The future of IoT by 2024

Posted on 25 Aug 2017 by Jonny Williamson

A new report on behalf of the British Office of Communication (Ofcom) has identified important applications, enablers and inhibitors regarding the IoT for manufacturers now and in the future.

By the end of 2024 there are 115.7 million connections (a growth rate of 36%) expected in the UK- image courtesy of Pixabay

The Ofcom has highlighted several priority areas to help and support the growth of IoT, which is set to enable large numbers of previously unconnected devices to communicate and share data.

And working with industry and Government, Ofcom aims to create a regulatory environment which fosters investment and innovation in the emerging IoT.

The services enabled by the IoT span many industrial sectors and as connected devices become more crucial, it is even more important that careful consideration is given to the future direction of the IoT sector.

The report has identified applications of the IoT in 12 important market sectors, and an overview of key growth sectors IoT is expected to be deployed in a broad range of applications from 2016 to 2024.

One finding is that the IoT will be dominated – in terms of the number of connections – by three sectors: automotive, consumer electronics and FMCG, and utilities.

The other sectors are the following.

1. Automotive (55.3)

2. Consumer electronics and FMCG (39.9)

3. Utilities (36.5)

4. Smart Cities (5.9)

5. Supply chain (3.4)

6. Manufacturing (3.1)

7. Healthcare (2.7)

8. Agriculture and environment (2.5)

9. Construction (2.3)

10. Intelligent buildings (2.1)

11. Retail and leisure (1.8)

12. Emergency services and national security (0.3)

(Connections in 2024 (millions))

Another crucial finding is that at the end of 2016, there were estimated to be approximately 13.3 million IoT connections in the UK, and it is expected to grow at a compound average growth rate (CAGR) of approximately 36%, to 155.7 million connections by the end of 2024.

IoT and the increase of data analytics 

Manufacturers are currently using IoT solutions to track assets in their factories and to increase analytics functionality through predictive maintenance. Harley Davidson, for example, has incorporated IoT into its motorcycle plant to keep a record of how different equipment is performing, for example, the speed of fans in the painting booth. The software can automatically adjust the machinery if it detects that a measurement – such as fan speed, temperature or humidity – has deviated outside of an acceptable range.

IoT and market forecasts for the next eight years

There is currently some activity in both the process and maintenance groups of applications, and growth is expected from applications in both groups, although this is tempered by the fact that many systems of best practice are already in place in manufacturing firms which reduces the incremental business case.

There are expected to be approximately 3.1 million connections by 2024. The largest applications by 2024 are expected to be predictive maintenance, predictive ordering of components and component tracking.

There is expected to be a limited market for connected robotics in warehouses as most warehouses do not have a business case for faster picking.

Although there are relatively few connections, each is capable of delivering high value. For example, any sensor which prevents downtime in the manufacturing process saves both the time and costs of idle equipment and workforce.

One barrier to higher numbers of connections is the industry structure, in which there are many smaller companies with relatively specialist processes and potentially aging equipment and buildings.