The Internet of Things (IoT) has the potential to unlock up to 11 per cent in incremental GDP driving economic growth in the GCC region, according to A. T. Kearney’s latest report, ‘IoT in the GCC: Building a Brighter, More Sustainable Future’.
By 2025, the IoT solutions market in the region will be worth $11 billion, generating potential value for the economy of nearly $160bn; implying that every dollar spent on IoT solutions could produce nearly $14.50 in economic value.
According to the report, the region’s governments have been increasingly investing in next-generation technologies such as IoT, in an effort to move their economies away from heavy reliance on oil. IoT, an exponentially growing ecosystem of connected devices and systems, offers a major avenue for innovation and economic growth, and has the potential to address many of the region’s challenges.
“Next-generation technologies such as IoT are creating massive opportunities for economic transformation in the region, and could lead to an industrial revolution in its own right, referred to globally as the 4th Industrial Revolution. As governments in the region remain resolute about creating a clear digital roadmap and focus on diversifying their oil-dependent economies, we will continue to see an increasing scope for IoT and digital adoption that will create a surge of economic value from unlocking new revenue streams” said Adel Belcaid, Principal at A.T. Kearney Middle East.
“The private sector is also tapping into IoT-based opportunities to maximize business efficiencies. A good example is the regional telecommunications industry with key players such as STC, Du and Etisalat already building machine-to-machine/IoT capabilities and partnerships to offer new solutions to clients.”
The report states that the surge in economic value comes from three main sources including:
Productivity gains ($77bn)
When companies can better analyze real-time and historical data and remotely control more objects, they can make better, more informed decisions. They are also able to act faster at a lower cost to optimize and automate objects.
Time economies ($47bn)
Connected objects will reduce the time required for daily activities for both consumers and companies, such as commuting and machinery downtime. Combined with productivity gains, this will create more free time that can be spent on more productive tasks.
Purchasing power ($35bn)
IoT solutions will help people spend less on their day-to-day lives, thereby increasing their purchasing power and enabling them to spend on other objects that can improve their quality of life.
“The GCC has several characteristics that can speed up the growth of IoT, including broadband penetration, coverage to remote areas, and a young, tech-savvy population that is ready for a revolution in digital services and connectivity. Governments will play a larger role in enabling the IoT to drive smart cities (which is on the National Agenda of most GCC nations) and can stimulate adoption on both demand and supply by addressing factors to ensure consumer adoption is swift and broad,” said Belcaid
Addressing the radio spectrum challenge, establishing mechanisms for data security, ensuring infrastructure can meet consumer demands and promoting innovation incubators and start-ups are just some of the measures that will be especially relevant in harnessing the potential of IoT in the region,” he added.