Beyond the hype: Mapping the value of IoT

Description

The Internet of Things has the potential to fundamentally shift the way we interact with our surroundings. The ability to monitor and manage objects in the physical world makes it possible to bring data-driven decision making to new realms of human activity—to optimize the performance of systems and processes, save time for people and businesses, and improve quality of life.

The McKinsey Global Institute, in collaboration with McKinsey’s Telecommunications, Media and High Technology practice and the McKinsey Business Technology Office, have created a bottom-up model of IoT applications across different sectors of the economy and all parts of the world. We have sized more than 150 applications of IoT technology by looking at the potential benefits they can generate, estimating potential productivity benefits, time savings, improved asset utilization, as well as the economic value of diseases, workplace accidents, and deaths avoided.

We identified nine physical settings in which IoT use cases could be deployed, including the human body, homes, offices, factories, retail environments, worksites, vehicles, cities, and outdoors. We compared potential value in B2B vs. B2C applications, developed vs. developing markets, and estimated the incremental value of interoperability among IoT systems.

We will outline key success factors for each player in the IoT ecosystem, from suppliers of technology to corporate customers to individual consumers, and identify specific enablers and barriers to capturing value.