When McRock Capital hosts its annual Industrial Internet of Things symposium in Montreal in June, three of the presenting startups will be from Atlantic Canada.

As of March, the Toronto-based venture capital group had selected 10 startups to appear at its event – one of the world’s leading conferences for this new technological sector. And they included Eigen Innovations of Fredericton, RtTech Software of Moncton, and Streamlyne Technologies of Dartmouth.

The fact that 30 percent of the companies (as of press time) presenting at the event hail from this region demonstrates quite clearly that something is happening in Eastern Canada in this explosive economic sector.  It’s a fact that’s not lost on the McRock founders.

“We are seeing a number of innovative Industrial Internet companies based in New Brunswick,” said Co-Founder Scott MacDonald. “They all have slightly different markets so I’m cautious to declare the region as developing a particular focus. The reality is that these companies are building off local expertise in areas like advanced manufacturing.”

He said, for example, that RtTech is leveraging local manufacturing businesses into paying customers. “As a venture capitalist, that is the only validation a business has a desirable product or service offered at the right price,” said MacDonald.

In the broadest sense of the term, the Industrial Internet allows machines to communicate with one another and receive readings from sensors so that they can detect, analyze and respond to data. By receiving more data from more points than humans can process and reacting to it instantly, Industrial Internet applications can improve industrial efficiencies to an unimaginable degree.  What’s also beyond comprehension is just how big this segment will grow in the next few years.

"It took the internet 8,000 days to connect 2.5 billion people,” said Cisco in a December 2012 report cited on the McRock website. “In the next 2,900 days, 37 billion things will join the internet."

Atlantic Canada -- and New Brunswick in particular – is already active in this space, and several startups have launched in the past few years that are pioneers in this field. What they have in common is that they have done an excellent job early in their development of securing major corporate partners, which is helping them to develop quickly.

“We are just starting at the whole industrial internet of things,” said Scott Everett, CTO and Co-Founder at Eigen Innovations, which is developing industrial internet applications for food and other industries. “There is a tremendous amount of work in this space and in Atlantic Canada there is a lot of good research being done.  And in the next few years, we will see more in this field.”

The Eigen team has developed software and algorithms that take machine data and readings from sensors in real-time and automatically ensures that all the machines are continuously adjusted to a setting that optimizes the overall manufacturing process.  The company last year began to work with Portland, Ore.-based Flir Systems, the largest global provider of thermal cameras, on a system that will use thermal images as a smart sensor to detect quality defects and take action in real-time to adjust the production process. Since then, Eigen has linked up with two other industrial partners in other sectors. Down the road in Moncton, RtTech teamed up in early 2012 with Emerson Process Management, whose St. Louis-based parent has annual sales of $25 billion.  They have developed an information system to monitor and manage plants’ energy consumption in real time. Whereas many energy management systems allocate energy costs monthly, this system instantly compares usage against a theoretical benchmark, and analyzes system performance by unit, area, and across an entire plant. What’s more, the product is sold through the massive Emerson salesforce

“We’ve gone from having three sales people in the company to having hundreds of sales people all over the world,” said CEO Pablo Asiron. “It increases our reach by 100-fold and hopefully in a few months we’ll start seeing the revenue that they [Emerson] are expecting.”

Two other Fredericton companies, Smart Skin Technologies and Xiplinx, are developing processes to help beverage producers improve the efficiency of their plants. Both are now working with leading international customers.

The sector in Nova Scotia is not as advanced as in New Brunswick but a few companies are moving into the space. Streamlyne is developing a “dashboard for real-time business insights and analytics of your manufacturing operations.” And Stromline of Halifax, which has developed a tool to remotely monitor fuel levels in oil tanks, plans to work on Internet of Things applications.

The companies involved in the space all agree that there are advantages to having neighbours working on complementary technologies as this allows them to share experiences and networks.

 This article first appeared in the spring 2014 edition of Entrevestor Intelligence. You can find the full report here.