By Veena Pureswaran – As the Internet of Things continues turning physical assets into participants in new real-time, digital marketplaces, it’s creating what we describe as a new “Economy of Things.” In fact, such digital marketplaces represent huge economic opportunities for growth and advancement.
In a new study from IBM’s Institute for Business Value, The Economy of Things, we explored the macroeconomic impact of this transformation across three dimensions: Asset Marketplaces, Risk Management and Efficiency, as defined here:
- Asset Marketplaces: Most physical assets are vastly underutilized. For example, commercial real estate in the United States is only 67% utilized. The Internet of Things can create liquid marketplaces of underutilized assets by enabling real-time discoverability, usability and payment. Our model shows that the emergence of new digital marketplaces with lower cost office space alternatives can lower rental prices and increase productivity for the industry.
- Risk Management: Instrumentation and digitization can revolutionize credit and lending by building more accurate pictures of risk. In economies where there is no formal measure of credit – such as informal SMBs in South Africa which amount to only 8% of all bank lending – our model shows that digital usage data and virtual contract reinforcement can lead to an infusion of credit and reduction in interest rates.
- Efficiency: Insights from connected devices in industries that are not technology-intensive could yield substantial gains in efficiency. Our analysis shows that in industries like agriculture, where IT accounts for just 1 percent of all capital spending, real-time integrated sensor data can help achieve greater land productivity.
As new marketplaces and services powered by the Internet of Things emerge and evolve, enterprises must evaluate their role in this transformation. As with any industry transformation, profit pools will get redistributed and real-time use of data and insights will be key to profitability.
While an office desk that trades itself on a marketplace may seem a bit futuristic, even dystopian, technologies are driving the Economy of Things so rapidly that your smart desk may indeed be just around the corner.
To read more about the study, download the report here.