Internet of Things Industry

Future Trends

An industry trend refers to the direction in which a specific sector or market is evolving over time. These trends can manifest in forms, such as tech advancements, shifts in customer behaviour, regulatory change, or socio-economic transformations.

Industry trends can drastically impact the dynamics within a sector, altering competitive landscapes and operational processes. They can drive innovation, influence business strategies, create opportunities for growth, but can also pose potential risks and challenges.

We have identified trends likely to impact the industry vertical over the next decade:

1. Increasing IoT Security Concerns: The Internet of Things is becoming increasingly integrated into our lives as more and more devices become connected to the internet. This increased connectivity has made it easier for attackers to gain access to these devices and potentially exploit them for malicious purposes. As a result, security concerns are becoming a major issue for IoT device manufacturers and users. Companies are beginning to recognise the need for better security protocols and are investing heavily in developing and implementing secure authentication protocols, encryption technologies, and other measures to ensure the safety of their products. As the IoT industry continues to grow, security concerns will become even more critical as the level of connectedness increases.

2. Growing Use of Artificial Intelligence (AI): The use of Artificial Intelligence (AI) is becoming increasingly popular as the technology continues to improve and become more widely available. AI can be used to make decisions and process data in a much faster and more efficient manner than humans. This makes it ideal for use in IoT devices, as it can help them make decisions and process input more quickly and accurately. AI will become increasingly important in the IoT industry as it will help to optimise device performance and reduce the amount of manual labour required to manage them.

3. Increasing Demand for Low-Power Devices: The demand for low-power devices is growing rapidly as people become more conscious of their energy consumption. Low-power devices require less energy to operate and are more efficient than traditional devices. This makes them ideal for use in IoT devices, as they can help reduce energy costs and extend battery life. As the demand for low-power devices continues to grow, manufacturers will need to focus on developing devices that can meet these needs.

4. Growing Data Privacy Concerns: As more data is collected and stored by IoT devices, data privacy concerns are becoming increasingly important. People are becoming more aware of their data and how companies can use it. This has led to a surge in demand for devices that offer better data protection, such as encryption technologies and other measures. Companies will need to focus on developing and implementing secure data handling protocols to ensure that user data remains safe and secure.

5. Increasing Demand for Connected Devices: As connectivity becomes more prevalent, the demand for connected devices is growing. The ability to connect devices to the internet and other devices makes it easier for users to access data and interact with their environment. This makes it easier for companies to offer services and products that are tailored to the needs of their customers. As the demand for connected devices continues to grow, companies will need to focus on developing devices that can meet these needs.

6. Growing Use of Cloud Computing: Cloud computing is becoming increasingly popular as it allows companies to store and access data remotely. This makes it ideal for use in the IoT industry, as it allows users to access data from anywhere in the world. As more companies begin to adopt cloud computing, the demand for devices that are compatible with the technology will continue to grow. Companies will need to focus on developing devices that can take advantage of the cloud in order to stay competitive.

Industry Size

The Internet of Things is a rapidly-growing industry with a global market size that is expected to reach $1.6 trillion by 2025. IoT refers to the interconnectedness of physical devices, such as smartphones, home appliances, vehicles, and other objects, to the internet.

IoT has been making a rapid impact on the global economy. In 2018, the global IoT market size was estimated to be worth $739 billion and the number of connected “things” was estimated to be around 8.4 billion. This number is expected to grow to more than 75 billion by 2025, with a compound annual growth rate of 24.1%.

The majority of the growth in the market is being driven by the increasing demand for connected devices, as well as the development of new applications that enable the use of IoT technology. Businesses across all industries are utilising IoT to increase their operational efficiency, reduce costs, and gain a competitive edge.

The major components of the IoT market are hardware, software, and services. Hardware is the largest component, accounting for 42% of the total market size in 2018. It includes sensors, microcontrollers, and other computing devices. Software makes up 37% of the total market size and includes communication protocols, middleware, operating systems, and application development platforms. Services make up the remaining 21%, and include system integration, consulting, and maintenance services.

The global IoT market is highly competitive, with the top 10 players accounting for more than one-third of the total market share. Major players include Microsoft, IBM, Intel, Cisco, and Google.

Supply Chain

An industry supply chain is a network of suppliers, manufacturers, distributors, retailers, and customers that creates and delivers a product. It includes sourcing, production, packaging, storage, transportation, and delivery, with each step adding value. A streamlined supply chain is essential for competitiveness, affecting cost, speed, availability, and customer satisfaction.

