on issues like reserve currencies, security and global governance – and fossil fuels. While representing more than 40% of crude oil production and exports, members of the bloc also control much of the mineral resources required for renewable energy infrastructure, including solar panels and electric vehicles.  

At the same time, extreme weather events around the globe also brought the effects of climate change into sharp relief. The toll on communities and ecosystems was often severe, not to speak of the economic costs of climate impacts, which are now giving rise to so-called “insurance deserts.” Whether it was floods in Valencia or fires in Valparaiso, these calamities further underscored the urgency of meaningful climate action. Continuing to make the case – qualitatively and quantitatively – for decarbonization has never been more vital.

There is a growing imperative in much of the world for more sophisticated analytical, management and reporting capabilities to monitor and mitigate carbon dioxide, methane and other heat-trapping gases. Technology is instrumental in this regard, with data-driven optimization, digital twins, energy management solutions and carbon accounting all emerging as pillars of the energy transition. For example, in 2025, companies exporting goods to the European Union will prepare for the wider implementation of the EU Carbon Border Adjustment Mechanism (CBAM), which requires emissions tracking and tracing, including data collection, record-keeping, compliance, reporting and more.

Megatrend #2: The impact of AI 

Industry is still laying the groundwork for AI adoption. If 2023 was the year many managers first prompted a chatbot, 2024 saw companies identifying initial use cases for generative AI in the organization, and more systematically investigating the productivity potential of AI.  

That potential is substantial: McKinsey has calculated incremental economic gains of $2.6 trillion to $4.4 trillion annually as a result of generative AI alone. Generative AI with large language models is lowering the barrier of entry for everyone using AI, with easy-to-use natural language interfaces. In the next year, we will see these continue to progress, resulting in improved user experiences (UX) for software.

For industries facing a deepening skills crisis in their workforces, AI tools can help gather and codify the collective wisdom of the organization, providing a means to safeguard and scale institutional knowledge. In parallel, however, AI is sparking legitimate concerns about job losses and economic dislocations. In the coming year, hybrid architectures for AI, which blend the best of on-premise and cloud-based capabilities, will predominate as companies seek flexibility and scale while preserving the essential context of their data.

The next s-curve in AI’s evolution is arriving in the form of intelligent agents. So-called “agentic AI” heralds a new frontier of automation where autonomous systems independently take actions to achieve specific goals, adapting based on changing contexts. Gartner projects that at least 15% of all work-related decisions will be made by such agents in just three years’ time.

In 2025, we will see AI increasingly intersect with hardware technologies to disruptive effect, as with AI-powered polyfunctional and humanoid robots in manufacturing, logistics and healthcare contexts. As evidenced by the conflict in Ukraine, drones are decisively remaking how wars are fought. With the addition of AI capabilities, these drones – including so-called “drone swarms” – will intelligently detect the movement of combatants, armor and matériel, making the defense against low-cost, AI-enabled drones a major factor in military planning.  

Data centers’ carbon emissions represent around one percent of total global greenhouse gases, according to estimates from the International Energy Agency (for context, the aviation sector accounts for roughly two percent). Accordingly, stakeholder scrutiny of AI’s voracious appetite for electricity is increasing amid growing awareness of the climate impacts of AI, especially the compute-intensive systems powering generative AI with large language models. (I think it bears mentioning too that not all AI systems are created equal when it comes to energy intensity; many machine learning applications have roughly the energy footprint of a spreadsheet.)

With AI-driven data center electricity consumption expected to soar by some 160% by 2030, according to recent research from Goldman Sachs, the need for responsible AI that contemplates ethical use, cybersecurity, governance and strong energy management becomes clear. On the 2025 industrial to-do list: Quantifying the energy going into AI systems, as well as the sustainability benefits that flow from them.  

Megatrend #3: Ecosystem-level change

A hallmark of industry in 2024 was increasing complexity – on many different fronts. New trade tensions, especially between the US and China, upended global supply chains in areas like semiconductors and critical minerals. More than 70 nations, representing over half the world’s population, held national elections, spurring a wave of anti-incumbency and political fragmentation. And it perhaps comes as no surprise that the world created more information in 2024 than in any prior year, up 263% versus 2019 levels.  

In confronting this complexity, industry cannot rely on conventional linear operating models that are no longer fit for purpose. We need to match rising complexity with a corresponding increase in organizational capacity. When certainty is scarce, agility and resilience take center stage.  

Multi-stakeholder collaboration that transcends competitive and organizational silos to drive higher productivity is increasingly mainstream, whether that is bringing together diverse perspectives to improve innovation outcomes, or enabling cross-boundary teaming with secure, interoperable sources of data. Sharing information across organizations and disciplines means we can ask new questions – and generate new insights – that allow us to take on the really big challenges and opportunities facing industry.   

As I consider the year that was and the year to come, I am struck by a recognition that the future of industry is not being written in isolation. Rather, it is emerging through an ecosystem of digital and real-world connections – between networks, between operations, between partners who share a commitment to transformation at scale.  

Industrial Intelligence

In virtually all the customer meetings I had in 2024, I found a commitment to accelerate industrial decarbonization. In my conversations with engineers, I heard how companies, while universally intrigued by the promise of AI, are balancing its inherent risks. When I toured facilities, I saw how bridging data and organizational silos can serve as an antidote for complexity, converting information into insights that cut across the value chain for greater operating agility. 

Connecting, securing, and contextualizing disparate data sources to empower new insights is what I refer to as #industrialintelligence. This construct goes beyond merely connecting data – it is about combining technology with domain expertise to act as a force multiplier. Our role as leaders, I believe, is to encourage and facilitate our customers’ industrial intelligence, forging connections, inspiring trust, and opening pathways for dynamic new ways of working. 

The industrial transformation we saw in 2024 is just the beginning of what is possible.