The Internet of Things. Beyond Data.

It’s not just the buzzword populating conversations between geeks. Data is almighty. Nonetheless, its real potential has hardly been unveiled or quantified properly. Yet.

The internet of things (IoT) is set to unlock value of $11 trillion per year globally by 2025. Where does it all come from?

Let’s take a step back and understand what the IoT is first. In the words of tech-giant Microsoft:

the term “Internet of Things” isn’t new. Almost 20 years ago, MIT professors described a world where “things” (devices or sensors) are connected and able to share data. Data coming from these devices and sensors provide business insights that were previously out of reach. The invaluable insights enabled by harnessing and analyzing the data from these connected devices are what the Internet of Things is all about.

The McKinsey Global Institute recently published a report analyzing the various settings where the IoT will produce the biggest changes and create the most value. Each setting (pictured below) provides a conducive environment for IoT applications to thrive in.

Here’s some of the most sensational findings in some of my favorite settings. Namely, Human, Home and Cities.

Human

Application in this setting has two essential goals: improving health and raising productivity through wearables and ingestibles. Wait a minute — yes, ingestibles.

In the health space, IoT is expected to deliver the largest value from the monitoring and treatment of illnesses (improved quality of lives to patients with chronic conditions and cost savings on treatments).

A secondary source of value originates from wearable devices. The use of fitness monitors can improve the health of workers resulting in improved overall productivity.

The aggregate impact of IoT Human application is expected to generate up to $1.1 trillion per year.

Home

At home, IoT can unfold in operations of the house (e.g. energy management), security and household activities. Automation of chores alone can generate 17 percent in savings (time and money) resulting in $197 billion of additional value annually.

Coupled with a more efficient energy management (lower utilities) and increased home security (lower insurance costs), the total impact of IoT in people’s homes can reach as high as $350 billion per year.

Cities

The idea of a smart city is one that is able to offer better services, relieve traffic congestion, conserve water and energy and ultimately improve the living conditions of its dwellers (and visitors).

Some of the smart features include: traffic control, driverless cars, air and water quality monitoring and crime prevention.

Interestingly, the bulk of the impact shall derive from the monitoring of air and water and from an adaptive management of traffic.

A reduction in air and water pollution by 15% can generate up to $690 billion of value. Along with a reduction of traffic congestion, cities can produce up to additional $504 billion per year.

Total direct economic impact from cities globally is thought to generate as much as $1.7 trillion per year.

Just as powerful an impact will have IoT applications on Vehicles, Offices, Factories, Logistics, Worksites and Retail environments.

Connectivity and data are set to affect us as far deep as to disrupt most of our behavioural patterns resulting in dramatic changes in the very way we live, think and operate. Inside and outside our homes, inside and outside our cities. At day and at night. I think we shall call it Renaissance 2.0 and some days I feel blessed to be a millennial.