According to Statista, there are approximately 15.14 billion connected IoT devices as of 2023 which is equivalent to just under twice the total number of people worldwide (eight billion). Finance Online suggests the volume of these is expected to grow year-on-year to over 25 billion within the next seven years with 5G and other technologies driving market uptake.
IoT spending is also rising in line with the number of people using connected devices. Year-over-year IoT expenditure has increased by $40bn since 2018 with spend in 2022 estimated to top over a billion, though sources suggest this figure was missed by around $200m overall.
In terms of IoT vs non-IoT devices, IoT Analytics says there has been a “notable” shift to the former over the last decade. In fact, by 2030 three quarters (75%) of all devices are forecast to be IoT.
In 2020, enterprise IoT comprised 76% of total IoT market revenue, and that figure is expected to remain “relatively steady”, albeit falling to 73% in 2024, according to Global Data. Yet research from Statista suggests that IoT technology holds significant potential across industries. The study predicts that there will be around 50 billion IoT devices connected by 2030.
As IoT continues to grow, some industries are leading investments in this revolutionary technology. So the question remains: Which sectors?
According to Imaginovation Insider, agriculture, energy, finance, healthcare and manufacturing are the top five sectors embracing the Internet of Things.
Proficient users – Big farmer
Statista research claims that the technology’s application in agriculture will grow from $14.79bn in 2018 to just shy of $30bn by 2030. “The term ‘smart agriculture’ denotes the application of IoT solutions in the industry and it uses IoT sensors to collect environmental and machine metrics,” the research firm said. “The data can help farmers make informed decisions and improve just about every area of their work – from livestock to crop farming.”
In recent years, agriculture’s IoT toolkit has widened with the likes of drones being used to replace tasks typically carried out by humans, yet they have also made way for completely new tasks. Agricultural drones, as they’re known, are equipped with sensors and cameras which can now be used for imaging, mapping, and surveying farms, as shown in a recent feature on TI that looked at robotics start-ups transforming the sector.
Drones used in farming
Essentially there are two types of drones: ground-based drones and aerial drones. Ground drones are robots that survey the fields on wheels, whilst aerial drones are unmanned aerial vehicles or flying bots. Besides the surveillance capabilities, drones can also perform a varying number of tasks such as planting crops, fighting pests, agriculture spraying and crop monitoring.
IoT solution Biz Intellia says: “Covering the energy sector with its real-time applications and state-of-the-art innovations, it uses sensor devices and gateway connectivity to derive actionable insights and use them to develop new and advanced services for enhanced productivity. It further improves real-time decision-making, complex operability, and overall experiences.” And it perhaps is right to suggest so with IoT’s market value in the sector expected to grow at a CAGR of 11.8% over four years from 2021-2025.
Statistically speaking, the global IoT value in the energy market was valued at around $20.2bn in 2020, according to Statista, with this estimated to grow to $25.2bn by 2025.
In terms of IoT in industry, according to a report by Forbes, some general statistics allude to the vitality of the technology in the sector: almost 47% of energy sector executives indicate they have implemented IoT across functions; data sources for energy include the use of machinery (49%) and robots (46%); IoT is deployed by 45% of energy companies to monitor asset performance; 43% of energy companies use IoT to enhance customer experiences, and 40% of energy companies reported an overall boost in productivity.
In particular, the use of sensors has enabled real-time monitoring of room temperatures, simplified applications, and have remote control over the energy consumption patterns.
Banks and customers have become accustomed to managing financial transactions through different connected devices. As the amount of data transferred and gathered is huge with IoT, financial businesses can measure risk accurately.
With time, “banks will start using sensors and data analytics to collect a lot more information about customers and thus offer personalised services. It will help the banks understand how their customers buy and spend their money,” Imaginovation Insider claims.
On a more mundane level, according to Finance Monthly, finance departments will find record-keeping and reporting far more automated and efficient.
The ability to monitor and analyse data from sensors in almost every nook and cranny of the business, treasurers will gain a much firmer grip on cost and performance and be able to access a huge wealth of data at any level of detail.
With access to analytics solutions made possible by edge computing, organisations can react far quicker to events and opportunities. They can employ predictive and prescriptive analytics to extract critical insights from detailed information about inventory, specific financial flows, facilities, business units or assets.
