Worldwide spending on the Internet of Things (IoT) will grow at a 17% compound annual growth rate (CAGR) from $698.6 billion in 2015 to nearly $1.3 trillion in 2019, according to International Data Corp (IDC).

On a geographic basis, Asia/Pacific is the clear leader in IoT spending, with more than 40% of the worldwide total coming from that region in 2015. North America and Western Europe are the second and third largest regions, with combined spending of more than $250 billion in 2015.

The Asia/Pacific region’s robust IoT spending outlook builds on three dynamics, said Marcus Torchia, research manager, Internet of Things at IDC. One is that developing countries’ technology investment needs are not fully met with traditional IT, which is allowing IoT investments to accelerate. Another is that government investments in infrastructure development and local business modernization are incorporating more IoT elements. And a third is that a burgeoning new consumer class is accelerating expenditures in goods and services, including those with IoT components.

From a vertical industry perspective, manufacturing and transportation led the way in worldwide IoT spending, with 2015 totals of $165.6 billion and $78.7 billion, respectively. Over the next five years, the industries forecast to have the fastest IoT spending growth will be insurance, healthcare and consumer goods, the firm predicts.

"Manufacturing and transportation are both a good fit for IoT deployments," said Vernon Turner, senior vice president and IoT research fellow at IDC. "Both industries have been connecting their supply chains, products, customers, and even workers for some time now, and really embrace the value of business outcomes."

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