By networking everyday objects, the Internet of Things turns them into smart devices that – if regulated correctly – can help deliver significant benefits to many industries and society at large.
The Internet of Things (IoT) already consists of 7 billion devices – from fridges to thermostats to street lights – and is expected to grow to almost 50 billion objects by 2020.¹ The 2015 Accenture Digital Consumer Survey found that by 2020, nearly half of consumers will own a connected Internet of Things (IoT) device, with strongest demand for home cameras and security, smart watches and fitness devices.²
IoT is likely to be the next major value opportunity across industries. The Industrial IoT, for instance, is forecast to add $14 trillion to the global economy by 2030. As providers of key connectivity – between sensors, devices, data centres and people – the telecom ecosystem will be integral to the proliferation of the ‘internet of everything’. As business models evolve over the coming decade, linking those 50 billion new legacy sensors to a common network will require industries to work closely with the telecom ecosystem.³
Case study: Qualcomm – building interoperable IoT offerings
Semiconductor specialist Qualcomm has taken an integrated and interoperable approach when developing its offerings in IoT. By developing advanced chipsets and modules to bring various IoT use cases to life, it is building a comprehensive, cross-sector suite of IoT solutions that help companies and users overcome some of the largest challenges on interoperability and integration. Qualcomm Life, for instance, is an end-to-end, open and device-agnostic healthcare platform that integrates healthcare devices, stores and communicates health information, and provides remote monitoring.
Applications in industry
Automotive
The vehicle is becoming a digital hub for real-time two-way wireless data transfer. We are moving towards total connectivity between vehicles, traffic and municipal services through sensor-embedded roads and infrastructure; and between entertainment and navigation services connected with any of the myriad mobile devices embedded in the vehicle or in the hands of the traveller. By 2020, more than 90% of cars sold will be connected.⁴
Case study: Jaguar Land Rover – next-generation smart cars
Jaguar Land Rover has introduced self-learning intelligent cars that learn driver and passenger behaviours, needs and preferences. Integrating with users’ mobile phones, they can change comfort controls and entertainment choices, and offer calendar reminders and navigation guidance. Imagine a world where Monique comes out of the gym and heads to her car. The fitness wearable on her wrist reports a heart rate of 120 beats per minute and a body temperature of 102°F. The car accordingly pre-cools its inside air and chills the seat. Because it is connected to her refrigerator at home, the car knows she is nearly out of her favourite fitness drink. She is notified that her vehicle is approaching a grocery store, and the store then offers her a discount coupon on that very drink.⁵
Healthcare
In the healthcare and fitness sector, the worldwide market for wearable devices is expected to soar from 45 million units shipped in 2015 to more than 125 million by 2019.⁶ The number of digital consumer devices entering regulated markets has increased, with US Food and Drug Administration (FDA) approvals for these products expected to triple by 2018 (relative to 2014 levels).⁷ Wider availability of intelligent health devices will save the US health system an estimated $50 billion by 2018.⁸
Case study: Livongo Health – improving lives
California-based start-up Livongo Health helps users manage diabetes. It gives them a two-way smart glucose meter that communicates their reading in real time to a smart cloud. Analytics provide personalized insights based on the glucose reading and the user’s personal history. Livongo diabetes ‘educators’ are alerted if a user’s glucose level is too high or too low, contacting the user if necessary to offer advice.⁹
Electricity
Connected and interoperable devices are likely to contribute more than 5% of the cumulative electricity industry profits over the next 10 years. Profits foregone from lower consumption would be offset by higher savings, for a combined value addition of $18 billion for the industry. Increased adoption of smart meters by residential and industrial customers could add a further $55 billion.
Case study: Google – connecting homes
In 2014, Google acquired Nest for $3.2 billion,¹⁰ signalling a move by Google to develop a more integrated experience in the home. Nest and Google have established partnerships with lifestyle and home product brands that extend far beyond the original Nest thermostat. Examples include LIFX’s smart lightbulbs, primed to turn on at night to improve safety when a dwelling’s occupants are out; Jawbone wristbands that use motion-sensing technology to turn the heating on when the wearer wakes; and Mercedes-Benz cars that communicate with the connected house to turn on the heating when the vehicle and its occupants are 30 minutes from home.¹¹
Aviation, Travel and Tourism
In hotels, ecosystems of connected devices and better security algorithms could lead to a 10% improvement in security workforce productivity – equivalent to annual cost savings of $0.7 billion in 2025. The integration of IoT technologies into hotels will also reduce maintenance and utility costs, and improve workforce productivity, driving annual savings of $4 billion by 2025.
