We live in an age where technological forces are increasingly playing a larger role in businesses. After the industrial age, it is perhaps the Internet that has revolutionized the business sector the most and the next step in this digital revolution is the age of the Internet of Things (IoT). We are already seeing its impact on the current day businesses and industries and this impact will only increase in the future.
So, today we will find out the impact of IoT on the economy and more particularly the impact of IoT on the future of business and see what the future holds for us in terms of digitization and how different it is from business practices today.
What is the Internet of Things?
The Internet of Things (IoT) refers to the network of physical devices, all interconnected through a series of sensors embedded in them and being run through software and other related technologies. The devices in this network are continuously exchanging data using the internet and this network is playing a crucial role in their functioning.
Devices in the Internet of Things can range anywhere from smart home appliances to machinery on an industrial level and IoT lets these connected devices communicate between themselves without the need for human intervention. Some of the biggest factors that have played a vital role in the development of IoT are the advancements in internet technology, wireless communication, and of course cloud computing.
IoT’s Role in the Age of Digital Transformation
The Internet of Things is playing a vital role in interconnecting the world which is already becoming more and more digital and this has led to systems becoming more efficient, customer service getting better and the rate of innovation increasing and following are the roles IoT is playing in it.
- Seamless Connectivity: This is the most basic and core function of IoT. To connect multiple devices, systems, and tools using software and to create a network where everything is operating in a synchronized environment. This is especially important in the manufacturing industry, as it greatly increases production efficiency.
- Data-Driven Insights: Another important role the IoT plays is gathering large amounts of data in real-time and this allows businesses to operate more effectively and efficiently and make better decisions. A common example is warehouses and retailers tracking their inventory and managing their supply chain using IoT.
- Enhanced Automation and AI: Next to IoT it is AI that will play the largest role in the future of business and when both are combined, they are the perfect tools to transform the world. Artificial intelligence has greatly boosted the efficiency of IoT and the automation process has sped up as a result and we are witnessing this in the form of driverless cars and smart cities.
Impact of IoT on the Economy
IoT is already making a profound impact on the economy and will only continue to do so in the future, with the industry leaders predicting that in the future trillions of dollars will be added to the global economy thanks to IoT. More importantly, we will see this impact in every sector of the economy and some of the most common examples are as follows.
- Productivity and Cost Savings: The Internet of Things is helping businesses monitor their systems in real-time to greatly improve their productivity, and this results in the reduction of cost to operate these businesses. A common example is farmers monitoring their soil and crop conditions to better optimize water usage.
- New Business Models and Services: IoT is not only helping existing businesses but it is also actively creating new business models, like subscription-based services. More and more companies are offering their products on a subscription-based business model instead of outright selling them and this reduces the cost for most customers and also creates a recurring revenue stream for businesses.
- Job Creation and Skill Development: We always fear that new technology will remove jobs, but we also forget that it also creates new jobs and this is the same case with IoT as it has created new jobs like the need for more skilled professionals in data collection and analysis, cyber security and sensor development and manufacturing.
- Addressing Economic Inequalities: As with any other technology the Internet of Things, also has good and bad effects, and where it plays a crucial role in building up regions that are economically strong, it is also leaving behind regions that are slow to adapt due to lacking infrastructure and this is something that needs to be addressed immediately.
Impact of IoT on the Future of Business
It is through its influence on individual businesses that IoT impacts the economy as a whole and to study the impact of IoT on the economy, we need to study its impact on businesses, particularly in the future, and see what kind of positive and negative changes it will bring and some of the important ones are as follows.
- Operational Efficiency and Smarter Systems: This has been discussed many times over but its importance cannot be overstated as the Internet of Things can greatly increase the operational efficiency of any business and it will only get better as we make more advancements in technology and fine-tune the whole process.
- Personalized Customer Experiences: It is not just the highly technical sector where IoT has an impact on businesses. It has and will increasingly more in the future impact how customer service is provided by businesses. It will make data collection more efficient and with it customer service much better.
- New Revenue Models: Where IoT will take away some jobs, it will create new ones as well; by creating new revenue models and one of the ways it is doing this is by empowering freelancers and remote workers. Now individual professionals can work remotely from the comfort of their home.
- Security and Privacy Concerns: As improvements in the Internet of Things are being made, one of the largest concerns remains and that is security and privacy. On the internet both cybersecurity and privacy and crucial issues and if cybersecurity does not keep pace with advancements in IoT, the whole system will be extremely vulnerable.
- Sustainability and Environmental Impact: One of the most positive roles IoT is playing and will play in the future is that it is making businesses more sustainable and improving the environment. It is doing so by optimizing our resource usage, reducing the waste we produce and monitory the negative impact businesses have on the environment.
