Winning with the Industrial Internet of Things by Accenture

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Winning with the 
Industrial Internet  
of Things
How to accelerate the journey  
to productivity and growth
2  Winning with the Industrial Internet of Things
Seizing the opportunity
Just when you thought  
the digital revolution was too 
focused on consumers, along 
comes the Industrial Internet  
of Things (IIoT). Arguably the 
biggest driver of productivity  
and growth in the next decade, 
this latest wave of digital 
innovation will accelerate  
the reinvention of sectors that 
account for almost two-thirds  
of world output.1 
Accenture estimates it could add 
US$14.2 trillion to the global economy 
by 2030,2 and that there will be 
particularly significant gains for  
the real gross domestic product (GDP)  
of mature economies. 
Contrary to conventional wisdom, 
Accenture research suggests that this 
next generation of digital technology will 
also benefit workforces of the future by 
augmenting skills and redefining tasks.
The potential economic benefits of the IIoT 
may be massive, but they are by no means 
guaranteed. Realizing returns begs two 
key questions: Are companies prepared  
to take full advantage of this opportunity? 
Are governments putting the right 
conditions in place to facilitate progress 
and capture benefits? 
Although a few pioneers are reaping 
rewards from their early investments, 
widespread adoption is hampered by major 
challenges. Accenture analysis reveals that 
many CEOs may be overconfident about 
their readiness for the IIoT. It also shows 
that many countries lack the full spectrum 
of enabling conditions required to spur 
the application of these new technologies 
across their economies. 
As the world struggles to emerge  
from a phase of weak productivity  
growth, fragile employment and pockets  
of inadequate demand, the IIoT offers  
a chance to redefine many sectors and 
accelerate economic and employment 
growth. However, to seize these 
opportunities, businesses and  
governments must intensify their  
efforts and escalate investments. 
The Industrial Internet of Things is a network of physical 
objects, systems, platforms and applications that contain 
embedded technology to communicate and share intelligence 
with each other, the external environment and with people.
The adoption of the IIoT is being enabled by the improved 
availability and affordability of sensors, processors and  
other technologies that have helped facilitate capture  
of and access to real-time information.
Winning with the Industrial Internet of Things  3
Securing economic growth
The raw technical conditions 
for the widespread adoption of 
the IIoT are highly favorable. The 
number of sensors and devices 
on which the IIoT depends has 
already reached tens of billions. 
There is a difference, however, between  
the availability of these technologies  
and capitalizing on their full potential 
by applying them effectively within 
organizations, through entire supply  
chains and across multiple industries.
Consider the emergence of electric power 
at the turn of the last century. Electricity did 
not become mainstream or transformative 
until the United States took the lead  
in embedding it across the wider economy.  
It was one thing to light the streets;  
it was another to reinvent factories around 
powered assembly lines, retrain workers  
and standardize manufacturing processes.  
The substantial boost to productivity laid  
the foundations for entirely new markets.  
The United States' head start in electricity 
gave the nation an advantage in developing  
and leading a range of related sectors,  
from the light bulb and domestic appliances, 
to automotive, semiconductors or software.
Likewise, if the IIoT is to generate economic 
growth, company and country leaders will 
have to think unconventionally as the rules 
of competition, production and service 
delivery change. Accenture estimates that 
the IIoT will lift real gross domestic product 
(that is, adjusted for inflation) by 1.0 percent 
in 2030 over trend projections for 20 major 
economies studied. And if those economies 
were to increase their IIoT investments by 
50 percent and improve the underlying 
enabling conditions in their respective 
countries, this could rise from 1.0 percent  
to 1.5 percent in that year. Looked at 
collectively in 2030, Brazil, Russia, India 
and China (BRICs) will see corresponding 
increments to annual GDP of 0.2 percent  
on average and, with enhanced investments 
and measures, 0.5 percent.
In particular, Accenture estimates that  
China looks set to see greater economic 
gains from the IIoT than Russia, India or 
Brazil. With IIoT-enhancing measures in 
place, China could see its cumulative GDP 
rise by US$1.8 trillion by 2030, raising  
its GDP in 2030 by 1.3 percent over  
trend projections.
