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Industrial 'Internet of Things' to boost UK economy by $531bn by 2030
A system of interconnected devices, known as the Industrial Internet of Things or the fourth industrial revolution, could create a "major strategic shift" and add around half a trillion dollars to the UK economy by 2030, according to a new report from Accenture
Adopting the Internet of Things, a connected system of devices that monitor and feedback information, on an industrial level could boost the British economy by $531bn (£352bn) by 2030, according to a new report.
Calling this digital development “arguably the biggest driver of productivity and growth in the next decade”, Accenture estimates that the Industrial Internet of Things -- which has also been called the fourth industrial revolution or Industry 4.0 -- could add $14.2 trillion to the world economy over the next 15 years by improving productivity, reducing operating costs and enhancing worker safety.
At Marathon Oil refineries, for example, employees wear a wireless device that tracks harmful gas exposure during a worker’s shift and allows managers to monitor the location and safety of all staff members on shift.
The sector-wide adoption of these connected systems will redefine how workforces operate and could lead to the creation of an “outcome economy”, whereby businesses will have to deliver not just purchasable products but an ongoing service with the customer, such as connected car tyres that report their status back to the manufacturer.
“As businesses move to this notion of the outcome economy, a company selling products, such as machinery or appliances, will change to a service company,” Paul Daugherty, chief technology officer of Accenture, told The Telegraph. “This creates a major strategic shift.”
An Accenture survey of 1,400 C-suite decision makers from some of the world’s largest companies, including 736 chief executive officers, found that 84pc of respondents believe the Industrial Internet of Things will generate new, service-based income streams for their organisations.
However, 73pc said their companies have yet to make any concrete progress in this area, and only 7pc have developed a comprehensive strategy.
“Companies are not yet ready to take advantage” of this development, “which could slow the opportunity in real life,” Mr Daugherty said, adding that this topic, and how it relates to global economic growth, is likely to be the focus of much discussion at the World Economic Forum in Davos this week.
While the fourth industrial revolution would boost the UK economy to the tune of half a trillion dollars, Accenture estimates that it could be worth $700bn to Germany, $1.8 trillion to China and $7.1 trillion to the US -- 2.3pc higher than trend projections -- by 2030.
However, the UK is unlikely to reach that level without a concerted drive from political and corporate leaders.
Mr Daugherty said: “If companies invest more than they do and if the government can pull out the stops on enabling factors” such as education, skills training, and entrepreneurialism, the Industrial Internet of Thing’s economic contribution over the next 15 years could rise from the $300bn mark to above $500bn.
“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.”