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Industrial Internet of Things (IoT): Big Opportunities, Challenges

Published
  • January 27 2015, 6:00am EST

The “Industrial Internet of Things” (IIoT) could contribute $14.2 trillion to world output by 2030, according to new research by Accenture. But these potential gains are at risk because neither companies nor governments are taking sufficient actions to put in place the conditions necessary for the wide adoption of new digital technologies, the firm says.

The IIoT, which enables new digital services and business models based on intelligent connected devices and machines, is expected to particularly boost growth in mature markets, according to the report, “Winning with the Industrial Internet of Things.”

By 2030, capital investments in the IIoT and the productivity gains that should follow are expected to add $6.1 trillion to the United States’ cumulative gross domestic product (GDP). If the U.S. were to invest 50% more in IIoT technologies and improve enabling factors, such as its skills and broadband networks, the gain could reach $7.1 trillion by 2030, raising its GDP 2.3% higher in 2030 than trend projections.

But the report shows that these gains are at risk, in part because 73% of companies have yet to make concrete plans for the IIoT, according to a survey of more than 1,400 global business leaders, of whom 736 are CEOs. Only 7% of those surveyed have developed a comprehensive strategy with investments to match.

“The Industrial Internet of Things is here today, helping to improve productivity and reduce costs,” Paul Daugherty, CTO at Accenture, said in a statement. “But its full economic potential will only be achieved if companies move beyond using digital technology to make efficiency gains alone and unlock the value of data to create new markets and revenue streams. That means radically changing how they do business: working with competitors, forming partnerships with other industries, redesigning organizational structures and investing in new skills and talent.”

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