Commodity sector takes lead in digitization

By 2020, the Internet of Things in Russia is expected to grow to at least RUR 80 bln ($1.07 bln), while the ‘commodity curse’, surprisingly, may foster the development of the sector.

Such conclusion were made following a survey, “Internet of Things in Russia: The Consumption ‘Funnel'”, conducted by Platforma Center for Social Project Planning and the Schneider Electric company. The polling was conducted among top managers of major Russian companies involved in various economic spheres – varying from oil and gas and banking sectors to agricultural and public utility spheres. The research results were presented in the form of a four-loop funnel, with closeness to the center indicating a sector’s high level of digitization, while closeness to the outer edge means its lag.

The major and most surprising discovery made by the authors is an extremely high level of  the IoT’s penetration in the oil, gas and mining sector, as well as in metallurgy. The survey participants compared the level of primary economic sectors with banking,  financial and communications sector, which are recognized as traditional leaders as regards introduction of IoT solutions. At the same time, the low level of the IoT development in the housing and utilities, agriculture and healthcare was not a surprise. According to authors, the factors that hinder introducing the Internet of Things included the low level of network coverage, among others.

Equally important was the observation of reversibility of the lag that the IoT market is experiencing. As the survey authors clarify, at least five years are required to close this gap, and in the optimistic scenario, to catch up with IoT leaders (USA, China, Japan, and Germany).

The authors also defined numerous factors that continue to hinder the development of the Internet of Things in the domestic market. They include the overall financial instability and the shortage of investments in high-tech sectors, legislative vacuum, and top managers’ rigid thinking. The sector’s development is also hampered by sanctions, mostly due to restrictions to the access to technology transfer.

According to the authors, the government’s dominant role in the market development is ambiguous – this is Russia’s fundamental difference from other countries, where business takes the lead in digitization. Such situation results in a highly uneven development of information technologies, with the country lagging behind in terms of the world’s most popular trends.


Previous ArticleNext Article