Insights into public and private sector IoT investments.
From Amazon’s Alexa to built-in home security features, and even wide-scale government initiatives, the Internet of Things (IoT) has already proven itself to be an increasingly prevalent and significant part of daily life on Earth. Because of this, it merits to dive deeper into the current status of the industry, and take a peak at what the future of IoT has in store.
According to Fortune Business Insights, the global IoT market was valued at $190 billion in 2018, and is anticipated to climb all the way up to $1,102.6 billion by 2026. This reflects a compound annual growth rate (CAGR) of 24.7% from 2018–2026, and that is no small number.
This large sum accounts for both public and private sector IoT investments. But how are these funds being allocated? Let’s answer this question first by talking about IoT for enterprise.
Household-name companies like Amazon, GrubHub, Alphabet, you name it, are largely focused on a sub-sector of IoT dubbed the “Industrial Internet of Things,” or IIoT. Put simply, IIoT is the marriage of IoT and manufacturing — a powerful tool that can greatly augment enterprise processes. Indeed, a poll conducted by Honeywell of 600 US business professionals found that 70% of them “invested ‘significant’ amounts in IIoT” and “9 in 10 believe IIoT will pay for itself.” Clearly, companies have much to gain from IoT implementations. How about the government?
According to a whitepaper by Cisco, the increase in global government IoT spending is largely driven by these 5 components:
Connected militarized defense
Decomposing the 5 main drivers of IoT investment growth
Employee productivity: employees can experience a significant productivity boost thanks to the applications of IoT technologies. This is because IoT has the ability to automate workplace processes and eliminate unnecessary manual tasks, such as HR filings.
Connected militarized defense: the acronym dIoT, or “defense internet of things,” has become a significant part of government defense plans. Indeed, the US government has invested 88% of sensor spending on defense, and the global dIoT market is anticipated to reach “ $40,950 Million by 2025, registering a CAGR of +13% during the forecast period of 2019 to 2025.” Some examples of dIoT include streamlining logistics processes, smart/hyperconnected military bases, and data warfare.
Cost reduction: a report by McKinsey outlines that IoT can save a lot of time and money for the manufacturing industry. “[IoT can] reduce equipment downtime by up to 50 per cent and reduce equipment capital investment by 3 to 5 percent by extending the useful life of machinery.”
Citizen experience: IoT can greatly augment daily experiences of the global population. For example, smart cities that are defined by IoT interlinked homes, transportation, healthcare, and more, have the potential to provide a boost to the citizen experience by making things faster, more efficient, and productive.
Increased Revenue: analysis from the same McKinsey report shows that IoT can serve as a massive revenue stream for the global economy, bringing in anywhere from $3.9 trillion to $11.1 trillion a year by 2025.
The Internet of Things may have entered the mainstream in the mid-to-late 2010s; however, the global IoT industry has only just begun to flourish, and will continue to do so as the global digitalization agenda moves forward.