IoT TECHNOLOGIES WILL CREATE AT LEAST $3.9 TRILLION IN ECONOMIC VALUE BY 2025: A new report from research firm McKinsey projects that IoT technologies will have an economic impact between $3.9 trillion and $11.1 trillion by 2025.
That gulf in the potential value that McKinsey forecasted is because of the variety of factors that could play into the IoT’s economic impact. For instance, 40% of the potential economic value of IoT technologies (about $4 trillion) can only be realized if the issue of interoperability – enabling different IoT devices from different providers to communicate and share data – is resolved, McKinsey said. There are several different standards for interoperability being developed by different companies and consortiums, but no universal standard has emerged that would create that value.
Another major issue that will determine how much economic value is realized from the IoT is the ability to collect, aggregate, and analyze data from various IoT devices and systems, according to the report. The vast majority of the data coming from IoT devices and systems is not collected at all today, and the data that is gathered isn’t fully exploited, McKinsey said. For example, McKinsey found that only one percent of the data being generated from the 30,000 sensors on one offshore oilrig was being analyzed for decisions. The more data that is captured and analyzed from IoT technologies, the more economic value will be created.
The areas where the IoT will have the greatest potential economic impact will be in manufacturing, cities, and healthcare, according to the report. Manufacturing accounted for about a quarter of McKinsey’s overall estimates for economic impact, with the sector creating between $1.2 trillion and $3.7 trillion in value from the adoption of IoT. Cities will gain between $900 billion and $1.7 trillion dollars in value, and the healthcare sector will have an impact between $200 billion and $1.6 trillion.
BI Intelligence estimates that the adoption of IoT technologies will have an economic impact of $1.7 trillion by 2019.