Internet of Things

New research shows that the Internet of Things offers significant economic value potential, particularly in standardized production settings, but companies must achieve scale to capture it.

the convergence of the digital and physical worlds, has emerged as one of the fundamental trends underlying the digital transformation of business and the economy. From the fitness trackers we wear to the smart thermostats we use in our homes to the fleet-management solutions that tell us when our packages will arrive to the sensors that promote increased energy efficiency or monitor natural disasters resulting from climate change, the IoT is now embedded in the lives of consumers and the operations of enterprises and governments.

The latest research found:

• The potential economic value that the IoT could unlock is large and growing. By 2030, we estimate that it could enable $5.5 trillion to $12.6 trillion in value globally, including the value captured by consumers and customers of IoT products and services.
• The IoT’s economic-value potential is concentrated in certain settings (types of physical environments where IoT is deployed). We found that the factory setting (which includes standardized production environments in manufacturing, hospitals, and other areas) will account for the largest amount of potential economic value from the IoT, around 26 percent, in 2030. The human-health setting is second, representing around 10 to 14 percent of estimated IoT economic value in 2030.
• B2B applications are where the majority of IoT value can be created, with around 65 percent of the estimated IoT value potential by 2030. But the value of B2C applications is growing quickly, spurred by faster-than-expected adoption of IoT solutions within the home.
• The 2030 IoT economic-value potential of the developed world will account for 55 percent of the global total, decreasing from 61 percent in 2020. China is becoming a global IoT force as not only a manufacturing hub and technology supplier but also an end market for value creation.
• While the potential economic value of IoT is considerable, capturing it has proved challenging, particularly in B2B settings. Many enterprises have struggled to transition from pilots to capture value at scale successfully. We estimate that the total value captured by 2020 ($1.6 trillion), while considerable, to be in the lower end of the range of the scenarios mapped out in 2015.

Further reading: https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/iot-value-set-to-accelerate-through-2030-where-and-how-to-capture-it?cid=other-eml-alt-mip-mck&hdpid=df712212-c7c8-43a2-bfea-05672a4f9567&hctky=11705927&hlkid=610f96c4e3574926a029060ee1f35282