Last week we looked at how the Internet of Things (IoT) is poised to change the world, and how insurers can benefit from a new wave of technology that’s as revolutionary as the advent of electricity.
But although this all sounds great—who doesn’t want to see a 1.0 percent boost to real global GDP?—these fabulous projections are nothing but blue sky unless companies are ready to take full advantage of the opportunity, and governments are putting the right conditions in place to facilitate progress and capture benefits.
Our research findings indicate this isn’t the case. There is a real disconnect between what companies expect from the IoT revolution and whether they’re prepared to deliver on that promise.
When Accenture surveyed more than 1,400 C-suite decision makers from some of the world’s largest companies, 84 percent said they believe their organizations could create new, service-based income streams from the IoT—but 73 percent admitted that their companies have yet to make any concrete progress. Just 7 percent said they had developed a comprehensive strategy with investments to match.
And yet more disconnect: while 96 percent of these CEOs and executives said that their organization’s senior leadership grasp at least something of the nature of the IoT, only 38 percent said they completely understand it.
Even these estimates seem excessively optimistic. Accenture and the Industrial Internet Consortium (IIC) recently conducted a World Economic Forum Industrial Internet Impact Survey among more than 90 market leaders who are actively pursuing IoT initiatives. Even among these trailblazers, 88 percent said they still do not fully understand the underlying business models and long-term implications of the IoT.
And the best-laid plans of the most ambitious CEO can’t succeed if a country’s infrastructure can’t support it. A similar disconnect between expectation and deliverability exists at the government level, where there are huge discrepancies in IoT preparation between countries—and no country is completely prepared for the IoT revolution.
Accenture considers four measures of a country’s enabling factors: reliable banking and finance, education, good governance, and a healthy network of suppliers. Using 55 specific indicators, we term these enabling factors a country’s “national absorptive capacity” (NAC). A country with an NAC score of 100 would be a top performer, and most ready to take full advantage of the IoT. As the graph above illustrates, no country today can boast that distinction.
To accelerate the IoT, countries require “hard” capabilities, such as digital infrastructure, and “soft” technology skills and upskilling programs that depend on investment—in industries, data and people.
For their part, businesses must identify the deficiencies in education, capital, technology and institutional frameworks, and ensure that policy action focuses on a balance of factors that can amplify existing competitive advantages.
From these findings, the message is clear: When it comes to preparing for the IoT revolution, we all have work to do.
Next time I’ll take a look at how specific companies are getting ahead of the curve on adopting IoT.
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