The United States' economy will gain 
US$6.1 trillion in cumulative GDP by 2030. 
By taking additional measures, for instance, 
to improve the country's broadband 
infrastructure, this figure could rise to 
US$7.1 trillion. This could mean that the 
United States' annual GDP is 2.3 percent 
higher than trend projections in 2030. 
Including additional efforts and investments, 
Germany could lift its cumulative GDP  
by US$700 billion and the United Kingdom 
by US$531 billion within the next 15 years.3 
This would raise German gross domestic 
product and United Kingdom gross domestic 
product by 1.7 and 1.8 percent, respectively, 
in 2030 over trend projections.
How can this economic uplift be achieved?
By 2030, the Industrial Internet of Things could be worth (US dollars)2
$7.1
trillion to the  
United States
$1.8
trillion to China
$700
billion to Germany
$531
billion to the  
United Kingdom
4  Winning with the Industrial Internet of Things
Creating the outcome economy
Today, the IIoT is helping  
to improve productivity,  
reduce operating costs  
and enhance worker safety.  
For example, in the petroleum 
industry wearable devices  
sense dangerous chemicals  
and unmanned aerial vehicles  
can inspect remote pipelines. 
However, the longer-term economic 
and employment potential will require 
companies to establish entirely new 
product and service hybrids that disrupt 
their own markets and generate fresh 
revenue streams. Many of these will 
underpin the emergence of the "outcome 
economy,"4 where organizations shift from 
selling products to delivering measurable 
outcomes. These may range from guaranteed 
energy savings in commercial buildings  
to guaranteed crop yields in a specific  
parcel of farmland (Figure 1). 
The path to the
outcome economy 
At Marathon Oil refineries 
employees wear a wireless 
multi-gas detector that tracks 
exposure to harmful gases. 
Plant managers can monitor 
status, location and safety 
of all employees on site and 
individuals press a panic  
button to call for help.  
Source: Helping Achieve High 
Performance Safety Using Intelligent 
Industrial Mobility, Accenture, 2013.
Source: Caterpillar pushes dealers 
missing out on billions in sales each 
year to increase use of telematics 
data, by Wayne Grayson, Equipment 
World, May 21, 2014.
Source: Big Data Comes to the  
Farm, Sowing Mistrust Seed Makers 
Barrel Into Technology Business,  
by Jacob Bunge, Wall Street Journal,  
February 25, 2014.
Source: www.monsanto.com
Monsanto used mapping data 
on all 25 million farming fields 
in America by field shape, 
type of crop, crop yields, soil 
capacity and other critical 
metrics. By adding that data 
to Monsanto's data on seed 
yields, farmers can better 
understand which seeds  
will grow best in which fields  
and under what conditions.
In Europe, the 365FarmNet  
brings together equipment 
makers Claas, Rauch, Horsch  
and Amazonen-Werke, with 
Bayer, financial services giant, 
Allianz, the European Global  
Navigation Satellite Systems 
Agency and others to provide 
farmers with access to data and 
analysis on diagnostics, crops, 
fertilizers and other factors 
important to improving  
crop yield. 
Caterpillar has started using 
industrial analytics to help its 
dealers succeed. The company 
harnesses and analyzes data 
from its machines, engines 
and services and transmits the 
resulting insights to dealers, 
enabling them to anticipate 
problems, proactively schedule 
maintenance and help 
customers manage their 
fleets more efficiently.
Figure 1.
PRODUCTIVITY
SERVICE-CENTRIC
SAFETY
EFFICIENCY 
THE OUTCOME 
ECONOMY
Winning with the Industrial Internet of Things  5
How ready are companies?
It is clear that many companies are not 
ready to take advantage of the outcome 
economy. When Accenture surveyed 
more than 1,400 C-suite decision 
makersincluding 736 CEOsfrom some 
of the world's largest companies, the 
vast majority (84 percent) believe their 
organizations have the capability to create 
new, service-based income streams from 
the IIoT.5 But scratch beneath the surface 
and the gloss comes off. Seventy-three 
percent confess that their companies  
have yet to make any concrete progress.  
Just 7 percent have developed  
a comprehensive strategy with  
investments to match. 
