From automated factories to smart homes, the interconnectedness of devices is transforming industrial sectors and everyday aspects of our lives. However, despite the enthusiasm, IoT adoption remains uneven and poses serious challenges in terms of security, interoperability, and access, particularly in certain sectors and regions of the world.
Beyond the visible: the IoT revolution
By: Gabriel E. Levy B.
The expansion of IoT has been driven by the decrease in the cost of sensors, increased mobile adoption, and increased internet connectivity.
According to an OECD report, the number of IoT connections surpassed that of non-connected devices in 2022, with 11.7 billion devices such as cars, industrial equipment, and home devices connected to the network.
This trend continues, and it is estimated that by 2025 there will be about 59 billion connected devices worldwide.
The IoT promises extraordinary benefits. In agriculture, for example, sensors monitor crops and optimize the use of water and fertilizers.
In the manufacturing industry, connected automation is expected to reduce costs and improve efficiency.
But the IoT revolution doesn’t stop there: it’s impacting everything from smart city management to reducing pollution and decongestion on roads. The IoT’s ability to capture and analyze large amounts of data is at the heart of this transformation.
According to the World Economic Forum, the convergence of IoT with technologies such as artificial intelligence (AI) and machine learning has given rise to what is known as the “Artificial Intelligence of Things” (AIoT), which allows devices to not only record data, but also make intelligent decisions based on it.
IoT in numbers: lights and shadows
Despite the optimism, the numbers show that IoT adoption is far from uniform. In 2022, only 29% of European companies were using this technology, an increase of just 8 percentage points compared to the previous year.
In Canada, adoption was even lower, reaching 23% in 2022, while Korea was lagging 14%. The OECD report indicates that differences in survey designs limit comparability between countries, but the fact is undeniable: IoT remains a difficult technology for many companies, especially small ones.
The energy sector, utilities, and transportation are leaders in IoT adoption, while others, such as manufacturing, still face significant barriers.
In Germany and Brazil, some case studies have shown that the implementation of IoT in the manufacturing industry can improve competitiveness by reducing costs and optimizing processes.
In one particular case, a large company reported that the use of IoT data, combined with machine learning, reduced costs related to poor product quality by 70%.
However, the gap between large and small companies is considerable.
On average, the difference in IoT adoption between large and small companies in OECD countries was up to 20 percentage points in 2023.
This is a structural problem that affects the ability of smaller companies to compete in an increasingly digitized world. Experts point to a lack of resources, limited interoperability, and concerns about digital security as some of the barriers preventing wider adoption.
Smart devices and their impact on everyday life
In homes, the use of IoT devices varies greatly.
While smart TVs and connected speakers are well-received, with 56% of Europeans using some form of smart entertainment device in 2020, home appliances such as smart fridges have not found the same success, reaching only 27% adoption in the same year.
Something similar is happening in the field of health: although smartwatches and bracelets to monitor physical activity are becoming more common, with 23% of users in Europe and the United States, only 6% of individuals in these regions owned IoT devices for health monitoring in 2022.
Here, the potential of IoT is enormous but still underexploited.
Remote patient monitoring (RPM) devices have demonstrated their ability to reduce the duration of hospitalizations and hospitalization-related costs in pilot projects, but their adoption remains limited in OECD countries.
The lack of specific reimbursement mechanisms, the limited digital skills of healthcare professionals and the low degree of digitalisation of the sector are some of the main obstacles.
At the industrial level, IoT adoption is also uneven. The manufacturing and transportation sectors lead in many countries, but technological challenges, such as security and interoperability, continue to hold back further deployment. Research by IoT Analytics found that while smart factories are emerging in places like Germany and the United States, the challenges remain significant.
IoT and its relationship with cybersecurity
The accelerated adoption of IoT has also highlighted new concerns around cybersecurity.
Every connected device is a potential access point for cybercriminals, increasing the risk of attacks.
This is a problem not only for consumers, but also for businesses and governments.
Experts such as Bruce Schneier, a leading cryptographer, have warned that as the IoT grows, the risks associated with privacy and security multiply.
The use of private 5G networks in smart factories, such as Factory 56 in Sindelfingen, Germany, is demonstrating that these technologies can improve efficiency and reduce costs, but they also show the need to develop robust new security protocols that can protect the growing number of connected devices.
In conclusion, IoT is a technology that promises to transform entire industries and improve everyday life. However, its uneven adoption, cybersecurity risks, and technological barriers limit its potential. For IoT to achieve its true impact, these challenges will need to be overcome through appropriate policies and increased investment in infrastructure and digital education.
Only then can we see a wider and more equitable adoption of this powerful technology.
