A McKinsey study tries to quantify the economic impact of IoT on our near future as it is expected to usher in improvements to machines’ reliability and to our lives.
According to this study the annual value of IoT apps may reach around 11% of the world’s economy by 2025. They assume that governments and private organizations are going to become interoperable through a common network of policies and technologies. But please note that this is an assumption and not a proven pattern.
The most important 4 points of the report:
- McKinsey reports predict that more value is going to be created by business IoT apps rather than the consumer ones. There is no surprise in that, since consumer apps such as connected entertainment systems or household tools have limited value to offer in return, except to our attention. Business IoT will be used to avoid failures in high-end technologies and in sensitive fields such as public transportation or healthcare. This will lead to an increase in equipment reliability and a more efficient personnel deployment.
- Important financial savings thanks to the use of IoT. For example, doctors can use IoT in monitoring patient’s health, preventing hospitalization and therefore leading to immense cost cuts.
- It is predicted that IoT will become an important part of the virtual reality. It is assumed to reach factory floors and equipment repair shops first but in the end it will be available in consumers’ homes as well. For instance virtual reality goggles will observe and guide you through installation processes at home and work, leading to an important increase in productivity and efficiency.
- IoT’s potential economic impact to the global market is estimated by McKinsey between $3.9 trillion and $11.1 trillion / year by 2025. Interoperability with other systems will give equipment makers a complete view and an enhanced predictive analysis capacity in environments that use multiple systems. The interoperability advantages that IoT can bring to surface means that video, smartphones data and vehicle sensors could be used to monitor and optimize traffic, which can improve the quality of life in many cities around the globe.
McKinsey also warns that some IoT apps will result in reducing the number of employees needed, but – according to the latest projections – the world’s population is expected to grow to 1 billion by 2025 and in the end it could put some extra pressure on the already unsteady global work force.
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