Artificial intelligence (AI) is without a doubt the technology that companies currently prioritize when investing. However, the “Internet of Things”, popularly known as IoT for its acronym in English, is also gaining ground among companies due to the benefits it generates. Organizations in Latin America are no exception to this trend and a strong boost to the segment in the region is expected by 2024.
“On the one hand, IoT adoption has shown consistent growth. Respondents from Brazil and Latin America who indicated solutions in the production or proof of concept (PoC) phase represented 31% in 2019, 52% in 2021 and 58% in 2023,” highlights Logicalis' IoT Snapshot 2024, a study that company has been operating since 2016 and includes Brazil, Argentina, Chile, Colombia and Mexico. “On the other hand, in Brazil 56% stated that their budgets for IoT will be equal to or higher than those of 2022 and in the remaining countries, these same responses reached 65%,” the report continues.
IoT Analytics experts agree with these figures and state that “IoT remains one of the top three corporate technology priorities.” “In recent surveys by PWC, KPMG and BCG, IoT was ranked second or third after AI in terms of investment prioritization for emerging technologies. The latest research finds that the growth of AI is a strong tailwind for the IoT market as companies are gaining interest in both AI and IoT within their organizations.
Due to the investments that will be made, Fortune Business Insight expects the global IoT market to approach US$714 billion globally in 2024. Meanwhile, the Statista firm estimates that revenues in the market of consumer IoT in Latin America will reach $8.57 billion this year. Although, in global comparison, it is much less than the US$80 billion in income that will be generated in China, just to cite one example, it is still an important figure for the region.
Challenges for IOT in Latin America
For Logicalis specialists, the IoT debate can also benefit from synergistic technological topics that have received a lot of attention in the market. “5G is one of these issues: on the one hand, it constitutes a priority for executives, with great expectations; However, on the other hand, there is a low level of understanding about how this technology works and how it can contribute to business results. Better understanding how the technology works can be important to mitigate the risks of its adoption,” notes the IoT Snapshot 2024 report.
Therefore, investment in connectivity is one of the main challenges for this technology to grow in the region. “In that sense, a positive aspect is that new implementations of private mobile networks in 2024 are expected to exceed US$220 million in expenses related to wireless infrastructure, professional and managed services,” projects IDC, a consulting firm specialized in markets.
Another crucial topic is artificial intelligence. “AI presents a challenge that has been observed since the first editions of this study: a very small proportion of professionals are prepared to work with this technology,” they reflect in Logicalis. And they continue: “This scenario is probably related to the fact that most of the organizations surveyed do not have teams dedicated to AI: there is no dedicated team because there are no trained professionals or trained professionals are not available. because not enough efforts are dedicated to this issue.”
If both network infrastructure and the adoption of AI are strengthened, the IoT segment in the region has many opportunities to grow. In fact, for the consulting firm Informe de Expertos, the IoT market in Latin America has the capacity to grow at a compound annual growth rate of 11.2% between 2024 and 2032.
“We do not have a crystal ball and it would be naive to try to offer opinions based only on past trends (even because the market forces acting on these new technologies are very different), but this information can be very useful for discussions and design of technological adoption strategies for the coming years,” they say in Logicalis. And they conclude on their IoT Snapshot 2024 report: “We observe a scenario in which we have already seen many advances and that can benefit even more from new trends.
However, to take advantage of these advantages, it is important that organizations invest not only in technological issues themselves, but also in disciplines such as people management and change management, in addition to deepening mutual knowledge of business and technology between employees. organizational teams.