A lot of changes have occurred in the first month of 2017. A new administration has entered office, which is causing a shift in the economy—and as a byproduct, the IoT (Internet of Things). The question becomes: What can be expected in terms of economic performance and, by extension, IoT growth opportunity in the year ahead?
At the end of December, the Center for Business and Economic Research at BSU (Ball State University), www.cms.bsu.edu, released its 21st annual Indiana Economic Outlook, which includes a 2017 economic forecast for the United States as a whole. BSU calls the national economic performance in 2016 “disappointing.” Despite forecasts predicting higher growth percentages in 2016, BSU says actual economic growth is unlikely to exceed 1.5%.
At a recent economic outlook event, Michael Hicks, director of the BSU Center for Business and Economic Research, said while job growth has pushed the unemployment rate to 4.9% at or near full employment, long-term unemployment remains much higher. In analyzing why 2016 didn’t live up to expectations, one reason might have been the contentious U.S. presidential election, which appears to have shaken investors and discouraged businesses from spending until it became clearer what the future would hold.
According to a CNN article published shortly before the November election, nearly 20% of the S&P 500 companies referred to the presidential election as a sort of red flag in their pre-election quarterly earnings calls. Certainly, when considering the best time for their businesses to invest in new opportunities, including the IoT, enterprise leaders must take the economic outlook into consideration.
In 2017, then, what does the crystal ball say for the U.S. economy? According to BSU, its model predicts growth in inflation-adjusted terms by 2.1%. This prediction exceeds the anticipated 1.5% growth rate during 2016. Further, BSU predicts an unemployment rate for 2017 of 4.7%—slightly lower than its anticipated percentage for 2016.
For the IoT, a positive economic outlook is a good omen. IT vendors hope this is the year the Internet of Things really hits its stride in a number of vertical markets. If anything, with time and a growing number of use cases that prove ROI (return on investment), more companies will recognize the cost-saving benefits of IoT technology, as well as the myriad possibilities for new services or revenue streams resulting from IoT data.
Research and analyst firm Gartner, www.gartner.com, predicts that in 2017 the Internet of Things will move from “what” to “how,” as organizations “rapidly act to capitalize on new business opportunities.” To be ready to capitalize on new business opportunities, Gartner advises enterprises to have a plan formed and ready to implement at a moment’s notice. This way, businesses will be better poised to address opportunities that arise or develop around the IoT to drive business value.
While a Trump presidency is just beginning, many insist it is a wild card for the U.S. and global economies. However, the IoT remains a relatively safe bet for businesses looking to invest in their future success and profitability. And while no economic outlook is foolproof, the signs point to a favorable atmosphere in which the IoT will continue to grow and expand in 2017 and beyond. The new president is betting on infrastructure to help the U.S economy and that bodes very well for the IoT, sensors, and other supporting technology. So look to 2017 to be a very promising year to spark new and innovative growth opportunities for companies looking to change the way we think about applying the IoT in business.