Healthcare is another sector that has seen significant growth, though the potential for smart healthtech solutions is sizeable. Fortune valued IoT healthcare at $71.8bn in 2020 and said this rose to $89bn the following year. But by 2028, that figure is predicted to reach $446.5bn.
So where is this surge coming from? Increased use of healthcare information systems, the surge of big data in the industry, enhanced device accuracy and connection, and the large penetration of connected devices in healthcare are driving the projected growth.
Not only does IoT have the potential to transform typically paper-based healthcare treatment, it can also address the need for improved diagnostics and focused therapy solutions that has acted as a grey cloud over the health sector.
Perhaps unsurprisingly, the Covid-19 pandemic played a key part in IoT’s boost in healthcare, according to Forbes. The demand for wearable gadgets that measure health and fitness information and location increased – these can be paired with devices such as computers and phones. They can also monitor asthmatic and diabetic patients.
Yet IoT still comes with its challenges. Outdated infrastructure is a renowned concern in the sector and businesses are still plagued by legacy healthcare IT infrastructure. What’s more, a big issue with IoT is data security and privacy, which increases not only healthcare’s exposure cyberattacks, but all sectors.
According to a recent study by Cogzinant, “manufacturing-intensive industries lead in IoT deployment.”
Over half of IoT leaders (53%) come from five manufacturing-intensive industries: consumer goods, life sciences, manufacturing, oil and gas and utilities. “Largely because of investments in Industry 4.0, manufacturers themselves and this group of manufacturing-intensive businesses (plus transportation and logistics) have invested early into IoT, deploying sensors, actuators, and manufacturing equipment with digitally augmented processes to create “smart” manufacturing environments.”
IoT deployment across industry
Gillan Taddune, CEO of Banyan Water, says that “IoT technology is the fourth industrial revolution. The rise in IIoT, or Industrial Internet of Things, is the main driving force of the fourth industrial revolution.”
Some of the leading IoT applications in manufacturing include: monitoring of the production flow leads to flow optimisation, waste reduction, and the minimisation of unnecessary work in process inventory; remote equipment management, allowing for tracking and maintaining of equipment’s performance and cost reduction; condition-based maintenance notifications, helping optimise machine availability, and supply chains, where IoT solutions help track vehicles and assets, improve manufacturing and supply chain operations’ efficiency.
Still, the Cognizant study suggests that on the other hand, when seen as a group, these companies lag behind IoT leaders and are more closely aligned with IoT laggards when it comes to adopting the companion digital technologies necessary to building “smart factories”.
Issues with IoT deployment
A recent report by McKinsey said that many enterprises have launched pilot projects to develop IoT-enabled products and services or use the IoT to achieve operational improvements. “Of these, less than 30% have taken their IoT programs beyond the pilot phase.” And even among enterprises with large-scale IoT efforts, a significant gap separates the top tier of performers from the bottom tier.
In a survey of IoT practitioners at 300 businesses with mature IoT programs (those that have expanded beyond pilot projects), about one-sixth said their companies had seen a significant payoff from IoT, an aggregate cost and revenue impact of at least 15% – the IoT leaders.
Yet at the other end of the spectrum, about one-sixth of respondents – the IoT laggards – said their IoT efforts had yielded an aggregate revenue and cost improvement of less than 5%.
McKinsey findings of financial impact of IoT pilot projects
So what separates the leaders from the laggards? In the words of McKinsey: “These companies are aggressive: by pursuing a large number of IoT applications, they quickly climb the IoT learning curve and pass the point at which new applications consistently generate a great deal of value.
“They develop a clear idea about the commercial opportunities associated with IoT, and they align everyone in the organisation, from the executive suite to the front lines, toward a common set of goals. And they’re pragmatic about how they implement their IoT plans, building their IoT offerings around existing products and services and relying on outside partners to furnish them with sophisticated technologies.”
The problem with businesses piloting unsuccessful IoT strategies is due to poorly defined business objectives, according to a whitepaper from Software AG.
“Such difficulties largely come down to a lack of understanding of the specific needs of the project and the complexity of the IoT solutions themselves. That’s why building a clear business case is necessary to help identify desired results and how to achieve them.”