The Internet of Things (IoT), in Italian Internet of Things, i.e. the convergence of the digital and physical worlds, has emerged in recent years as one of the fundamental trends underlying the digital transformation of businesses and the economy. The definition of “Iot” is vast, but to simplify it, it is a question of computerizing and networking objects, making them “intelligent” and capable of communicating with each other and with human beings in both senses, that is, by monitoring machines or parts of the body. and giving the possibility to intervene on them. The applications are endless, from factories to medicine. In 2015, the McKinsey Global Institute published an analysis of the economic potential of the IoT, in light of hundreds of factors and possible applications. Now that report has been updated, moving the forecast frontier to 2030.
The main results can be summarized as follows:
– By 2030, the IoT could generate a value of 5.500 to 12.6 trillion dollars globally (and it is billions, it is not a typo for millions); the range is large but the lowest value is also enormous.
– Most of the value can be created in B2B (business to business) applications which in 2030 will amount to 65% of the potential of the IoT. But the value of business-to-consumer (B2C) applications is growing rapidly, spurred by the faster-than-expected adoption of IoT solutions within the home.
– McKinsey estimates that factories will generate 25% of the total value produced by the IoT, while the second application in terms of value generation will be the health sector, followed by that of offices.
– With regard to health in particular, IoT applications will mainly concern wearable, implantable or injectable devices, with the aim of remotely monitoring the conditions of the individual and (if necessary) also to intervene.
Not all is plain sailing: While the potential economic value of the IoT is considerable, capturing this value has proved more difficult than expected – many companies have struggled to successfully transition from pilot projects to large-scale value acquisition. McKinsey estimates a global IoT value of $ 1.6 trillion for 2020, which while considerable, is at the bottom of the range of scenarios that was mapped in 2015.
– The technology needed for the IoT is already available, but the context (often) is not. Organizational challenges, technology costs, cybersecurity, interoperability and installation have too often led companies to remain confined to pilot projects: this has happened in 70% of factories.
– Geo-economically, the developed world‘s IoT value potential for 2030 will represent 55% of the global total, down from 61% in 2020. China is becoming a global IoT force, not just as a manufacturing hub and a supplier of technology, but also as an end market for value creation. By 2030, China could generate around 26% of the total global value from the IoT, equal to the potential of all emerging markets combined. On the same date, the share of the emerging world is expected to grow from the current 16% to 19% of the world total.
Looking ahead, McKinsey urges policymakers to consider creating regulatory frameworks that enable the use of the IoT, “also in light of the strong implications for privacy and cybersecurity.”