Case study: CytexOne – taking care of everything
CytexOne offers a comprehensive suite of systems for hotels covering everything from ventilation, lighting, occupancy detection and entertainment to minibars. Its Atlas remote monitoring system provides diagnostics and predictive maintenance on a subscription model. CytexOne claims that its hospitality automation, powered by IoT and real-time data, reduces labour costs, utility consumption, property maintenance charges and operational expenses.¹²
Unlocking value to society
The wider societal implications from IoT will also be significant.
IoT can support 12 UN Sustainable Development Goals
Source: GeSI / Accenture Strategy¹³
Adoption of IoT services across automotive, home energy management and logistics fleet management alone could lead to 26 million tonnes of avoided CO2 emissions over the coming decade.
IoT is also likely to be a key creator of new job roles. We estimate that more than 400,000 new jobs will be required across the telecom industry to support new revenue streams arising from IoT services.
According to an Accenture survey, 83% of CEOs interviewed strongly agreed that trust is the cornerstone of the digital economy.¹⁴ A study by telecommunications company Orange found that 67% of European consumers surveyed believe that organizations benefit the most from using their personal data. Only 6% identify themselves as the main beneficiary.¹⁵ Once companies gain ‘digital’ trust, they can better leverage business and technology opportunities relating to IoT or new and data-driven business models.
As IoT grows, it will need unified regulatory mechanisms. Today, those are covered by more than a dozen separate federal agencies in the United States (e.g. the FDA, the National Highway Traffic Safety Administration and many more). As industry boundaries become blurred, IoT will touch many different industries across every sector of the economy. However, the jurisdictional issues relating to it are not yet solved and, without greater coordination, they threaten the continued deployment of this technology and the benefits it can deliver.
From our DTI research, we have identified several technologies (3D printing, artificial intelligence, autonomous vehicles, big data analytics and the cloud, the Internet of Things and connected devices, and robots and drones) that are having major impacts across the 13 industries analysed to date. This article is one of a series looking at how each of these technologies is transforming business and wider society.
Footnotes:
1 Evans, Dave, The Internet of Things: How the next evolution of the internet is changing everything, Cisco, 2011.
2 Accenture, Digital Trust in the IoT Era, 2015.
3 World Economic Forum and Accenture, Digital Transformation of Industries: Telecommunications, 2016.
4 Accenture, The digital transformation of the automotive sector: From manufacturers to providers of mobility, page 9, “Connected vehicle”.
5 Rivington, James, “Jaguar Land Rover reveals ‘self-learning intelligent cars of the future’”, Tech Radar, 9 July 2014.
6 IDC, Worldwide Wearables Market Forecast to Reach 45.7 Million Units Shipped in 2015 and 126.1 Million Units in 2019, According to IDC [Press Release], 30 March 2015.
7 Accenture, Patient Engagement: How the Colossal Clash Will Disrupt the Digital Health Landscape [Infographic].
8 Accenture, Digital Health Solutions Expected to Save U.S. Healthcare System More Than $100 Billion Over Next Four Years, Accenture Finds [Press release], 4 June 2015.
9 Livongo, “Program Overview”, 2015.
10 Alphabet Investor Relations, Google to Acquire Nest [Press release], 13 January 2014.
11 Fjord and Accenture, The Era of Living Services, 2015.
12 CytexOne, CytexOne Connects Internet of Things for Hospitality Industry [Press release],” BusinessWire, 21 July 2015.
13 GeSI, Accenture Strategy, #SystemTransformation: How Digital Solutions will Drive Progress Towards the Sustainable Development Goals, 2016.
14 Accenture, Technology Vision 2016.
15 Orange, “The Future of Digital Trust,” September 2014.