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Nordic region has most connected 'things' per person

Study shows Nordic countries are leading the way in the internet of things, but are yet to use it for business transformation

The internet of things (IoT) and industrial internet of things (IIoT) are expected to change the world around us – and the Nordic region is embracing them. 

Accenture recently placed the Nordics among the countries with the most conducive environment for the IIoT, and the latest Connected things report by Swedish-Finnish carrier TeliaSonera puts the region in pole position to capture IoT opportunities.

“The internet of things is growing rapidly in the Nordics. It is the early stages of a revolution that is going to transform society, industries and the way we live,” said Hans Dahlberg, head of global M2M services at TeliaSonera. “[The Nordics] has good infrastructure, with high internet penetration through fixed and mobile networks such as 4G and fibre, a stable regulatory environment and vibrant user communities.”

The results of this good groundwork can already be seen. For example, the Nordic region has four times as many connected “things” per person (1.7) as the rest of the world. TeliaSonera estimates the number will grow from 45 million connected devices in 2014 to 102 million – almost four per person – by 2018.

“Connected things” is how the TeliaSonera report, published together with management consultancy Arthur D. Little, defines physical objects (from cars and people to buildings and machinery) that can communicate with the outside world, but excludes devices which are already commonly online, such as computers, ICT infrastructure and mobile phones.

Furthermore, 17% of these connected things are registered on mobile networks (such as 2G, 3G and 4G), which is almost twice as high as the equivalent 9% in the rest of the world. By 2018, the share of mobile-based connectivity for connected things is expected to reach 20% in the Nordics, compared with 13% globally.

Consequently, the TeliaSonera report forecasts the Nordic market for IoT devices will grow by 23% annually, from €4bn in 2014 to €9.1bn by 2018. Sweden, the largest Nordic IoT market valued at €1.3bn in 2014, is expected to take a €3.1bn slice of this. Norway and Denmark, placed second and third, will increase to €2bn and €2.1bn respectively. Finland is expected to increase spending from €800m in 2014 to €1.9bn by 2018.

Read more about the internet of things in the Nordics

This growth is driven by several industry sectors. “The fastest growing segment of IoT in the Nordics is ‘connected people’ which includes not only people, but also animals, for example tracking of their geographical position, activity and measurement of biomarkers (in other words, wearables),” said Dahlberg. “The market for connected people is expected to grow by 59% annually until 2018.” 

Closely behind is “connected vehicles” – anything that transports passengers or cargo – which is forecast to increase by 36% annually and reach 14 million by 2018.

The growth is third fastest in the “connected buildings” sector, which is expected to grow by 23% annually until 2018, when there will be, on average, three connected building devices, such as security, energy and HVAC (heating, ventilating, and air-conditioning applications), per household in the Nordics.

The internet of things is growing rapidly in the Nordics. It is the early stages of a revolution that is going to transform society, industries and the way we live
Hans Dahlberg, TeliaSonera

The numbers may sound impressive, but connected devices are only the first stage of IoT. IDC senior analyst Anders Elbak said while Nordic countries are early adopters of new technology and have the necessary infrastructure, they are not significantly ahead in the overall maturity of IoT.

“Companies mainly look to IoT for productivity enhancements and business optimisation reasons, but very few acknowledge the business transformation opportunities,” said Elbak. “Overall, I would say the market is emerging.”

Similarly, Dahlberg believes there will be a gradual transition to more a mature IoT, with deeper integration into business models and processes.

“Enabling connected things to exchange and comprehend each other’s data, regardless of place, manufacturer or format, is key to realising the full potential of IoT. When different types of connected things start to interact, connected cars transform into intelligent transportation systems (ITS), connected medical devices into digital health and connected homes into smart cities,” he said.

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