4 Takeaways From Accenture's $14 Trillion IoT Prediction
Accenture's report says the industrial Internet of Things will create more jobs than it kills, but that companies aren't doing much to exploit it yet.
Accenture has lobbed in its prediction of how much the economy will get from the industrial Internet of Things -- $14.2 trillion by 2030, which is an eerily similar to Internet of Things predictions from GE and Cisco.
But that $14 trillion figure isn't the most interesting -- or actionable -- idea in Accenture's report. The report focuses on the industrial Internet of Things -- tactics such as putting a sensor on a welding machine, a jet engine, an x-ray machine, or a turnstile and gathering data from that to make better decisions, like when to do maintenance or increase staff. This industrial IoT is easier to execute in many ways than a customer-facing IoT strategy, like Google's Nest, because the industrial IoT involves a closed loop of company-controlled gear and employees, with clear goals of cutting costs or driving up sales.
Still, big obstacles remain to industrial IoT success, as Accenture makes clear. Here are three conclusions that struck me about Accenture's report:
Developed economies are better positioned than emerging economies The industrial Internet of Things requires a strong technical and business foundation, and Accenture ranked countries into three broad groups in terms of how ready they are to take advantage of IoT. Factors included the society's willingness to embrace new technology and the social and organizational changes it might bring; R&D spending and tech skills; and business fundamentals such as strong banking, education, and supplier networks.
Accenture ranked the US No. 1 on this "national absorptive capacity," with Switzerland, the Nordic countries, and the Netherlands in the top tier. The likes of China, Germany, Japan, and the UK land in the middle tier. The lowest tier includes Spain, Brazil, Italy, India, and Russia.
The US had a jump in electricity production and use, Accenture writes, so it got an economic head start in industries tied to that trend. The same will happen for countries in industrial IoT, it predicts.
Robots wont' take all workers' jobs Accenture's survey finds 87% of executives think the industrial IoT will create net new jobs. A lot of employees will find their assurance of "freeing up workers to perform more creative and collaborative work" no assurance at all, since they've seen automation cut factory jobs over recent decades. Accenture cites examples of blue-collar workers becoming more important, though -- like an oil-drill operator using data to tweak performance out in the field.
In addition to requiring an educated workforce, such a world also requires companies that can handle decentralized decision-making, since not all data can flow back to a central nerve center for analysis.
IoT will change the products companies sell Data will change expectations, and it already is changing the conversation. If industrial IoT allows for predictive maintenance, so you'll know when my machine will break, why should I buy an extended warranty? In fact, if you know when my motor will break, why don't I buy "operating minutes" for my tractor, oven, or jet engine, instead of the machine itself? Accenture describes this as the "outcome economy," offering another example of guaranteed crop yields from a particular parcel of land.
This "outcome economy" will send ripples back through business models. Does your existing break-then-fix service channel have a way to respond pro-actively before problems hit? And how do you get paid for pro-active, non-emergency maintenance advice instead of to-the-rescue service?
Almost no one has a real IoT plan So, you don't have a crystal clear game plan to get your chunk of that $14 trillion industrial IoT bonanza? Accenture says hardly anyone else does either. Just 7% of 1,400 C-suite decision makers it surveyed have a comprehensive plan and investments to tackle this. Seventy-three percent say they haven't made any concrete progress. Yet 84% think their companies can wring new, service-based revenue from the industrial IoT.
There's a huge gap between the 84% believers and the 73% doing nothing about it. Is it $14 trillion worth of huge? Check back in 15 years.
Chris Murphy is editor of InformationWeek and co-chair of the InformationWeek Conference. He has been covering technology leadership and CIO strategy issues for InformationWeek since 1999. Before that, he was editor of the Budapest Business Journal, a business newspaper in ... View Full Bio
We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
2018 State of the CloudCloud adoption is growing, but how are organizations taking advantage of it? Interop ITX and InformationWeek surveyed technology decision-makers to find out, read this report to discover what they had to say!
Cybersecurity Strategies for the Digital EraAt its core, digital business relies on strong security practices. In addition, leveraging security intelligence and integrating security with operations and developer teams can help organizations push the boundaries of innovation.