The Internet of Things (IoT) is a network of devices with built-in electronics, software and sensors which allow the devices to exchange and analyze real-time data. The IoT has the potential to transform the physical world into an advanced information system.
The future of the IoT in numbers
According to IHS Markit, the number of interconnected devices worldwide will go up by 12% on average per year, reaching 125 billion in 2030. As a result, global data transmissions will increase from 20–25% to 50% per year on average in the next 15 years.
Gartner predicts that the IoT will be integrated into more than half of major new business processes and systems by 2020. Accenture estimates that the industrial IoT could add $14.2 trillion to the global economy by 2030.
Forrester has identified 4 main areas of IoT growth: (1) fleet management in transportation, (2) security and surveillance applications in government, (3) inventory and warehouse management applications in retail and (4) industrial asset management in primary manufacturing.
The impact of the IoT on business
The IoT will have a transformative impact on business. According to McKinsey, data-based business models will shift competitive dynamics within industries. Firms that will be able to extract more business value from real-time analytics will gain a competitive advantage.
Businesses will better utilize real-time analytics if analytics experts and data scientists play a more active role in decision-making. Their expertise will help generate more accurate business forecasts based on IoT data. In some cases, algorithms will make decisions on their own.
IoT adoption will further increase work efficiency and productivity. Sensors embedded in manufacturing equipment will help monitor and control the production process more precisely. Devices will be able to detect defects and take corrective action.
IoT adoption will also help create more personalized marketing campaigns. In-store offers will be better tailored to individual needs. Every customer passing the dashboard screen of a shop will receive a personalized offer based on his/her shopping preferences.
In addition, IoT adoption will boost innovation. Thousands or even millions of new IoT applications will be launched to extract value from available data. Fierce competition will motivate software developers to develop innovative solutions.
Moreover, the IoT will give new business opportunities. Initial work has already started to blend the IoT with augmented reality. That could make IoT devices more interactive and user-friendly, thus increasing one’s competitiveness.
The social impact of the IoT
The IoT will transform not only business but also society. It will drive the smartization of cities and homes. New solutions such as smart parking, connected waste and real-time traffic management will help run cities more cost-effectively and deal with increased traffic and air pollution.
Homes will become even more responsive to individual needs. Voice and gesture controlled IoT devices will maximize comfort. Little effort will be needed to control them. A simple voice command or gesture will trigger the right function.
As more personal data are disclosed and commercialized, concerns about privacy and data security will emerge. The more the IoT is integrated into daily routines, the more personal data will be given away to third parties. Consequently, more attention will be paid to cybersecurity.
There is also a risk of structural unemployment. Futurologist Yuval Noah Harari argues that “most people will no longer be needed for business” as their competences will become outdated. They will need to requalify. However, securing a job will be challenging without having a strong tech background.
IoT growth can also deepen the digital divide. Access to technology and digital literacy are not distributed evenly across regions. Countries with poor IoT infrastructure will fall behind economically, which in turn will cause more social inequality.
IoT growth is likely to increase demand for energy and, consequently, electronic waste. At the same time, it can contribute to more efficient use of resources. For example, it can help track energy usage per household.
Moreover, the IoT will increase safety and comfort. Sensors embedded in cars will spot obstacles and respond automatically. There will be hardly any road accidents and traffic jams. Eventually, predictive maintenance will detect defects and service cars automatically.
To sum up, IoT adoption over the next years will transform business and daily routines into data-intensive activities. Advanced analytics will help make informed decisions and yield better results. However, managing an intense flow of data will pose serious challenges such as cybersecurity.
References: A. Frangoul, CNBC.com | Internet of Things: Converging Technologies for Smart Environments and Integrated Ecosystems | IHS Markit, The Internet of Things: a movement, not a market | Gartner.com | Accenture.com | GENewsroom.com | Ericsson Mobility Report, June 2016 | Forrester.com | J. Bughin, M. Chui and J. Manyika, McKinsey.com | M. Chui, M. Löffler and R. Roberts, McKinsey.com | PRNewswire.com | Futurism.com | Blogs.Cisco.com | Infineon.com