Embracing Industrial IoT can reap rewards for your bottom line
The Internet of Things continues to grow, and new consumer and business products have garnered a significant amount of attention. However, some of the biggest advantages might lie in the industrial sector, as IoT networks and sensors can lead to significant savings.
Overall Economic Impact
As with all things related to tech, it’s difficult to predict just what impact industrial IoT technology will have. However, estimates from expert analysts agree that the impact will be tremendous. According to analysis from the McKinsey Global Institute, the expected economical impact is likely to reach at least $4 trillion per year by 2025, and estimates range as high as $11 trillion. The area where this impact will be highest is likely to be factories, where the estimated impact ranges between $1.2 and $3.7 trillion. The impact on cities, which came in second, ranges between $0.9 and $1.7 trillion. The retail setting, which garners more headlines than industrial IoT applications, will see an impact between $0.4 and $1.2 trillion.
Industry thrives on energy, and the cost of power plays a major role in manufacturing and distribution costs. Companies often can’t control their energy costs, but there is one area where companies can have an impact: efficiency. Perhaps the most powerful components in the industrial IoT suite are sensors, which provide valuable data that lets companies use their energy most effectively. Through smart technology and sensors, the IoT can cut back on bills significantly; the Silicon Valley-based company Enlighted, for example, claims to reduce clients’ lighting bills by 60 to 70 percent and their air conditioning bills by 20 to 30 percent. In factories and other industrial settings, even a modest reduction in energy usage can translate to massive savings that far outweigh the cost of IoT devices and infrastructure.
According to Accenture, companies across the globe spent $20 billion on the industrial IoT in 2012. By 2020, Accenture expects this number to rise to $500 billion, potentially creating $15 trillion of global GDP value by the year 2030. Part of the power provided by the industrial IoT is automation, as smarter devices are taking on tasks only humans previously performed. Further advantages come via better flexibility. Industry has a reputation for being slow to respond, but industrial IoT can let manufacturers respond more swiftly, leading to improved productivity.
In addition to creating green credentials, industrial companies have another reason to think about the environment: regulations. New laws require companies to operate more efficiently, and regulations are only expected to get tougher over time. Industrial IoT devices cut back on energy consumption, which also has the effect of making it easier to comply with new rules. Fresh water is also being consumed at a rapid pace, and industries that rely on water, such as the agricultural field, will find efficiency to critical. IoT sensors and can help farmers cut back on their water usage significantly, leading to better profits and easier compliance with whatever future regulations bring.
The Internet of Things will continue finding its way into homes and offices across the globe, and growth will only increase for the foreseeable future. However, the biggest impact might is likely to be found in industrial settings, where IoT devices provide a relatively cheap way to increase efficiency considerably. As the IoT continues to grow, companies will undoubtedly find even more ways to make the most of it.