The Internet of Things is a rapidly expanding industry that is transforming the way we live and interact with the world around us. It involves the integration of physical objects with the digital world, allowing them to communicate with each other and exchange data. This data can then be used for a variety of purposes, including monitoring, controlling, and improving processes. As a result, the IoT industry is highly reliant on a sophisticated supply chain that enables the efficient delivery of products and services.

The IoT supply chain consists of several interconnected stages. It begins with the manufacturers of IoT devices, such as sensors, controllers, and actuators. These components are then integrated into an IoT system or application and delivered to the end user. In order for this to happen, there are several additional stages in the supply chain, such as product design, manufacturing, distribution, and installation.

At the product design stage, the manufacturer must determine the specifications of the device, including its size, shape, and features. This stage also involves the selection of components and the development of algorithms to process data. These algorithms are then coded into the device’s firmware. Once this stage is complete, the product is ready for manufacturing.

During the manufacturing process, the components are assembled and tested to ensure that they meet the product’s specifications. This stage also involves the installation of firmware and the integration of the device into a system or application. Once the product is ready, it is packaged and shipped to the end user.

The distribution stage of the supply chain involves the delivery of the product from the manufacturer to the end user. This stage involves several steps, such as order fulfillment, shipping, and tracking. In order to ensure that the product reaches the customer in a timely manner, the distribution process must be managed efficiently.

Finally, once the product has been delivered to the customer, the installation stage begins. During this stage, the device is installed and tested to ensure that it is functioning properly. This process can involve the customer or a professional technician. Once the installation is complete, the customer can begin using the device.

The IoT supply chain is an essential part of the industry, as it ensures that products and services are delivered to customers in a timely and efficient manner. By understanding the different stages of the supply chain, manufacturers can ensure that their products reach the customer in the best possible condition.

Industry Ecosystem

An industry ecosystem is a network of interconnected organisations, suppliers, distributors, customers, competitors, and regulators, that create and deliver a product.

Entities collaborate and compete to meet customer needs and drive innovation, impacting a business’s competitiveness and profitability. The ecosystem also includes support businesses like marketing agencies and freight carriers. Understanding it helps identify market strengths, weaknesses, opportunities, and threats.

The Internet of Things industry ecosystem is a rapidly growing network of interconnected devices and services that enable the collection, analysis, and sharing of data between them. This ecosystem is made up of a wide range of stakeholders, including suppliers, distributors, customers, regulatory agencies, and other stakeholders.

Suppliers are the primary source of the components and services that make up the IoT industry ecosystem. They provide hardware, software, and other components necessary for the development and deployment of IoT products and services. Examples of suppliers in the IoT industry include chip manufacturers, such as Intel and Qualcomm; software companies, such as Microsoft and Oracle; and device companies, such as Apple and Samsung.

Distributors are responsible for making the products and services of suppliers available to customers. They include retailers, such as Amazon and Walmart, as well as telecoms and other service providers, such as AT&T and Verizon. Distributors also provide services such as installation, maintenance, and support for IoT devices.

Customers are the end users of the products and services provided by the IoT industry. They are the people who purchase IoT devices, such as fitness trackers and security cameras, and use the services provided by the ecosystem, such as streaming music and video.

Regulatory agencies are responsible for setting and enforcing laws and regulations related to the IoT industry. These agencies, such as the Federal Trade Commission (FTC) and the European Union (EU), ensure that IoT products are safe for consumers and that companies are adhering to data privacy and security requirements.

Other stakeholders in the IoT industry include technology companies, such as Google and IBM; industry associations, such as the Internet of Things Council and the Industrial Internet Consortium; and venture capitalists, who provide funding for IoT start-ups.

The Internet of Things industry is an ever-evolving ecosystem of products, services, and stakeholders. Its success depends on the collaboration of its many participants, from suppliers and distributors to customers and regulatory agencies. By working together, they will ensure that this rapidly growing industry continues to benefit both consumers and businesses in the years to come.

Key Performance Indicators

Key Performance Indicators are important to any business operating in the sector as they help measure progress towards achieving organisational goals and objectives. The KPI’s reflect strategic performance goals, offering crucial insights on operational efficiency, marketing metrics, sales revenue, customer satisfaction, and overall business performance within the industry.

