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Country spotlights: How much can the industrial internet of things fast-track your economic growth?

In the shift from an industrial to a digital economy, many countries are targeting the Industrial Internet of Things (IIoT) as a means to deliver faster growth.

Overview

In the shift from an industrial to a digital economy, many countries are targeting the Industrial Internet of Things (IIoT) as a means to deliver faster growth. But without establishing the right enabling conditions, they will not fully capture the opportunity.

The Accenture Institute for High Performance measured the potential direct and indirect impact of the Industrial Internet of things on the GDPs of 20 developed and emerging economies. These countries generate more than three-quarters of the world’s economic output. Each country’s ability to absorb IIoT benefits were then analysed and the findings of both were combined to project how the IIoT can impact the potential GDP growth by 2030 for 20 different countries.

This report provides a starting point—based on Accenture’s analysis of the national absorptive capacity for IIoT -related technologies of 20 countries—for determining the kinds of policy changes and investment required to turn the IIoT into a more powerful force for economic growth.

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Key Findings

The IIoT is seen by many as a means to drive faster growth in an increasingly digital global economy.

Based on research into previous eras of technological revolution and interviews with experts from the technology, economics and business disciplines, it is obvious that economic diffusion comes down to how well a country can weave innovations into its economic and social fabric.

Accenture developed an index of the factors that underpin this process—which we call a country’s “national absorptive capacity” (NAC).

  • Business Commons - describes the business climate and pool of resources on which companies can draw to carry out their operations.

  • Take-off factors - this is what helps transform a technological advance into usable applications, products and services beyond niche markets and players.

  • Transfer factors - these enable a technology to become far more deeply ingrained in an economy—inducing wider changes in the behaviour of businesses, consumers and society.

  • Innovation dynamo - when a technology produces self-sustaining innovation and development.

Results show that if each of the 20 countries invested the same amount of capital in the IIoT, countries higher on the NAC Index will gain more economic benefit from the investment, all other things being equal.

Analysis

Accenture researchers estimate that the IIoT will add trillions of dollars to the global economy by 2030. For the 20 countries, the IIoT could add around US$10.6 trillion to the cumulative GDP of these economies over the next 15 years.

However, our analysis shows that the potential for growth could be even greater. By taking additional measures to improve their capacity to absorb IIoT technologies and increase IIoT investment, countries could generate up to an estimated US$3.6 trillion in additional value over and above the indication of current trends, for a total of US$14.2 trillion.

To Realize these gains government leaders and policymakers must fully support the IIoT to ensure that their countries readily translate this technological change into economic growth.

Authors
 Mark Purdy is a managing director and chief economist at the Accenture Institute for High Performance. He is based in London. mark.purdy@accenture.com

Ladan Davarzani is a research fellow at the Accenture Institute for High Performance. She is based in London. ladan.davarzani@accenture.com