So much for just hype! The Internet of Things (IoT) holds enormous potential for the global economy, according to the hot-off-the-press study "The Internet of Things: Mapping the Value beyond the Hype" by the McKinsey Global Institute. The business consultancy analysts are forecasting a yearly added value of between 3.9 and 11.1 trillion US dollars in 2025. The study anticipates huge opportunities and a need for action, particularly for the traditional economy and medium-sized businesses.
Whether it’s the Smart Home, Smart City or Smart Factory, the key to smartness is the Internet of Things. Essentially: Intelligent objects or things that capture and analyze data, and in doing so help with decision making. Some things interact with people. Some things interact with other things (known as interoperability). During the study McKinsey carefully examined 300 such applications and concludes that there is enormous potential for not just companies, but consumers too.
IoT applications currently focus on products and innovations for consumers, says McKinsey. A recent report by Gartner came to a similar conclusion. The key statement of "Predicts 2015: The Internet of Thing" was that by 2020 more than 25 billion networked objects will be in use.
McKinsey claims, however, that the largest potential is in Business-to-Business applications, such as in Industry 4.0 or digitized logistics. Technological development plays a significant role here. In the foreseeable future, smart glasses and similar products will become so affordable that they will be worth being used in factories. This will provide a cost-effective way of training employees or supporting them with the maintenance of complex machines.
The Internet of Things pays off! This aspect in particular is what makes the study so exciting, since despite the impressively high sums that have already been mentioned, it won’t only be large companies that will benefit from the Internet of Things. Even medium-sized companies will be presented with great opportunities to compete thanks to the specific digitization and networking processes along the value-added chain.
That said, in order to make this a reality businesses must make proper use of their data, since digitization and interoperability are closely connected with practical application and additional utilization of big data, the study adds. Experts say that less than one percent of the available data is being utilized. This data is mostly being used for real-time monitoring and fault analysis. However, by optimizing processes and preplanning existing workflows, for example, there is the promise of achieving a significantly greater added value. There is also great potential for saving energy and improving work efficiency and machine maintenance. Even employees will benefit from the by-products of optimizing processes, such as the reduction of health risks and the improvement of safety conditions.
Time to act
The study essentially confirms our view as developers and arrangers of practical digitization: Data is the most important resource for Industry 4.0; it is available in huge quantities and is used by most companies, but mostly to only a very limited extent. Whenever the study talks about potential, we want to follow it up by making it clear: “We’re unlocking your potential! Make the most of it!”
We have the experience and the knowledge, the technologies and the experts. Our data scientists, data engineers and developers help us to realize our own big data projects and also offer cost-efficient support on a temporal or project-by-project basis.