Internet of Things: The Future Impact on Industries and Countries

Strategy Briefing

About This Report

Feb 2018

The Global Internet of Things (IoT) industry is expected to surge, together with an exploding number of devices being connected over the foreseeable future. Advanced countries hold the strongest starting positions to embrace IoT technologies first, which can help reach the goals of Industry 4.0 and similar strategies. The technology is rapidly entering the industrial sphere, where sectors like manufacturing, finance, transportation, and utilities are expected to benefit most from IoT adoption.

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Internet of Things: The Future Impact on Industries and Countries

Internet of Things (IoT) transforms economies

Internet of Things technology is gaining acceptance around the world, with 100-150 billion devices expected to be connected together by 2030. While currently the IoT is often popularised in the consumer segment, massive impact can also be anticipated in the business sector. Industries start investing in computerised systems, which should accelerate adoption of the IoT technology over 2017-2030.

IoT adoption to mix current trends in global economy

IoT adoption is driven by economic, technological and social trends. The shifting frontier to the east has dried manufacturing expansion in developed countries, nearly doubling developing countries’ output over the last decade. The new technological revolution, led by IoT, can equalise these economic trends.

Developed countries see potential in Internet of Things

IoT and related technologies offer all necessary incentives to reduce developed countries’ disadvantages costs-wise, reboot investments, and drive productivity gains. Governments are expected to put all necessary efforts into infrastructure, laws and promotion of IoT in an endeavour to spur growth in certain economic sectors, such as manufacturing.

US to lead adoption, European countries being close by

Advanced countries are undoubtedly most ready to provide the largest contribution to the IoT technologies adoption. The US being a huge innovation base, strong financial and talent hub will lead the transition. Western Europe has similar capabilities, especially in sectors such as manufacturing.

Strong growth envisioned in Asia Pacific

Asia Pacific is a versatile region with both advanced and developing countries residing. In the longer term, the region can be expected to offer more global IoT adoption, led by China catching up in technologies. The great country’s potential will be additionally spurred by the “Made in China 2025” programme.

Utility industry – best ready to adopt IoT in the short term

Straightforward and often universal around the globe, utility operations are seen as the most probable winners in the development of IoT in the short-term. The sector will benefit from wider data gathering capabilities and more effective infrastructure control through connected systems via the cloud.

Digitalization trend to bring IoT solutions into service sector

The ongoing digitalization trend in the service sector is set to go far beyond consumers. Financial, insurance, logistics and business service companies will be incentivised to reshape business models, increasing interconnectivity between the industries to automate operations and make better-calculated decisions.

Massive opportunities seen for manufacturing sector

Manufacturing is expected to benefit vastly from IoT solutions. Goods manufacturers operating in advanced industries will be first to feel the advantages of interconnected production. Countries’ government-sponsored Industry 4.0 revolution is set to add more strength in IoT usage in the manufacturing sector.

Introduction

Scope
Key findings
Key findings (2)
What is Internet of Things?
The three pillars of Internet of Things
Internet of Things to be key technology in Industry 4.0
Internet of Things: A key pillar in the Fourth Industrial revolution

Opportunities and Threats of the Internet of Things

Internet of Things to kick-start hi-tech goods industry
Growing industrial connectivity to boost M2M traffic
Potential high, but cybersecurity remains an issue
Cybersecurity threatens adopters, yet solutions are under development
Governing institutions to play important role in early adoption

Implications For the Internet of things Adoption

Drivers of Internet of Things adoption
Economic: Adoption spurred by Western countries losing global positions
Technological: Growing internet adoption brings new opportunities
Technological: Cloud computing grows in acceptance around the world
Social: IoT adoption driven by unfavourable demographic tendencies

Countries’ Readiness

Assumptions for Internet of Things adoption
Developed regions lead the way for IoT adoption
Countries that are most ready to adopt IoT technologies
US expected to stand as the global leader for IoT innovation
Western Europe: Manufacturing sector in search for productivity growth
Western Europe: Scandinavian states set example for larger countries
Asia Pacific: Developed countries lead, yet China boasts largest potential

Effect on Economic Sectors

Key areas to consider for industries’ readiness estimation
Sectors most ready to adopt IoT solutions
Energy and utilities: Prime short-term adopters of IoT
Finance and insurance: Digitalization drives IoT application
Transportation: Network overhaul brings benefits to service providers
Transportation: Autonomous cars to lift adoption of IoT to new level
Manufacturing: Advanced goods producers lead sector’s readiness index
The three pillars on which lies IoT success in the manufacturing sector
Industrial IoT adoption to grow strongly in key manufacturing industries
Germany implements industry 4.0 revolution to replenish manufacturing
Business services: Cloud computing drives sector’s expansion

Conclusions

IoT adoption to accelerate, driven by combined efforts
Advanced countries benefit from rising IoT adoption
Key economic sectors expected to boost IoT application worldwide