There are many definitions of what constitutes an IoT device. For me, it’s hardware that measures, controls, or positions something. In a broader context, IoT is used for technology-assisted decision-making based on real-world data—data with the potential to increase efficiency, reduce costs, and minimize environmental impact.
Industrial IoT is one of the clearest examples of how IoT creates value. For those with long experience in the industrial sector, IoT’s ability to enhance efficiency, improve product quality, and reduce costs is a natural extension of the ongoing pursuit of operational improvements in industrial automation.
Industrial IoT (IIoT) – revolutionizing efficiency
According to a report from Activant Capital, industrial IoT could reduce production costs by up to 25%, which globally equates to savings on the scale of France’s GDP. Another report from Deloitte shows that predictive maintenance can reduce maintenance costs by 10–20% and unplanned downtime by 20–25%.
Already in 1999, Kevin Ashton stated: “If we had computers that knew everything there was to know about things […] we could greatly reduce waste, loss, and cost. We would know when things needed replacing, repairing.” This already hints at predictive maintenance—a key area of IoT today. Predictive maintenance identifies potential issues before they lead to breakdowns and can increase production capacity by 5–10%.
A real-world problem
Unplanned downtime affects every business, with cost implications that vary widely. The more complex the production process, the higher the cost of downtime. As a general benchmark, a one-hour downtime in the automotive industry can cost around SEK 2,000,000, while the same for a consumer goods manufacturer might be around SEK 300,000. Predictive maintenance is therefore critical to minimize stoppages and secondary losses.
Continuous improvement
According to Gartner, manufacturing is currently one of the leading sectors driving IoT growth. Industrial IoT allows companies to improve cost efficiency and quality. The “Top 10 IoT Use Cases” report by IoT Analytics highlights tangible results:
- 8.4% higher operational efficiency
- 4.6% improved product quality
- 8.1% cost reduction
As IoT systems become less complex to implement, industries are increasingly investing in IoT to ensure sustainable growth and competitive advantage.
AI meets IIoT
Perhaps the most exciting development in IoT is the integration of AI. AI thrives on data, and IoT generates massive volumes of it. A human limitation is our ability to rapidly analyze large datasets—something AI excels at. When AI and IoT combine, we can enhance precision and efficiency in the services we deliver, while also improving safety through better insights.
Edge intelligence and AI
The combination of AI and IoT offers potential beyond data analysis—AI can in some cases be embedded in IoT devices, enabling smarter local decision-making. Edge computing means that data processing occurs locally on devices or near sensors, rather than in centralized data centers. This addresses the latency and reliability issues associated with cloud-based solutions.
By processing data close to the source, disturbances are minimized and response times shortened. In industrial automation, high reliability and resilience are crucial. Local AI algorithms can quickly interpret data and take action without relying on central servers. On the flip side, edge computing increases energy demands, making battery-powered devices impractical compared to sensors that only measure and transmit data.
Edge AI, however, is not always suitable for handling complex AI models that require updates from centralized data sources. These models are often trained on large, aggregated datasets that edge systems cannot accommodate.
Sustainability
IoT plays a vital role in building more sustainable industries through optimized resource usage, energy savings, and improved processes. Environmental tracking and reporting is now a reality for many organizations, and sustainability is one of the leading reasons companies invest in IoT solutions.
IoT makes it possible to systematically gather operational data. By leveraging IoT for continuous optimization, companies can not only improve efficiency but also monitor their sustainability impact in ways previously unattainable.
Security becomes mandatory
As IoT adoption grows, security becomes increasingly critical. Cyberattacks on IT systems are rising, and attacks targeting IoT systems follow the same trend. A 2023 report showed a 400% increase in attacks, indicating that these systems are becoming high-value targets. This has led to the introduction of new global security standards and regulations to protect both users and systems.
To address these challenges, the EU is introducing new rules through the updated RED directive. As of August 2025, all IoT devices sold in the EU must meet explicit cybersecurity requirements. These standards send a clear message: security must be built into every IoT system to protect users from potential threats and intrusions.
The future of IoT lies in the balance between technological progress, sustainability, and robust security—a balance that demands innovation and accountability. IoT is evolving from a technical solution to one of the most important driving forces behind a sustainable and secure industrial future.