6 Reasons Why We’re Underhyping the Internet of Things

by  Dominic Basulto,  The Washington Post

The potential economic value of the Internet of Things (IoT) is being vastly underestimated, and it could be worth more than $11 trillion a year, according to a new report from the McKinsey Global Institute.

The Institute cites six reasons why the IoT is being underhyped, including the dramatic underuse of the data generated by sensors and other networked devices, mainly for simple tasks. Moreover, McKinsey says analysts are overlooking bigger-picture economic insights by focusing solely on verticals and industries, while the primary concentration on the IoT’s business-to-consumer market opportunity is missing a potentially far larger business-to-business opportunity.

In addition, with about 40 percent of the IoT’s economic worth fueled by device interoperability, the revenue opportunity becomes obvious. McKinsey also argues the IoT’s impact on the developing world’s economies is being underestimated, with such economies benefiting from about 40 percent of the economic gains versus the developed world’s approximately 60 percent share.

McKinsey speculates some developing countries will be able to overtake advancements in developed countries because the retrofitting of equipment or infrastructure with sensors and actuators will become a non-issue. Finally, the IoT will support new business models that likely correlate with how data is tracked and evaluated in real time, causing tech and non-tech companies’ boundaries to blur.

Obviously, it’s exciting news that the world is about to get an $11 trillion economic shot in the arm from hooking up every possible object to the Internet with sensors and actuators. At the very least, some companies are going to get awfully rich by selling sensors and RFID tags to everyone trying to cash in on the Internet of Things gold rush.

At the same time, though, isn’t there something very bleak about a future in which sensors are hooked up to every object, every setting is predictable and optimized, and pure data guides every decision rather than the human heart? Imagine a giant planned economy, overseen by a bunch of managers schooled in Frederick Winslow Taylor’s principles of scientific management, figuring out new ways to crunch the data of our daily lives. When it comes to the Internet of Things, be careful what you wish for.    Read the article