Estimate the potential economic impact of the Internet of Things across economies in 2025, we have sized applications in nine settings. We estimate impact by examining applications that exist today, are evolving, or are likely to have significant adoption in 2025.
We measure both direct financial impact, such as potential savings from improved machine utilization, and non-financial factors, such as consumer time saved or improved health. We translate these non-financial impacts into economic value by gauging the value of time saved, improved health, extended life spans, etc. It should be noted that these estimates of economic impact are not equivalent to industry revenue or GDP figures and, therefore, diverge from various market projections.
The total potential value we estimate for the applications we size in the nine settings is $3.9 trillion to $11.1 trillion per year (Exhibit 7). The largest setting for potential value created by IoT applications in 2025 is factories, which includes manufacturing sites, hospitals, and farms. The potential value that could be unlocked with Iota applications in factory settings could be as much as $3.7 trillion in 2025, or about one-third of all potential economic value that we estimate.
Cities are the next largest, with value of up to $1.7 trillion per year, followed by human, with potential value of as much as $1.6 trillion per year. The smallest setting, in terms of potential value, is offices, which could generate benefits worth up to $150 billion per year.
In the following pages, we have organized the settings starting with human and places where people live, shop, and work. Finally, we look at three outdoor and mobile environments—including cities—where Iota applications have potential for significant value creation.