Insights of The 2023 ARC Forum - AI, Diversity, The Economy & More... A Conversation with Craig Resnick

Craig Resnick  & Jim Frazer Wrap-Up the 2023 ARC Industry Forum

Listeners to this episode will explore:

• Craig's Start in the Industry
• The Market Focus of ARC Advisory Group & The ARC Forums
• The Challenges in the Industry Today
• The Future of AI
• Examining the Diversity of the ARC Forum audience.
• Craig’s Perspective on the Current Economy 

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Transcript

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Jim Frazer  

Welcome again to another episode of the Smart City Podcast. Today, I am thrilled to be joined by my colleague and friend Craig Resnick. Welcome, Craig. 

Craig Resnick  

Thanks Jim, great to be here with you today!

Jim Frazer  

Craig, you have had a long career in the world of industrial automation. Can you tell us a little bit about how you got your start and how you found your way to the ARC Advisory Group?

Craig Resnick  

OK, as you can tell by my graying hair, my career started a while ago, back in the 1980s. I was an Electrical Engineering student at Northeastern University in Boston, which is a co-op school with five-year undergraduate programs. And when getting my co-op placement, they asked me if I have ever heard of process control. And I am like, what does that mean? And they referred me to a company that at the time was known as the Foxboro Company. And I went and started my career with the Foxboro Company as a co-op student. And then I stayed after graduation and my roles there involved working with process control and DCS systems in marketing and project management roles. And then from there, I wanted to try the PLC world. So, I went off to Siemens and was a Product Manager for PLCs in North America, and then while there, I was buying market studies from this company called ARC. Since I had experience in both process control and discrete control, the opportunity came to take that experience from the DCS side of the world and the PLC side of the world and bring that to ARC. So, I started as an analyst at ARC in 1999 and to this day, I still cover the industrial automation space and the major automation suppliers. But what is also interesting is another aspect of what I do at ARC is work with many of the financial companies that cover the major automation suppliers that are publicly held. These companies utilize ARC by buying market studies and getting some help understanding the automation markets. So, ARC not only supports major industrial manufacturers, processors, and suppliers of automation, infrastructure, energy, sustainability, and smart cities, but we also support many of the financial companies that are making those buy, sell, and hold decisions which we do not influence but they certainly look at our research and they make those decisions for themselves.

Jim Frazer  

Great. So, can you describe the breadth of the automation market? You know, what markets really do you cover for those of us who are not so well versed in the industry.

Craig Resnick  

You know, in automation, we kind of look at things in three different buckets. There is what we call the discrete bucket, which include industries such as aerospace, aeronautics and automotive, where things mainly are made with a lot of materials and parts to assemble, putting things together, a lot of on/off type of control, a lot of sensing, a lot of material handling and robotics. So those would be examples of the discrete industries, which ARC certainly has a lot of strength and experience. And then when we move to the second bucket, what are called the hybrid industries, which is really food and beverage, pharmaceutical, life science, and fine chemical, it is really a combination of on/off and process control. When doing process control, you are measuring things like temperatures, pressures, levels, and flows, for example. Then we move to the third bucket, what are called the process industries, which ranges from oil and gas, to chemical and pulp and paper, also where ARC has lots of strength and experience. So, the thing that ARC really has is if you look at the portfolio of analysts we have, all of us come from either the automation side of the business, selling or coming up with control solutions, or we actually come from the industry itself, hiring engineers who actually help their companies to make cars or make airplanes or refine oil or do pharmaceutical manufacturing. So, it kind of brings that whole breadth to the portfolio. So, ARC can collaborate and leverage a lot of that background to help our customers in all those areas.

Jim Frazer  

So, what are the challenges to the industry today?

Craig Resnick  

The challenge is dealing with continuous changes, because, you know, change is something that causes a certain amount of resistance. For people, they are not always comfortable with change, having done things for so long and a certain way, and now we are asking people to make changes to their workflows, work behaviors, the kind of knowledge they have, the kind of expertise they have. So, change really becomes a major challenge. At the same time, another big challenge that industry has is there has been an awful lot of retirements in the workforce. Many experienced people have left the workforce, you have had people with 25 - 30 - 35 years’ experience that are now gone. And they have been replaced by people that have, I would say, great technology backgrounds and they are very comfortable, you know, with using handheld devices, tablets, and iPhones, and even using some of the devices for augmented reality and virtual reality, such as headsets.  Some of these new hires, I kid you not, are experts in gaming. The problem is, they know more about Fortnight than they necessarily do about, for example, refining oil. Now, you have to bring them into the factory or plant and say, how do you take that technology that you're using in their personal life and how can you now use it to apply to your work life, which now makes it more interesting for people to take a career in, for example, manufacturing and processing, and maybe see ways where they can use the tools and technologies they're comfortable with, and now apply it to become very, very productive employees, and have a long and meaningful career. So, what we are kind of going through that transition right now,

Jim Frazer  

that is very insightful. And frankly, you are foreshadowed my next question, which is, what technologies do you see on the horizon - in terms of perhaps IoT, edge computing, AI that may well capture some of that legacy gray hair knowledge, can you touch on some of those?