Similarly, CEOs and executives express 
remarkable confidence (96 percent)  
that the senior leadership in their 
organizations grasp at least something  
of the nature of the IIoT. But far fewer  
say their leaders have completely 
understood it (38 percent).
And even this percentage seems to reflect 
a degree of overconfidence. Accenture, 
in collaboration with the Industrial  
Internet Consortium (IIC) undertook  
a World Economic Forum Industrial 
Internet Impact Survey among more than 
90 market leaders,6 those who are actively 
pursuing IIoT initiatives. The vast majority 
(88 percent) said that they still do not fully 
understand the underlying business models 
and long-term implications of the IIoT. 
These conflicting opinions underscore 
uncertainty around the IIoT. Accenture 
argues that many companies do not 
comprehend its full potential and that 
most are not primed for the fundamental 
shifts required to deliver hybrid products and 
services in an outcome-focused economy.  
If companies are to move from recognizing 
the potential of the IIoT to taking action,  
they need to improve their understanding 
through early experimentation and pilots 
with a range of partners.
Commitment to the Industrial Internet of 
Things: 73 percent of businesses have yet 
to make concrete progress. Only 7 percent  
have developed a comprehensive strategy.
Source: From Productivity to Outcomes: Using the Internet of Things 
to drive future business strategies, Accenture 2015.
6  Winning with the Industrial Internet of Things
Are countries laying  
the right foundations?
The evolution of electricity shows us that technological diffusion  
is not the same as its economic diffusion. Only once the technology 
behind the IIoT combines with a number of broader social, economic 
and political enabling factors can countries make the most of their 
productive and innovative potential. These factors are complex,  
often indirect and not always under the control of the private sector.
Accenture terms these enabling factors that 
explain the extent to which countries have 
woven the IIoT into their economic fabric as 
a country's "national absorptive capacity" 
(NAC). Our ranking of major economies on 
this metric can help spur policymakers into 
action.7 It can also help guide multinational 
companies looking for suitable locations in 
which to invest their various production and 
service operations.
The ranking model incorporates four 
measures of a country's enabling factors. 
The business commons includes reliable 
banking and finance, education, good 
governance and a healthy network of 
suppliers. A category of take-off  
factors includes the levels of research  
and development (R&D), the presence  
of high-tech companies and the degree  
of technology skills. 
The wide diffusion of technology  
requires effective transfer factors, such  
as the level of social and end-user 
acceptance, the willingness to embrace 
organizational change and an ability to 
respond to the impacts on human capital. 
Finally, a group of characteristics determine  
a country's ability to reach a level we term 
as the self-sustaining innovation dynamo, 
when the ubiquity of IIoT technology acts  
as a multiplier effect on existing levels  
of entrepreneurialism and the ability  
to commercialize new ideas.
The Accenture ranking reveals three  
broad groups: in the first group, the  
United States, Switzerland, the Nordic 
countries and the Netherlands have  
the most conducive environments.  
In the second group, Brazil, India and  
Russia are joined by Spain and Italy as 
those countries that have weaker enabling 
environments. Finally, the remaining group 
are among the world's leading economies 
that form a middle-performing cohort 
(Figure 2). 
A country with a NAC score of 100  
would be the top performer on each  
of the 55 indicators compared to the other 
study countries. Overall, the results show 
that no one country has achieved this level 
of NAC. In other words, every country  
has work to do.
The NAC Index
Figure 2. Rankings of countries' Industrial Internet of Things enabling factors
Source: Accenture and Frontier Economics
UNITED STATESSWITZERLANDFINLANDSWEDENNORWAYNETHERLANDSDENMARKUNITED KINGDOMJAPANGERMANYAUSTRALIASOUTH KOREACANADACHINAFRANCESPAINBRAZILITALYINDIARUSSIA64.0 63.9 63.2 62.4 61.8 59.0 58.8
55.0 54.4 54.3 54.1 52.2 50.9
47.1 45.7
33.0 32.4 31.3 29.9
21.3
0
10
20
30
40
50
60
70
100
90
80
NAC SCORE
Winning with the Industrial Internet of Things  7
Contrary to some accounts of the growing threat from  
intelligent machines, the IIoT will make people's work  
more engaging and productive. 
