McKinsey & Company’s Global Institute conducted a research with the reason of exploring the “real” IoT value on the global economy.
“THERE HAS BEEN AN AWAKENING”. Just like in the new Star Wars series, the world around us is awakening. Changing.
Your everyday objects, your car, the whole medical system, the fashion industry, and most elements of the world around you are being “digitised.” Right now, as you read this.
It is an early stage but still, the Internet of Things is already having a real impact by changing how goods are made and distributed. By changing how products are created, refined, serviced and even delivered.
By changing how patients and doctors manage health and wellness. However, exploiting the full potential of the IoT will require innovation in technologies and new business models. The real value of the Internet of Things is not hype. Still, how much value is there?
IoT Needs New Policies And Regulations
It will require investment, talent and new capabilities. New policies and regulations that encourage interoperability and ensure security. That protect property rights and user privacy.
This is the only way the Internet of Things can reach its full potential. A potential highlighted by the consulting firm McKinsey and Company in their latest study.
According to the study, the total economic benefit of IoT in the year 2025 could hit anywhere between $3.9 trillion to $11.1 trillion, with the high estimate equivalent of 11 percent of world GDP in 2025.
IoT Value Beyond the Hype
The report, “The Internet of Things – Mapping the Value Beyond the Hype”, talks in detail about the potential surplus value gained by the consumers, as well as the value generated from the business applications in IoT.
Through the prism of an earlier research, related to the IoT, the consultancy firm reviewed nearly three hundred potential applications of the new tech, globally.
In order to estimate the real value of the IoT, key factors were taken in consideration such as time saving, asset utilisation and productivity improvement. It also included an approximate economic value for reduced number of accidents, deaths and diseases.
Is This The Real IoT Value?
The revealed figures are startling.
A potential economic impact of between $3.9 trillion and $11.1 trillion per year in the year 2025 for the IoT alone.
Consumer value is expected to be at $2.6-7.6 trillion by the year 2025.
Consumer surplus is supposed to be between $1.0 and 2.8 trillion.
The report also revealed that different segments of the new IoT market will generate different levels of value. The health and wellness sector could create value anywhere between $170 billion and $1.590 billion.
Retail environments, on the other hand, could reach economic gains between $410 billion and $1.160 billion. However, the highest increase will come from the industrial applications, by the year 2025. The benefits could be worth anywhere between $1,210 billion and $3,700 billion.
Smart cities are also expected to see significant economic gains thanks to the evolution of the IoT. In fact, smart city tech will see the second largest increase, in the range of anywhere between $930 billion and $1,660 billion by the year 2025.
Bold predictions by McKinsy. What is your take on “The real IoT value by 2025?” Let us know in the comments below.