Below is a list of KPI’s we have identified as being relevant to this vertical:

• Number of Connected Devices: This KPI measures the total number of connected devices in your network. It is usually expressed as a percentage of total devices or as an absolute number. The formula to calculate the number of connected devices is: Number of Connected Devices = (Total number of connected devices / Total number of devices) x 100.
• Average Uptime: This KPI measures the average amount of time a device is connected to the network. It is usually expressed as a percentage of the total time a device is connected. The formula to calculate average uptime is: Average Uptime = (Total number of connected hours / Total number of hours) x 100.
• Data Throughput: This KPI measures the amount of data that can be transmitted between devices. It is usually expressed as a rate in Mbps or Kbps. The formula to calculate data throughput is: Data Throughput = (Total amount of data transmitted / Total amount of time) x 1000.
• Network Latency: This KPI measures the time it takes for a device to receive a response from the network. It is usually expressed as a rate in milliseconds. The formula to calculate network latency is: Network Latency = (Total amount of time taken to receive a response / Total number of requests) x 1000.
• Number of Transactions: This KPI measures the total number of transactions that occur in the network. It is usually expressed as a rate in transactions per second. The formula to calculate the number of transactions is: Number of Transactions = (Total number of transactions / Total amount of time) x 1000.
• User Engagement: This KPI measures the amount of user engagement with the network. It is usually expressed as a percentage of total users or as an absolute number. The formula to calculate user engagement is: User Engagement = (Total number of users / Total number of transactions) x 100.
• Average Response Time: This KPI measures the average amount of time it takes for a device to receive a response from the network. It is usually expressed as a rate in milliseconds. The formula to calculate average response time is: Average Response Time = (Total amount of time taken to receive a response / Total number of requests) x 1000.
• Average Session Duration: This KPI measures the average amount of time a user spends connected to the network. It is usually expressed as a rate in seconds. The formula to calculate average session duration is: Average Session Duration = (Total amount of time spent connected / Total number of users) x 1000.
• Revenues per User: This KPI measures the amount of revenue generated per user. It is usually expressed as a rate in dollars per user. The formula to calculate revenues per user is: Revenues per User = (Total amount of revenue / Total number of users) x 1000.
• Cost per Acquisition: This KPI measures the cost of acquiring new users. It is usually expressed as a rate in dollars per user. The formula to calculate cost per acquisition is: Cost per Acquisition = (Total amount of cost / Total number of users) x 1000.
• Retention Rate: This KPI measures the percentage of users that remain active in the network over a certain period of time. It is usually expressed as a percentage of total users. The formula to calculate retention rate is: Retention Rate = (Total number of active users / Total number of users) x 100.
• Customer Lifetime Value: This KPI measures the total amount of revenue generated by a single user over their lifetime. It is usually expressed as a rate in dollars per user. The formula to calculate customer lifetime value is: Customer Lifetime Value = (Total amount of revenue generated / Total number of users) x 1000.
• Cost per Transaction: This KPI measures the cost of processing a single transaction. It is usually expressed as a rate in dollars per transaction. The formula to calculate cost per transaction is: Cost per Transaction = (Total amount of cost / Total number of transactions) x 1000.
• Return on Investment: This KPI measures the return generated on a certain investment. It is usually expressed as a percentage of total investment. The formula to calculate return on investment is: Return on Investment = (Total amount of return / Total amount of investment) x 100.
• Average Order Value: This KPI measures the average amount of money spent in a single transaction. It is usually expressed as a rate in dollars per transaction. The formula to calculate average order value is: Average Order Value = (Total amount of money spent / Total number of transactions) x 1000.

Porter’s Five Forces

Created by Harvard Business School Professor Michael Porter in 1979, Porter’s Five Forces model is designed to help analyse the particular attractiveness of an industry; evaluate investment options; and better assess the competitive environment.

The five forces are as follows:

• Competitive rivalry: This measures the intensity of competition within the industry.
• Supplier power: It assesses the ability of suppliers to drive up the prices of your inputs.
• Buyer power: This examines the strength of your customers to drive down your prices.
• Threat of substitution: It evaluates the likelihood that your customers will find a different way of doing what you do.
• Threat of new entries: This considers the ease with which new competitors can enter the market.

Through this analysis, businesses can identify their strengths, weaknesses, and potential threats, thus enhancing their competitive strategies and securing their market positioning.

