A recent McKinsey & Company’s report on opportunities in IoT suggested that by 2030 global IoT profit potential could be between US$5.5 and $12.6 trillion.
Currently, the top five areas of IoT utilisation are in operations optimisation in factories; on worksites; in city infrastructure (e.g. traffic management); in non-urban areas (including non-urban autonomous vehicles and military applications); and in the home, which collectively represent 50% of current value. But by 2030, the value of the same five clusters is projected to reduce to 40-48% as other use-case clusters develop and gain prominence.
B2B holds the greatest value potential and by 2030 will account for around 65% of potential. However, the value of B2C applications is also growing rapidly as consumers have been adopting IoT technologies more rapidly than expected.
While the B2B space offers major opportunities, the report – entitled ‘The Internet of Things: Catching up to an accelerating opportunity’ – suggested that capturing them is challenging, with many enterprises struggling to transition from pilot programs to value-capturing operations.
The report noted that the value captured in IoT amounted to just $1.6 trillion in 2020 – well below expectations detailed in an earlier 2015 version of this report.
In home settings, the adoption and impact of IoT grew faster than expected while value creation in factories, retail and in vehicles was lower than expected.
The report also noted that the technology needed for implementation of IoT is available, and sufficient at this time, and that customers do see value in the IoT. However, organisational challenges, cost, cybersecurity, and interoperability issues are listed as reasons for the inability of pilot programs to progress. This is particularly so in factories where 70% of pilot programs do not move forward.
Notably, the greatest benefits of IoT adoption in manufacturing, will be in operations management; while in healthcare, monitoring and treating illness will see the greatest benefits. On worksites, operations management in construction will lead. In cities, centralised and adaptive traffic control benefit most, while in the retail space self-checkout-related services will be the most prominent adopters of IoT. In the home, chore automation will benefit most. In vehicles as a subcategory, after-sales service for passenger vehicles and trucks will reap the greatest benefits. Finally, in offices it will be human productivity.