By Harald Bauer, Ondrej Burkacky, and Christian Knochenhauer
Security issues may represent the greatest obstacle to growth of the Internet of Things. How can semiconductor companies help resolve them?
Over the past few years, the Internet of Things (IoT) has captured headlines across the world, with newspaper and magazine articles describing its potential to transform our daily lives. With its network of “smart,” sensor-enabled devices that can communicate and coordinate with one another via the Internet, the IoT could facilitate computer-mediated strategies for conducting business, providing healthcare, and managing city resources, among numerous other tasks. For the public, the IoT could transform many of our most mundane activities by enabling innovations as diverse as self-driving cars and connected refrigerators capable of sending pictures of their contents to shoppers in grocery stores.
Although the IoT is still a nascent phenomenon, with many aspects of its infrastructure under development, the McKinsey Global Institute predicts it could have an annual economic impact of $3.9 trillion to $11.1 trillion worldwide by 2025. For the semiconductor sector, one of the many industries poised to benefit from the IoT’s growth, the economic gains could be particularly significant.
The IoT’s way forward may be complicated, however. As with any market in its early stages, growth projections could prove overly optimistic if innovators and business leaders are unable to overcome various technological, regulatory, and market challenges. In the case of the IoT, weak security may be the most important issue—a point underscored by a survey that McKinsey conducted in 2015 in collaboration with the Global Semiconductor Alliance (GSA).1When we asked respondents about their greatest concerns about the IoT, security topped the list.