Intensity of Industry Rivalry

The intensity of rivalry in the Internet of Things industry is high due to the presence of a large number of competitors, all of which are vying for market share and customers. The IoT industry is highly competitive, with a wide range of vendors offering products and services at different price points.

Companies in the industry are continuously innovating and investing in research and development in order to stay ahead of the competition. Companies are also investing in marketing and advertising in order to reach new customers and gain market share. Additionally, companies are competing on price, with some offering discounts and promotional offers in order to attract customers. As such, the intensity of rivalry in the IoT industry is high.

Threat of Potential Entrants

The threat of potential entrants in the IoT industry is low. The market is highly saturated with established players, making it difficult for new entrants to gain a foothold. Additionally, the IoT industry is highly complex and requires significant investments in research and development, marketing, and advertising in order to be successful. New entrants also face the challenge of competing with established players that have already established their brand and customer base. What’s more, the IoT industry is dominated by a few large players that have significant market share and resources, making it difficult for new entrants to gain a foothold. As such, the threat of potential entrants in the IoT industry is low.

Bargaining Power of Suppliers

The bargaining power of suppliers in the IoT industry is low. The industry is highly competitive and has a wide range of vendors offering products and services at different price points. As such, suppliers have limited leverage when it comes to negotiating prices. Additionally, suppliers are dependent on the demand for their products and services, and as such have limited bargaining power. What’s more, the IoT industry is dominated by a few large players that have significant market share, meaning that suppliers are unable to negotiate better prices or terms. As such, the bargaining power of suppliers in the IoT industry is low.

Bargaining Power of Buyers

The bargaining power of buyers in the IoT industry is high. The industry is highly competitive and has a wide range of vendors offering products and services at different price points. This gives buyers the ability to shop around and compare prices in order to get the best deal. Additionally, buyers have the ability to switch vendors if they are unhappy with the quality or service they receive. What’s more, buyers are becoming increasingly tech-savvy and are demanding more features and better service, giving them more leverage when it comes to negotiations. As such, the bargaining power of buyers in the IoT industry is high.

Threat of Substitutes

The threat of substitutes in the IoT industry is low. IoT solutions are highly specialised and tailored to specific customer needs, making it difficult for substitutes to compete. Additionally, the technology is continuously evolving, making it difficult for substitutes to keep up with the latest trends and developments. What’s more, the cost of developing and deploying IoT solutions is high, making it difficult for substitutes to enter the market. As such, the threat of substitutes in the IoT industry is low.

PEST Analysis

A PEST analysis evaluates key external factors affecting an organisation:

• Political: Government policies, regulations, and political stability
• Economic: Economic conditions like inflation, interest rates, and growth
• Social: Societal trends, demographics, and consumer attitudes
• Technological: Technological innovation impacting operations and consumer expectations

Reasons to use a PEST analysis:

• Environmental Scanning: Assesses external factors shaping the business
• Strategic Planning: Identifies opportunities, threats, and aligns strategies
• Risk Assessment: Highlights risks for proactive mitigation
• Market Analysis: Provides insights into trends, behavior, and gaps
• Business Adaptation: Helps adapt to changes in preferences, regulations, and technology

Below is the PEST analysis for this vertical:

Political

The political environment of the Internet of Things industry is constantly evolving as governments around the world react to the rapid development of technology. Governments are introducing new regulations to ensure the safety of citizens and their data. This includes regulations on data privacy, data security, and network security. What’s more, governments are actively promoting the development of the IoT by providing incentives for the development of new technologies and applications.

The European Union has been particularly active in this area, introducing the General Data Protection Regulation (GDPR) which aims to protect the personal data of its citizens. This regulation has had a significant impact on the IoT industry, as companies must now ensure that their products and services comply with the GDPR or risk hefty fines.

In the US, the Federal Trade Commission (FTC) has issued guidance on the data security of IoT devices. This guidance applies to all companies that develop and market connected devices, and requires them to take steps to ensure the security of their network and data.

Economic

The economic environment of the Internet of Things industry is characterised by rapid growth. With the increasing adoption of connected devices, businesses are reaping the benefits of improved operational efficiency and cost savings. In the manufacturing sector, IoT technologies are allowing companies to optimise production processes and reduce costs. In the healthcare sector, IoT technologies are providing real-time access to patient data, enabling more efficient diagnoses and treatments.

