IoT market proves resilient in adverse scenario

Internet of things - IOT concept
Sheila Zabeu -

February 16, 2023

The global Internet of Things (IoT) market is expected to grow 19% in 2023, showing resilience even in the face of the global economic crisis. According to IoT Analytics, growth in 2022 was 21.5%, totalling US$201 billion and showing a slowdown from the 23% rate previously forecast.

In the last forecast of the study, the global economy was expected to recover more quickly, with stronger supply chains and sustained investment in new technologies to mitigate labour shortages. Given this reality, IoT Analytics has chosen to reduce the projection for 2023 to 19%. The compound annual growth rate of the IoT market is expected to be 19.4% between 2022 and 2027, adding up to US$483 billion at the end of the period.

Overall enterprise IoT spending grew

“We have lowered our forecast for 2023, but the corporate IoT market is surprisingly resilient. The number of lay-offs at IoT companies is comparatively small, and healthy order books show sustainable demand,” says Philipp Wegner, principal analyst at IoT Analytics.

The study details that there are three main reasons for the lower than expected growth in 2023: lower GDP growth, sustained inflation and high-interest rates. In the most recent projection in January 2023, the IMF forecast real GDP growth of 2.9 per cent in 2023, down from 3.4 per cent in 2022. According to the bank, GDP growth will be lower in almost all the world’s major economies.

In addition, in most developed countries, inflation is still higher than in recent decades. Because of this, technology companies, like those in other sectors, are likely to find a workforce seeking higher salaries to deal with the rising cost of living, as well as customers, trying to control expenses.

Third, but not least, central banks around the world have raised interest rates to fight inflation. Higher interest rates increase the cost of borrowing, which can reduce the ability to invest in new projects or technologies.

Resilient IoT

According to IoT Analytics, even though overall Information Technology spending fell in 2022 and is expected to grow slowly in 2023, investment in enterprise IoT is expected to grow by 19% in 2023. Further evidence of resilience comes from a healthy demand for digital transformation and IoT solutions in the long term, the study highlights.

Another fact that shows IoT has been a resilient segment is lay-offs. Many tech companies have announced lay-offs in volume recently. The website, which tracks the tech sector, recorded more than 100,000 payoffs by mid-February 2023. However, IoT-related jobs were little affected, and in some cases experienced and skilled professionals were even hired.

The study highlighted another side of lay-offs in the tech industry. Professionals who are in the United States on a work visa generally have only 60 days to find a new job. As a result, tens of thousands of highly skilled and experienced people must return to their home country and take with them the possibility of conducting better and faster digital transformation projects in other locations outside the United States. In other words, while lay-offs may create short-term disruption, they can also be the starting point for a healthy reorganization in the global technology market.

As well as not making large-scale redundancies, IoT solution providers are looking to the future with positive prospects. Some emphasize the giant potential of industrial IoT, considering that projects in this area are still in the early stages and present many long-term opportunities.

Industrial IoT in detail

The global industrial IoT market is expected to reach a value of US$ 276.8 billion by 2029, with a compound annual growth rate of 16.0% between 2022 and 2029. According to, higher investments in Industry 4.0, government incentives to promote industrial automation and the demand for high productivity and efficiency are expected to drive the growth of this market.

Moreover, solutions geared towards predictive maintenance and the growing number of datacenters are expected to offer significant opportunities for the advancement of the industrial IoT market. On the other hand, lack of standardization and high capital and operational expenses may restrict the growth to some extent.