Eighty-seven percent of business leaders 
believe that the IIoT will result in the net 
creation of jobs.8 Intelligent machines 
will automate mundane tasks, freeing up 
workers to perform more creative and 
collaborative work with wider networks  
of people and machines. For example,  
real-time data access will enable today's 
blue collar workers to jointly analyze and 
adjust the performance of drill equipment  
in a mine or design products more iteratively 
with the use of rapid 3D printed prototypes. 
The IIoT will augment work through 
innovations, such as wearable technology. 
Global positioning system (GPS) navigation 
is an early example. Accenture and Royal 
Philips have created a proof-of-concept 
demonstration that uses a Google Glass 
head-mounted display for researching ways 
to improve the effectiveness and efficiency 
of performing surgical procedures.9  
This solution could provide physicians 
with hands-free access to critical clinical 
information. Theoretically transferable 
to other industries, the application could 
be used to help field engineers repair 
equipment with which they are unfamiliar, 
for instance. 
 
As IIoT growth takes hold, the need for 
talent will intensify. What is more, entirely 
new categories of jobs will be created:  
in digital medicine and precision agriculture, 
for example. The demand for digital literacy 
will be at a premium, with new skills 
required in specialist roles from digital 
robot design and management to transport 
network engineering and data analytics. 
 
 
 
 
 
 
As digital technology blurs or removes 
organizational boundaries, it will create 
more flexible workplaces that will appeal 
to sought-after Millennials and other 
groups that will be required to deliver new 
customer-oriented services. The impact will 
be felt on the workforce at every level and 
will require greater delegation by leadership 
and more decentralized decision making  
by individual employees.
Good news for the workforce of the future
8  Winning with the Industrial Internet of Things
Three accelerators to 
productivity and growth
Given the clear impact of national enabling conditions on  
a country's ability to take advantage of the IIoT, government  
action will be important. It will be a balancing act. 
To accelerate the IIoT, countries require 
"hard" capabilities, such as digital 
infrastructure, and "soft" technology skills 
and upskilling programs that depend on 
investmentin industries, data and people. 
Business should play its part in identifying 
the deficiencies in education, capital, 
technology or institutional frameworks, 
and ensure that policy action focuses  
on a balance of factors that can amplify 
existing competitive advantages.
Governments can support directly by 
bringing together the public, private and 
education sectors in the promotion of 
pilots that fast track innovation while 
reducing the investment risks. 
Winning with the Industrial Internet of Things  9
Reimagine industry models
If every product is connected and enables  
a new service, reinventing industry 
practices and business models becomes 
paramount. As companies embark on  
a journey that begins with using the IIoT 
to improve efficiencies, and progresses 
to creating outcome-oriented, product-
service hybrids, they will need to plan each 
stage. How can their efforts for improving 
asset utilization, for example, be used as a 
platform for new services? Will a company 
gain most value by offering its own data 
to an ecosystem of partners, or from 
incorporating third-party data to enhance 
its own services? Should a company invest 
in its own platform or join existing industry 
platforms? How will its partnerships  
evolve as a consequence? 
Capitalize on the value of data
The power of the IIoT comes not only from 
generating insightful data from physical 
objects, but also from sharing it between 
players within supply chains and cross-
industry consortia. According to a survey 
undertaken by Accenture and GE,10  
73 percent of companies are already 
investing more than 20 percent of their 
overall technology budget on big data 
analytics. That shift requires new technical 
and management skills. Further, it demands 
a cultural willingness to streamline data 
flow, not only within enterprises, but also 
between them. Companies must create  
new financial and governance models to 
share the rewards of using common data.
Interoperability and security are identified 
as the greatest hurdles to progress by two-
thirds of those companies actively pursuing 
IIoT initiatives, according to a survey by 
Accenture, the World Economic Forum 
and the Industrial Internet Consortium.11 
Collaborators should establish their 
own processes and tests to improve 
interoperability while establishing common 
security frameworks. Governments need 
to work across borders with business and 
other stakeholders to agree who owns data, 
what can be shared and how liabilities will 
be handled across jurisdictions. 
