Even my claims are now being out done by none other than the number one consulting firm in the world. McKinsey Consulting are claiming in an article that the Internet of Things (IoT) will generate $4 to $11 trillion in value by the year 2025. That’s annually! Which makes my $1.0 to $1.8 trillion per year look pretty small in comparison. Its good to have such prestigious company in the same nuthouse that I occupy. Here’s what they had to say.
The Internet of Things—sensors and actuators connected by networks to computing systems—has received enormous attention over the past five years. A new McKinsey Global Institute report, The Internet of Things: Mapping the value beyond the hype, attempts to determine exactly how IoT technology can create real economic value. Our central finding is that the hype may actually understate the full potential—but that capturing it will require an understanding of where real value can be created and a successful effort to address a set of systems issues, including interoperability.
To get a broader view of the IoT’s potential benefits and challenges across the global economy, we analyzed more than 150 use cases, ranging from people whose devices monitor health and wellness to manufacturers that utilize sensors to optimize the maintenance of equipment and protect the safety of workers. Our bottom-up analysis for the applications we size estimates that the IoT has a total potential economic impact of $3.9 trillion to $11.1 trillion a year by 2025. At the top end, that level of value—including the consumer surplus—would be equivalent to about 11 percent of the world economy.
McKinsey are on the same wave length that I am in terms of the impact that the Internet is going to have on the business community. They are applying their analysis to all industries to come up with their much larger number. However the reasons that the value are being generated are the same. They note.
The digitization of machines, vehicles, and other elements of the physical world is a powerful idea. Even at this early stage, the IoT is starting to have a real impact by changing how goods are made and distributed, how products are serviced and refined, and how doctors and patients manage health and wellness. But capturing the full potential of IoT applications will require innovation in technologies and business models, as well as investment in new capabilities and talent. With policy actions to encourage interoperability, ensure security, and protect privacy and property rights, the Internet of Things can begin to reach its full potential—especially if leaders truly embrace data-driven decision making.
A little background into our name. In the late 1990’s Professor Paul Romer then of Stanford University came up with what has come to be known as “New Growth Theory” how economies grow in the 21st century. It used to be that if you wanted to grow the economy you should invest in financial capital, transportation or communications. These investments had the effect of enabling further growth in the economy. This theory has waned as the economy has become more advanced. Therefore a new theory for growth was needed. In essence Professor Paul Romer of New York University “New Growth Theory” is that you invest in People, Ideas & Things. I thought it would be worthwhile to adopt this as the name of the company and only converted the “things” to “objects” as we are object based software developers. Clearly this also ties in with the Internet of Things being a large part of Professor Paul Romer’s new growth theory. McKinsey now seem to be on to this as well. Here is Professor Romer’s concluding remarks in the Library of Economics and Liberty.
Only a failure of imagination, the same one that leads the man on the street to suppose that everything has already been invented, leads us to believe that all of the relevant institutions have been designed and that all of the policy levers have been found. For social scientists, every bit as much as for physical scientists, there are vast regions to explore and wonderful surprises to discover.
The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative, profitable and successful means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here.