The Rise of the Smart Home and the Smart Factory

  • INSIGHTS  |
  • 05/06/2020  |
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The Rise of the Smart Home and the Smart Factory

As the results of the Politecnico di Milano’s Observatory show, the Internet of Things market keeps growing in Italy. And these objects capable of sharing data are redesigning the world we live in.

In today’s world, digital innovation is an essential factor for development, and the IoT – the Internet of things, meaning objects, from clothes to houses, which are capable of sending and receiving data – plays an increasingly important role in it. At the online event “Internet of Things: Innovation Starts Here” held on the 7th of April, where it presented its 2020 study of the Italian IoT market, Milan Polytechnic’s School of Management confirmed that IoT and intelligent technologies continue to grow in importance in the country.

In 2019, the Italian IoT market was worth €6.2 billion, a rise of 24% over the previous year, the largest single segment of the country’s IoT market being accounted for by Smart Metering and Smart Asset Management in utilities, with a value of €1.7 billion (19% more than 2018 and 27% of the total market). This growth was driven primarily by new regulatory obligations like legislation on gas and electricity meters, the effects of which will continue throughout 2020.

The next largest segment was made up by the country’s 16.7 million Smart cars – vehicles which connect to other vehicles or nearby infrastructure, and which constitute a market share worth €1.2 billion euros, or 19% of the market, a rise of 14% over last year.

The two areas currently showing the most significant growth are Smart Homes and Smart Factories.

Smart Homes and related products and technologies help improve domestic comfort, cut down on energy waste and guarantee security and safety. With a market share of €530 million, the Smart Home sector has grown by 40% from last year, its popularity driven in particular by the boom in intelligent personal assistants, which have stimulated sales of other smart objects, mainly those related to heating and lighting. Despite this, though, Italy remains for the moment one of the European countries slowest to pick up on new Smart Home technology.

Smart Factories, also known as Industrial IoT (I-IoT), are also on the rise, showing growth of 40% over 2019 and accounting for a market share of €350 million. The most common applications for I-IoT are those for factory management, followed by applications for logistics and for Smart Lifecycle projects which aim to facilitate the development of new models and the updating of products. 54% of Italy’s large companies have at least one I-IoT project underway, but the Observatory noted that a significant gap still exists between large companies and SMEs, with the main barriers to companies undertaking I-IoT projects being a lack of skills and poor understanding of the benefits, and that only a minority adequately exploit the incentives provided by the National Industry 4.0 Plan.

42% of Italian municipalities have implemented Smart City initiatives over the past three years, many of which still in the testing phase, but 39% of initiatives have extended their spread to the entire urban area and are ready to be put into action. The principal objectives of these Smart City initiatives are the improvement of existing services for citizens, the introduction of new services, and environmental sustainability. Despite the number of joint public and private initiatives, however, there is still no integrated Smart City ecosystem and, as with I-Iot, the main obstacles to Smart City projects are funding and a lack of skills.

Two more sectors showing promising growth are Smart Retail, which uses IoT technologies to collect user behaviour data in stores, and Smart Health, where IoT can, for example, improve the traceability of medicines and medical equipment in hospitals and monitor vital signs remotely.

“More and more companies are able to collect large amounts of data from connected objects, thanks to which they can enrich their offer with valuable new services,” commented Angela Tumino, Director of the IoT Observatory. “Services now make up 37% of the market offering up opportunities which require a radical change of pace by all the players in the supply chain.”

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