The number of IoT devices in use is expected to reach 75 billion by 2025, which is a significant increase from the current number of 15 billion. This growth is driven by the increasing availability of IoT technologies and the increasing demand for connected devices. As a result, the IoT industry is expected to grow significantly in the coming years, creating new opportunities for businesses to capitalise on.

Social

The social environment of the Internet of Things industry is changing as more people become aware of the potential benefits of connected devices. As people become more aware of the potential benefits of the IoT, they are becoming increasingly interested in using connected devices in their daily lives. This includes the use of smart home devices, wearable devices, and connected cars.

The increasing use of connected devices has also raised concerns about data privacy and security. As people become more aware of the potential risks posed by the IoT, they are demanding more transparency and accountability from companies that develop and market connected devices. Companies must now take steps to ensure that their products are secure and that user data is protected.

Technological

The technological environment of the Internet of Things industry is constantly evolving as new technologies are developed and adopted. The most important technologies in the IoT industry are wireless communication technologies such as WiFi, Bluetooth, and Zigbee. These technologies allow connected devices to communicate with each other and with the Internet.

The IoT industry is also utilising Artificial Intelligence (AI) and Machine Learning (ML) technologies to improve the accuracy and efficiency of connected devices. AI and ML technologies allow devices to learn from their environment and to make decisions based on data collected from their surroundings.

Finally, 5G technology is expected to revolutionise the IoT industry. 5G technology will provide faster connection speeds and more reliable connections, enabling more devices to be connected. This will make possible a wide range of new applications and use cases for connected devices.

Regulatory Agencies

Government and regulatory agencies shape the business ecosystem by enforcing laws that govern industries, trade, and business practices. Their influence ensures a fair and competitive market.

Below is a list of key agencies relevant to the sector:

• Federal Communications Commission (FCC)
• National Institute of Standards and Technology (NIST)
• National Telecommunications and Information Administration (NTIA)
• European Commission (EC)
• Food and Drug Administration (FDA)
• Consumer Product Safety Commission (CPSC)
• Department of Transportation (DOT)
• Federal Trade Commission (FTC)
• Environmental Protection Agency (EPA)
• National Highway Traffic Safety Administration (NHTSA)

Industry Innovation

Innovation drives industry growth by creating new ideas, improving efficiency, and developing advanced products. It fosters adaptability and competitiveness, crucial for meeting market demands.

Without innovation, industries risk stagnation and decline.

This study divides innovations into:

• Current: Ongoing innovations
• Potential: Future-focused innovations

The Internet of Things industry has been rapidly evolving in recent years, with new innovations continuously being introduced. From smart home devices to industrial sensors, the potential for IoT is vast and has the potential to revolutionise the way we live and work.

Current Innovations

The current innovations within the IoT industry can be categorized into three main areas: connectivity, data analytics, and applications.

Connectivity is the foundation of the IoT industry, as it allows devices to communicate with each other and share data. The development of low-power, wide-area networks (LPWANs) such as LoRaWAN and Sigfox has enabled long-range and low-cost connectivity for IoT devices. This has opened up opportunities for applications in areas such as asset tracking, smart city management, and environmental monitoring.

Data analytics is another key area of innovation within the IoT industry. With the increasing volume of data being generated by IoT devices, there is a need for advanced analytics tools to make sense of this data. Machine learning and artificial intelligence have been utilised to analyse and make predictions based on the data collected from IoT devices. This has led to the development of applications such as predictive maintenance and anomaly detection, which can help businesses save costs and improve efficiency.

The third area of innovation in the IoT industry is applications. From smart home devices to wearables, there has been a proliferation of IoT applications in various industries. These applications have made our lives easier and more convenient, from controlling our home appliances remotely to tracking our fitness goals. In the industrial sector, IoT applications have been used for asset tracking, supply chain management, and energy management, leading to cost savings and improved productivity.

Potential Innovations

While the current innovations in the IoT industry have already made a significant impact, there is still much potential for future innovations. Some of the potential innovations in the IoT industry include edge computing, blockchain, and 5G.

Edge computing is a distributed computing model that brings data processing closer to the source of the data, rather than relying on a central data center. This reduces latency and bandwidth usage, making it ideal for real-time applications such as autonomous vehicles and smart grids. With the increasing number of connected devices and the need for real-time data analysis, edge computing has the potential to revolutionise the way we process and use data in the IoT industry.