Craig Resnick  

That is the thing with AI is, companies have been using software for many, many years, they have been capturing, terabytes of data for a long time. The problem is, they have not really leveraged the data, they have not really done a lot with it. What AI does is it is able to tap into that reservoir of data and input it in a form where now you can say, based on all the different history and scenarios, we can now help to make some decisions going forward. Now, what we find is, we do not expect AI to completely take the place of humans and control systems, what we find is it will really provide a lot of advice and guidance. And the way I would probably look at the AI is, for example, you are driving in an area you are familiar with. AI might give you some information, like on a GPS to say where you should drive. Sometimes that information is something you will use based on your judgment and say this is the way I want to go. And other times, you might say, it is not necessary, I appreciate the guidance, but there is an area here where I know better. So, using AI will be a way to help you do your job better. But at the same time, it still requires human interaction to make some different decisions. AI provides advice and guidance for a lot of the users. But at the same, it still requires a certain amount of human intervention that is still going to be required. So, the future for AI is extremely bright. But we do not think it is going to be something where it is going to eliminate the need to have the human intervention.

Jim Frazer  

I agree. In fact, if I could boil it down to one word, I liked the concept of a co-pilot, right, that helps you along the way. It is also something not to be fearful of because it really in all likelihood will come in an incremental manner. It will be a co-pilot on one particular function, then perhaps a group of functions called an application, and then it will grow as you trust it as it gets smarter as it starts documenting your own information. Well, Craig, we are here at the 27th annual ARC annual forum. Are you enjoying yourself today?

Craig Resnick

It is awesome, especially because what I find is we are seeing newer companies with newer technologies. Seeing some of the startups leveraging seed funding and venture capital investment and sprouting out some of the new disruptive technologies that we are now beginning to see in the industrial space. So, what it really does is it shows how high the level of interest in automation is, how essential it is for companies to grow and compete in the future, and how essential these new tools are that it brings to the workers to be there like, you would say, the co-pilot. And it is almost like having your own avatar, for example, to kind of help you do your job. And the ability to say, now one can put on a headset, for example, with augmented reality, and now looking at any asset on the factory floor, it's providing the worker with the step-by-step instructions, as far as, what is this asset, what does it do, and how does the worker do their job as it provides the worker with the right workflow. And guess what, the worker is now being productive on an asset that maybe they have had very little experience or no experience with, but they now feel good about themself, because they have been able to be productive. The company is happy because the worker has been able to be productive based on their role. So, I can tell you, I have been coming to this forum since the year 2000. And I would say that it continues to grow with excitement, attendance continues to grow, with new technologies, new people, and new market entrants, it is a really exciting time. And thankfully, we are back to live events because this forum as a virtual event does not do it full justice.

Jim Frazer  

Agreed! What I am fascinated by is ARC's embrace of those cutting-edge technologies, whether it be edge devices, or IoT, or AI or a host of different things. It is not that I am just impressed, or Craig Resnick is impressed, but I am seeing it in the millennials and young professionals. There is a diverse audience here that is coming that we did not have a few years ago,

Craig Resnick  

Absolutely, it was not too many years ago that I was probably the average age of the attendees of the ARC Forum. And I am glad that I am now getting maybe a little more on the senior side of the age of the people that are coming to the forum.  This infusion of new and younger people attending the Forum is good, and you feel good because these are people you are really enjoying working with. And kind of conveying knowledge of what you know from the past, and then taking that knowledge, applying it with the technologies of today, and it is a win/win situation. That is similar to AI, you can take lots of history, but because of today’s computing tools, which can process info far better and faster than a human can, it is better getting this AI info from a machine rather than a human today. But then this AI info is used by humans for better decision-making thanks to a human’s ability to deploy that information, so now you are just making the human that much smarter. And that is what I find is so great, especially as an analyst, I always want to make the best decisions. Whatever you do in life, you want to always have the ability to make the best decisions based on having the best facts, and having all those great facts really helps us to feel good about our jobs and making our companies more productive, and we are seeing it in the increasing bottom lines. As you know, I spend a lot of time with financial analysts, and they are saying we are going into a recession, and people are getting nervous, but I do not get that sense. You look at this Forum, there is no sense of recession, there is no sense of downturn, the companies here are continuing to add roles and they are continuing to make smart investments. The return on investment on these technologies is extremely proven and short. This is a great time to come to the Forum, you will not feel that there is any gloom and doom in the economy, just endless optimism for the future of industry.

Jim Frazer  

I cannot think of a better way to end our podcast that with those comments from Craig Resnick, Vice President here at ARC Advisory Group. Thank you very much, Craig, for joining us today and we will look looking forward to see you on another episode of the smart city.

Craig Resnick  

Absolutely, cannot wait to see you on another episode as well!

Jim Frazer  

Thanks again to Craig and please tune in next time for another insightful discussion here on ARC’s podcast!