IoT could boost China’s economic growth by US$1.8 trillion by 2030

Rebecca Gibson
Rebecca Gibson
By Rebecca Gibson on 11 September 2015
IoT could boost China’s economic growth by US$1.8 trillion by 2030

The internet of things (IoT) could boost China’s economic growth by US$1.8 trillion by 2030 if enterprises can overcome current challenges in infrastructure, data policy and talent, according to Accenture study.

Accenture’s How the Internet of Things Can Drive Growth in China’s Industries found that, based on current policy and investment trends, IoT could add around US$500 billion to China’s cumulative GDP by 2030.

However, The report found that various factors are currently holding back IoT adoption in China. This includes a lack of the specialist and core technology skills required to transform traditional product offerings into more intelligent data-based services. Other factors include a lack of integrated communications and IT systems, and unclear data sharing policies.

“Chinese business leaders and policy makers cannot assume that the country will automatically enjoy strong economic growth thanks to the IoT,” said Gong Li, chairman of Accenture Greater China. “To make such an expansion possible, they must shift their attention away from the technology itself and toward the conditions that enable the technology to be widely adopted through all parts of the economy. The government’s ‘Made in China 2025’ initiative provides a strong basis, as the IoT will be most relevant to advanced and intelligent manufacturing.”

To overcome these challenges, Accenture recommended that enterprises address critical skills and infrastructure gaps, upgrade legacy infrastructure and invest in integrated communication systems and secure networks to promote cross-industry collaboration. They should also accelerate the investment cycle.

By investing to eliminate infrastructure gaps and accelerate innovation, Accenture predicts that China could boost its annual GDP by 1.3 percent by 2030, cumulatively adding US$1.8 trillion to the economy.

China’s manufacturing, public services and resources sectors are set to gain the most by investing in IoT technologies and together they will account for more than 60% of the IoT’s total cumulative impact on China’s GDP by 2030.

The manufacturing sector will benefit by US$196 billion in its cumulative GDP contribution over the next 15 years, based on China’s current policy and investment trends. However, that could jump to US$736 billion, a 276% increase, if companies invest in the enhanced measures advocated by Accenture.

The public sector could record a cumulative rise in output from US$61 billion to US$217 billion. A similar increase could be seen in the resources sector, with its contribution to cumulative GDP rising from US$48 billion to US$189 billion under enhanced measures, almost three times higher than under current conditions.

“The IoT will not only boost China’s ability to deliver more advanced industrial solutions to break through efficiency bottlenecks, but also help differentiate its products and services around customers’ digital experience, ” said Leo Ng, Accenture digital lead in Greater China. “That is why IoT needs to be deployed through a clear business strategy and across all sectors at scale. Companies and government need to learn to work across traditional boundaries and in a spirit of collaboration and experimentation in order to create new business models and innovations.”

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