Blockchain technology has gained attention in recent years due to its potential to provide secure and transparent data transactions. In the IoT industry, blockchain can be used to secure data generated by IoT devices, ensuring that it is tamper-proof and can be trusted by all parties. This could be particularly useful in applications such as supply chain management, where the authenticity of data is crucial. What’s more, blockchain can also enable the creation of decentralised IoT networks, eliminating the need for a central authority to manage and control the devices.

The deployment of 5G networks is another potential innovation that could have a significant impact on the IoT industry. With its high-speed and low latency capabilities, 5G can support a massive number of connected devices, making it ideal for applications that require real-time communication and data processing. This could pave the way for new and more advanced IoT applications, such as remote surgery and smart factories, where high-speed and reliable connectivity is crucial.

Challenges and Considerations

While the potential for innovation within the IoT industry is vast, there are also challenges and considerations that must be addressed. One of the significant challenges is the issue of data security and privacy. With the increasing number of connected devices, there is a higher risk of data breaches and cyber attacks. Therefore, it is crucial for businesses and organisations to prioritise data security and implement robust security measures to protect sensitive data.

Another consideration is the interoperability of IoT devices and systems. As the number of IoT devices and applications continue to grow, there is a need for standardisation and compatibility between different devices and systems. This will enable seamless communication and data sharing, leading to more efficient and effective use of IoT technology.

Potential for Disruption

Disruption occurs when new technologies, processes, or ideas challenge market norms and shift industry value.

Key disruptors include:

• Technological Innovations: AI and automation change sectors like manufacturing and customer service
• Consumer Behavior: Shifts in preferences, like health trends, impact industries such as food
• Regulatory Changes: New policies, like GDPR, affect industries such as tech
• Social Changes: Growing sustainability concerns reshape industries like fashion
• Economic Shifts: Economic factors, such as financial crises, force industry adaptations
• New Entrants: Companies like Uber and Airbnb disrupt established industries
• Global Events: Pandemics and disasters, like COVID-19, disrupt sectors like travel
• Supply Chain Issues: Shortages, like the chip crisis, affect industries like automotive

The Internet of Things industry is rapidly advancing, bringing with it a wide range of opportunities for disruption. This disruption is driven by a number of factors, including the increased availability of Internet-connected devices, the growing number of applications that can be used with these devices, and the ever-evolving nature of the industry. This potential for disruption has the potential to drastically change the way we think about IoT and its applications, creating an entirely new ecosystem and economy.

The most significant potential for disruption within the IoT industry lies in the ability to connect a variety of devices to the Internet and to each other. This connection allows for the creation of large networks of devices, which can be used to automate a variety of tasks and activities. This automation has the potential to reduce costs, increase efficiency, and create new opportunities for businesses and individuals. For example, connected devices can be used to monitor and control energy systems, create smart homes, and facilitate communication between devices. This has the potential to create a new economy of connected devices, which could revolutionise the way we interact with our environment.

Another area of potential disruption is the development of new applications and services that can be used with IoT devices. This could include new software that can be used to manage and control devices, or even entirely new services that leverage the power of the Internet of Things. This new software and services could have the potential to create entirely new markets and opportunities for businesses and individuals alike.

Finally, the potential for disruption in the IoT industry is also being driven by the ever-evolving nature of the industry. As new technologies and services are developed, new opportunities for disruption are created. This could include the development of entirely new markets, or the disruption of existing markets by introducing new products and services. This could potentially revolutionise the way we think about the IoT industry, and create entirely new ecosystems and economies.

ESG

ESG criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments.

• Environmental: Environmental standards consider a company’s stewardship of nature
• Social: Social criteria examine how a company manages relationships with employees, suppliers, customers, and communities
• Governance: Governance deals with leadership, executive pay, audits, internal controls, and shareholder rights

Companies and industry sectors with strong ESG practices may enjoy enhanced reputation, more investment and better long-term performance.

The Internet of Things is a rapidly growing industry that is transforming the way we live and work. This technological revolution is driven by the interconnectedness of devices and the vast amounts of data they generate. As this industry continues to expand, businesses are becoming increasingly aware of the impact their operations have on the environment, society, and corporate governance. This is where Environmental, Social, and Governance (ESG) factors come into play, and their influence on the IoT industry is becoming more significant.

Environmental factors are a critical aspect of the IoT industry. As the number of connected devices and data centers continue to grow, so does the energy consumption and carbon footprint of the industry. This has led to a focus on sustainability and energy efficiency, leading to the development of more energy-efficient devices and the adoption of renewable energy sources. Companies that prioritise environmental sustainability not only reduce their impact on the environment but also save on operational costs, making them more competitive in the market.