Prepare for the future of work
An overwhelming majority of executives 
(94 percent) believe that the increasing  
use of smart products and robotics will 
change the required skill and job mix in  
the workforce of the future.11 Decision 
making can be devolved to workers 
empowered by valuable data, while the 
design and creative process could become 
more iterative and experimental. Employees 
may have to develop working relationships 
with intelligent machines. And continuous 
learning could replace traditional training 
as technologies and business practices 
evolve quickly.
Managers will have to be willing to 
collapse hierarchies and silos and open 
up to extended workforces beyond their 
own walls. Such an approach demands 
a new culture and tolerance of autonomy. 
Leaders must also accept the demand for 
individually tailored working environments 
and experiences by creative and dispersed 
workforces, while maintaining core 
values and a common purpose within 
their organizations. 
Companies will have to establish digital 
platforms to create global talent exchanges 
that address skills shortages. Digital tools 
will also accelerate skills development and 
support a continuous learning culture. 
Companies will need to reassess their 
organizational structures and operations. 
Thanks to technologies such as 3D printing 
and micro-assembly, in some quarters,  
the IIoT will reverse today's trend of 
centralized manufacturing and localized 
services, requiring the reconfiguration of 
operations and talent. 
For businesses, three key areas need to be addressed to accelerate the 
economy-wide, cross-industry application of the IIoT:
10  Winning with the Industrial Internet of Things
Relevant reading
Read more about the Industrial Internet of Things
The Growth 
Game-Changer: 
How the Industrial 
Internet of Things 
can drive progress 
and prosperity, 
Accenture, 2015
Industrial Internet of 
Things: Unleashing 
the potential of 
connected products 
and services, World 
Economic Forum 
in association with 
Accenture, 2015
Industrial Internet 
Insights Report 
For 2015, GE and 
Accenture, 2014
Driving 
Unconventional 
Growth through 
the Industrial 
Internet of Things, 
Accenture, 2014
From Productivity 
to Outcomes: 
Using the Internet 
of Things to drive 
future business 
strategies, 
Accenture, 2015
CEO Briefi ng 2015
From Productivity
to Outcomes
Using the Internet of Things
to drive future business strategies
Winning with the Industrial Internet of Things  11
Contact us
Paul Daugherty is Accenture's chief 
technology officer and also leads the 
Accenture Technology Innovation &  
Ecosystem groups. 
E-mail: paul.r.daugherty@accenture.com 
Follow him on Twitter @pauldaugh
Bruno Berthon is managing 
director-Accenture Strategy, 
Digital Strategy Lead.
E-mail: bruno.berthon@accenture.com 
Follow him on Twitter @BFB61
References
1. Copyright Oxford Economics Ltd. Global Industry Databank, accessed on June 12, 2014.
2. Accenture analysis in collaboration with Frontier Economics.
3. 
The Growth Game-Changer: How the Industrial Internet of Things can drive progress and prosperity, 
Accenture 2015. www.accenture.com/iiot
4. 
Industrial Internet of Things: Unleashing the potential of connected products and services,  
World Economic Forum in association with Accenture, 2015. www.accenture.com/iiot
5. 
From Productivity to Outcomes: Using the Internet of Things to drive future business strategies,  
Accenture, 2015.
6. 
Survey participants were either members of the IIC, or on the Steering Committees for the IoT World Forum 
by Cisco, the Industrie 4.0 or the WEF Industrial Internet Working Group. www.accenture.com/iiot
7. 
The Growth Game-Changer: How the Industrial Internet of Things can drive progress and prosperity, 
Accenture 2015. www.accenture.com/iiot
8. 
From Productivity to Outcomes: Using the Internet of Things to drive future business strategies,  
Accenture 2015.
9. http://newsroom.accenture.com/news/philips-collaborates-with-accenture-to-create-first-proof-of-
concept-for-delivering-vital-patient-data-via-google-glass.htm
10. Industrial Internet Insights Report for 2015, GE and Accenture. www.accenture.com/iiot
11. Industrial Internet of Things: Unleashing the potential of connected products and services, World Economic 
Forum in association with Accenture, 2015. www.accenture.com/iiot
About Accenture
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year ended Aug. 31, 2014. Its home page is www.accenture.com. 
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