Data is ‘crude oil‘ mined from the Internet of Things – here‘s how Australia can refine it into a $308bn opportunity

Harvest data, not leafy greens. Picture: Getty Images

  • Report finds IoT presents a $308 billion opportunity across five Australian industries
  • Average home expected to own 31 IoT units by 2023, up from 4 today
  • The average farm will produce 4.1 million data points per day in 2050

A report out today claims the Internet of Things (IoT) can “supercharge” Australia’s next wave of economic growth to the tune of $308 billion.

“Australia’s IoT Opportunity: Driving Future Growth” was commissioned by the Australian Computer Society and prepared by PricewaterhouseCoopers.

Launched today in Sydney, the report reveals that in five key sectors – construction, mining, healthcare, manufacturing and agriculture – IoT has “the potential to reinvigorate Australia’s stagnant productivity growth”.

Across those sectors, it found IoT could help grow their productivity levels by 2% per annum, equivalent to between $194 and $308 billion in GDP over the next 8-18 years.

And it all comes down to data. Or rather, how we use the countless reams of data IoT devices are already collecting as they grow toward an estimated 30 billion by 2020 worldwide.

The key to putting that data to its best work is artificial intelligence.

“As IoT has matured, the highest value of an IoT solution is no longer sensors and actuators, rather in artificial intelligence,” ACS President Yohan Ramasundara said.

“We often hear that data is the new fuel for the digital economy, it is however crude oil, and needs to be refined.

“Artificial Intelligence via software applications is the refinement process, and it is here where Australian can become a market leader developing scalable solutions that can be taken to the rest of the world.”

A separate report from the ACS last year noted that by 2050, the average farm will produce 4.1 million data points per day thanks to IoT. And it will need to be processed in real time to improve yields, make better predictions and reduce costs.

As for the devices themselves, the report found that IoT hardware, software, solutions and communications systems could be worth up to $30 billion to Australia’s tech sector alone by 2023.

“Agriculture and resources continue to dominate Australia’s exports, and we do well exporting education to the rest of the world,” ACS President Yohan Ramasundara said.

“Technology wise however, there isn’t anything ‘smart’ in our top ten exports. IoT provides an opportunity to change all that.”

IBM’s smallest computer. Picture: IBM

First of all, there is a range of telling factors and milestones behind the rise of IoT between now and 2023:

  • The average sensor cost will come down from $US0.50 to $US0.30.
  • Wireless connections on 4G networks are expected to rise from 2.1 billion to 9.5 billion.
  • Processing power is expected to multiply by a factor of 10.
  • Miniaturisation seems to know no bounds. IBM recently launched a computer the size of a grain of salt, and the report says sensors the size of a dust particle already exist.
  • And cloud data storage volumes are expected to multiply by a factor of 15.

In terms of IoT units installed, those in the average home will rise from 4 today to 31 in 2023, while businesses will host an average of 18 units, up from 2.

Here are the key findings from the report on what opportunities that could provide for the following five industries:

Construction

Total potential annual run rate benefits: A$75–96bn

Slow to adopt process innovations, yet characterised by physical activities and technical equipment.

Manufacturing

Total potential annual run rate benefits: A$50–88bn

Stable, controlled setting; large number of “things”. An ideal environment for IoT.

Healthcare

Total potential annual run rate benefits: $A34–68bn

Yet to follow other industries in reinventing delivery models, tech base and value chain. Potential impact of IoT on broader healthcare sector is “enormous”.

Mining

Total potential annual run rate benefits: $A22–34bn

Significant potential for IoT to increase output, decrease production costs, improve safety outcomes and reduce environmental impact. Substantial flow-on effects to Australian economy.

Agriculture, fishing and forestry

Total potential annual run rate benefits: $A14–22bn

Adopting IoT technology would help primary producers increase yields and reduce costs, which in turn would lift profitability and improve the competitiveness of Australian produce in international markets.

The report comes just days after CSIRO’s data wing Data61 released an investigation into the opportunities the coming “third wave of digital innovation” presented Australia.

It identified in the “$10-$15 trillion” global opportunity as technological advances ramp up.

Some estimates have put the global value of the IoT industry alone by 2030 at $5-$6 trillion.

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