A question with no firm answer
People often ask whether the Internet of Things (IoT) will create jobs or destroy them, and how much it adds to the economy. The honest answer is that nobody knows precisely. Published forecasts exist, and they range so widely that quoting any single figure would give a false sense of precision. This article does not cite one. Instead, it explains the main ways connected devices can affect employment and growth, why measurement is hard, and how to read claims you come across.
How IoT might create jobs
New work tends to appear in a few places.
Making and installing devices. Sensors, tags, gateways and controllers have to be designed, manufactured, shipped and fitted. Installation and maintenance often need local, hands-on technicians, such as people who fit meters, wire up building systems or service equipment in the field.
Running the data side. Connected devices generate a steady stream of readings. Someone has to build the software that collects them, store the time series data, manage fleets of devices, keep them updated and respond when they fail. Roles in networking, embedded software, data analysis and security grow around that work.
Supporting services. Consultants, trainers, integrators and support teams help organizations choose and run these systems. Many of these jobs are in existing companies rather than in new ones.
New products and services. Some businesses are built around the data, such as monitoring services sold by subscription. Whether these add net employment depends on whether they grow the market or just replace older ways of doing the same thing.
How IoT might displace jobs
Connected systems can also reduce the need for certain tasks:
- Manual meter reading, stock counting, routine inspection rounds and some data entry can shrink when devices report automatically.
- Remote monitoring can mean fewer site visits, so fewer people travel for routine checks.
- Automation in factories and warehouses, helped by sensors, can change how many people a given output requires.
Displacement does not always mean job loss. Employers may redeploy staff, workers may move to other tasks, and growth elsewhere can absorb people. But shifts can be uneven: the people losing a task are not always the people who can fill the new roles, and training, location and age can all be barriers. This is one reason the effect on individuals can be much harsher than a national total suggests.
Productivity and growth
The main route from IoT to economic growth is productivity: getting more output from the same inputs. Examples include less unplanned downtime through predictive maintenance, lower waste in agriculture and logistics, and lower energy use in buildings. Savings of this sort can lower costs, help firms compete and free money for other spending or investment.
There are reasons to be careful about large claims, though:
- Benefits are scattered. A small saving in many places is hard to add up and attribute to IoT rather than to other changes, such as better management or other software.
- Costs are real. Hardware, installation, connectivity, security and upkeep reduce net gains. The total cost of a deployment is often underestimated.
- Many projects underdeliver. Plenty of pilots never scale, and project failure is common, so forecasts assuming widespread success may be optimistic.
- Gains may take time. New technologies often need organizations to change processes before the benefits appear.
Why the estimates vary
Forecasts differ because the question is hard to define. What counts as an “IoT” device? Is a smartphone one? Does the estimate include the value of the devices, the services around them, or the savings they produce? Different assumptions about adoption speed, prices and what would have happened anyway produce very different totals. Forecasts are also often produced by organizations that sell related products or services, which does not make them wrong but is a reason to read the assumptions. When you see a large, exact-sounding number, look for what it measures, the year it was made and whether the earlier forecasts from the same source turned out to be close.
Who benefits, and who may not
Gains and costs are not shared evenly. Large firms with capital to invest may adopt faster than small ones. Regions with good connectivity and skilled workers may benefit more than those without. Consumers might gain through lower prices or better services, while workers in affected roles may face disruption. There are also wider costs to consider, such as electronic waste and the energy used by devices and data centers, and concerns about surveillance when connected systems track people as well as things.
Reading claims sensibly
A balanced view is that IoT will probably change what work looks like more than it will simply add or subtract a number of jobs, and that the effect will differ by industry and country. Treat strong promises, whether of mass job creation or mass job loss, with caution. If a forecast matters for a decision, such as choosing a career path or planning a business, use it as one input among several, and expect to revise your view as real evidence accumulates.