Through our research, we have
generated broad findings about the
evolution of the IoT and its impact,
based on a bottom-up approach. The
findings include perspectives on the
value-creation potential of the IoT and
the disaggregation of that value, as well
as detailed analysis on the reasons for
these changes. Among our key findings:
— The economic value that the IoT could
unlock is large and growing. By 2030,
we estimate that the IoT could enable
$5.5 trillion to $12.6 trillion in value
globally, including the value captured
by consumers and customers of IoT
products and services.
— The IoT’s potential for economic value
is concentrated in certain settings
(the types of physical environments
where the IoT is deployed) and use-
case clusters. There are 99 setting
and use-case clusters, and the top
five represent about 52 percent
of the potential economic value of
the IoT in 2020. Looking ahead to
2030, the share of these same five
combinations decreases to about 40
to 48 percent of potential economic
value as more use cases gain
traction.
— The majority of value can be created
in B2B applications. By 2030, we
estimate that B2B applications will
account for about 65 percent of the
potential of the IoT. But the value of
B2C applications is growing quickly,
spurred by faster-than-expected
adoption of IoT solutions within the
home.
— While the potential economic value
of the IoT is considerable, capturing
this value has proved challenging,
particularly in B2B settings.
Many enterprises have struggled
to successfully transition from
running pilots to capturing value at
scale. We estimated the total value
captured by 2020 ($1.6 trillion), while
considerable, to be in the lower end
of the range of the scenarios we
mapped out in 2015.
— The value-capture picture varies
across settings. In the Home setting,
adoption and impact grew faster
than expected, and given existing
trends, we anticipate adoption and
impact at Offices and Work Sites
to accelerate. Conversely, value
creation is progressing slower than
expected in Factories (which we
expect to generate the most value
of all settings), Outside, Retail
Environments, and Vehicles.
— In general, the technology needed
to implement the IoT is available and
sufficient. In addition, customers
see real value in deploying the IoT.
But in settings that have lagged
behind, organizational challenges,
technology cost, and issues with
cybersecurity, interoperability, and
installation have all too often resulted
in “pilot purgatory.” The starkest
example of this is in Factories, where
70 percent of manufacturers have
been unable to scale beyond pilots.
— Interoperability is crucial to achieving
maximum impact for the IoT. About
25 percent of the 2030 lower-
value estimate could be enabled
by interoperability, while at the
high end, up to 74 percent could be
enabled by broad interoperability.
The fundamental challenge is that
current technology stacks are
fragmented (except at the cloud
layer) and siloed, with many walled-
garden, proprietary systems. Solving
this issue is critical for the IoT to
reach its maximum potential.
— The developed world will account
for 55 percent of the total global
value potential of the IoT in 2030,
decreasing from 61 percent in 2020.
China is becoming a global IoT force,
not only as a manufacturing hub and
technology supplier but also as an
end market for value creation. By
2030, China could generate about
26 percent of the total global value
of the IoT, equal to the potential of
all emerging markets combined (and
above its share of the global economy
of about 20 percent). In the same
period, we expect the emerging
world’s share to grow from 16 percent
to 19 percent of total potential value.
In addition to researching the potential
of the IoT to create value, we have
examined why the technology has
gained ground in some settings and
lagged behind in others.
From a tailwind perspective, the verdict
is clear. Customers see real value in
deploying the IoT. Compared with 2015,
the technology and networks needed
to implement the IoT are available and
9The Internet of Things: Catching up to an accelerating opportunity