Social factors are also playing a significant role in shaping the IoT industry. The interconnectedness of devices has raised concerns about data privacy and security. With the increasing number of cyber-attacks and data breaches, consumers are becoming more cautious about sharing their personal information. This has led to stricter regulations and standards for data protection and privacy, forcing IoT companies to invest in secure and ethical data handling practices. What’s more, social responsibility has become a crucial factor for consumers when choosing products and services, and companies that demonstrate a commitment to social causes are more likely to gain consumer trust and loyalty.

Governance is another significant aspect of ESG that is impacting the IoT industry. As the industry grows, companies are facing increased scrutiny from stakeholders, including investors, customers, and regulators. This has led to a greater emphasis on transparency and accountability in business operations, with a focus on corporate governance practices. Companies that demonstrate strong governance practices are more likely to attract investment and build a positive reputation in the market, leading to long-term success.

Increasing Sustainability

Increasing sustainability within any industry vertical has the following key benefits:

• Mitigates environmental impact
• Conserves resources for future generations
• Responds to consumer demand for ethical practices

Increased sustainability enables businesses to remain competitive in a market that increasingly values corporate responsibility, while driving innovation, reducing costs, and ensuring compliance with evolving regulations, thus supporting long-term profitability.

The Internet of Things industry has seen tremendous growth in recent years, with billions of connected devices and sensors being deployed across various industries. This interconnected network of devices has the potential to create significant opportunities for sustainability, making it a key focus for businesses and organisations.

One of the main opportunities for sustainability in the IoT industry is the ability to improve resource efficiency. Connected devices and sensors can collect real-time data on resource consumption, such as energy, water, and materials, allowing businesses to identify areas of inefficiency and make necessary changes. This can lead to significant cost savings and reduce the environmental impact of operations.

In addition, IoT technologies can help businesses reduce their carbon footprint. By using sensors and data analytics, companies can optimise their supply chain, transportation, and logistics operations, resulting in fewer emissions and a more sustainable business model. For example, smart logistics systems can track the location and condition of products, reducing spoilage and waste in the supply chain.

IoT also presents opportunities for sustainable energy management. With the rise of renewable energy sources, connected devices can help monitor and manage energy production and consumption in real-time. This can lead to more efficient energy use and a reduction in greenhouse gas emissions. Additionally, IoT-enabled smart home devices can help consumers manage their energy consumption, leading to more sustainable and cost-effective energy use.

The use of IoT in agriculture also presents opportunities for sustainability. By connecting sensors to soil, plants, and weather conditions, farmers can optimise irrigation and fertilization, reducing the use of resources and chemicals. This can lead to more sustainable farming practices and reduce the environmental impact of agriculture.

What’s more, the data collected by IoT devices can also help businesses make informed decisions about sustainability. By analysing real-time data, companies can identify areas for improvement and develop more sustainable strategies. This can lead to increased transparency and accountability in business operations, promoting sustainability within the industry.

Sentiment Analysis

Sentiment analysis is crucial in the analysis of an industry, because it helps professionals understand emotions around the sector; and not merely an individual business.

We have crawled social media posts and thousands of news articles relating to this industry over the past two years. The cut-off date for articles in this crawl was 13th November 2024, with updates planned every quarter.

Once crawled, each content item is indexed and then processed for contextual analysis, with positive indicators such as ‘excellent’, ‘satisfied’, and ‘happy’; along with neutral and negative indicators flagged as important for the evaluation of industry sentiment.

The final score equates to the calculated average across all content items.

Scoring

The scoring is defined as follows:

• Positive: (1)
• Somewhat Positive: (2)
• Neutral: (3)
• Somewhat Negative: (4)
• Negative: (5)

Key Findings

As part of this sentiment analysis, we have concluded the following:

• Positive sentiment towards IoT is driven by its potential to improve efficiency and convenience in daily life.
• The increasing adoption of IoT devices in various industries shows promise for future growth.
• However, concerns about data security and privacy pose a potential challenge.
• Some are also sceptical about the true value and necessity of IoT in certain areas.
• Sentiment on IoT is a mix of excitement and hesitation, with potential for both positive and negative impact.

Sentiment Score: 3

Further Reading

• Market dynamics for Internet of Things industry
• Risk analysis for the IoT industry