There are, even by the most conservative estimates, billions of objects and devices connected to the Internet. Various estimates place the total number of connected devices between 40 to 50 billion by 2020; and these devices together make up the Internet of Things (IoT).
Companies across a multitude of industries are pioneering this technology and demonstrating its long-term potential. According to one forecast, spending on industrial connected objects this year alone will total nearly $870 billion, compared with $546 billion for IoT devices on the consumer side.
The improvements in efficiency, analytics, predictive maintenance, troubleshooting and forecasting that have resulted, even in this early stage of IoT implementation, consistently point toward an economy that is more efficient, productive, safe and profitable.
In our latest report, "IoT Case Studies: Companies Leading the Connected Economy", AIG found that the companies leading the industrial IoT revolution mostly fall into one of two categories of innovation:
- Improving Operations and Processes
Companies such as Silverstein Properties and U.S. Bank use IoT technologies to improve their internal operations and processes, while companies such as Amec Foster Wheeler, IBM, Human Condition Safety and Ericsson are using it to provide their customers with deeper insights into their operations, their industries and the world around them.
- Using IoT to Transform Business Models
John Deere is fostering collaboration across the agriculture industry with IoT innovations that impact every aspect of farming from seed to market.
Both categories can provide valuable insight into the challenges and potential of the IoT, which is why it’s so critical that companies and leaders emphasize communication, both within their own companies and with each other. Departments that typically don’t interact with each other will need to collaborate to mitigate new IoT risks. Most notably, risk managers and research and development departments must work together to address potential risks created by new connected products and services. Closer collaboration between different functions within an organization will help risk managers select insurance products and services that best suit the new risks brought forth by IoT technologies.
Ultimately, two things are clear: IoT technologies are here to stay, and its economic impact will be significant.
While it’s impossible to predict all of the details, we know the shape the future of industrial innovation will take. Companies that embrace innovative technologies, including IoT, are already changing the world we live in. With a commitment to innovation and an openness to disrupt themselves, these few will be best positioned to lead their industries, and may even create new markets.
To learn more read “IoT Case Studies: Companies Leading the Connected Economy”, or visit www.aig.com/innovative-tech.