Session 1: October 18, 4:00-5:30 | "Potential Opportunities, Risks and Challenges" | M-RCBG Conference Room (B-503)

Session 2: November 29, 4:00-5:30 | "Can New Technology Help Mobilize Capital in Emerging Markets?: Case Studies in Financing the Industrial Internet" | M-RCBG Conference Room (B-503)

Financing the Industrial Internet

This Study Group will explore how the data analytics that now drive rapid gains in industrial efficiency can reduce financial risk and help tap new pools of capital.

As the Industrial Internet begins to deliver gains in productivity and savings to the operators of turbines, rigs and pipelines, there remain untapped opportunities in the realm of finance. The networks of sensors and Big Data analytics that help prescribe more efficient maintenance schedules and predict potential system failures can also deliver new levels of transparency to those who provide loans and insurance to these industrial and infrastructure investments.

Especially in developing countries, where operational and political risks are already high, analytics that can monitor operations and productivity gains should help open up new pools of money from otherwise skittish financiers. Initially, fully realizing these benefits will require the design of aggregated data streams that genuinely predict outcomes based on other similar operations and demonstrably reduce risk. The longer-term challenge will be to process that data, while protecting the confidentiality of the operators, satisfying the national security concerns of governments and defending against cyber attacks. It remains to be seen which players in these new commercial configurations will actually capture the financial benefits of the new technology.

Christopher Smart headeshotChristopher Smart, PhD, CFA, has spent the last six years in the Obama Administration as a senior policymaker for international economic affairs.  As Special Assistant to the President at the National Economic Council and the National Security Council, he was principal advisor on trade, investment and a wide range of global economic issues. From 2009-13, he was Deputy Assistant Secretary of Treasury, where he led the response to the European financial crisis and designed U.S. engagement on financial policy across Europe, Russia and Central Asia.  Before entering government, Dr. Smart was Director of International Investments at Pioneer Investments where he managed top-performing Emerging Markets and International portfolios.  Following the collapse of the Soviet Union, he worked in Moscow, advising Russian government agencies on economic policy and financial market reform.  Earlier in his career, he was a journalist in St. Petersburg, Florida and Paris, France.  Dr. Smart is also the author of The Imagery of Soviet Foreign Policy and the Collapse of the Russian Empire (New York: Praeger Publishers, 1995) and numerous analytical and opinion articles.  He earned a B.A. in History from Yale University and a PhD in International Relations from Columbia University.  He is a member of the Council on Foreign Relations, holds the Chartered Financial Analyst designation and speaks French, Russian and some German.  In Spring 2016, he was a Resident Fellow at the Harvard Kennedy School’s Institute of Politics, where he led a study group entitled “Money, Power and the Politics of International Financial Policy.”  At M-RCBG, he will be exploring how the data analytics that now drive rapid gains in industrial efficiency can reduce financial risk and help tap new pools of capital.  His faculty sponsor is Robert Glauber, Adjunct Lecturer on Public Policy. Email: christopher_smart@hks.harvard.edu