The Internet of Things could have up to an $11 trillion impact on the global economy by 2025, according to a report from the McKinsey Global Institute last week. My friends at McKinsey sent me a copy Thursday, but I overlooked it in the press of last week’s news. You can read the full report here.
That’s a huge number – about 10% of the global economy – and clearly comes from a expansive definition of what “Internet of Things” means – basically everything and everybody connected to everything and everybody else, generating massive amounts of data in the process. McKinsey believes 70% of the economic value will come from the business-to-business applications, rather than smart light bulbs and refrigerators that tell you when you are out of milk. In the process, says McKinsey’s James Manyika, “companies will certainly have to develop whole new business models.”
That’s part of what’s driving the recent pickup in business investment. Cisco is among the companies at the front end of this trend, as Fortune’s Jonathan Vanian reported on Monday. Sony also announced plans to raise $3.6 billion to invest in research, development and production of digital sensors, which will help drive the trend.
Even Washington has discovered Internet of Things, although we are not sure that’s entirely a good thing. Stacey Higginbotham, our leading Internet of Things enthusiast, filed this report on on Monday.
Meanwhile, Greece remains in crisis. Enjoy the day.
| Alan Murray | |
| @alansmurray | |
| alan.murray@fortune.com |
Top News
• Greece defaults on IMF loan
Greece became the first developed nation to default on the International Monetary Fund, as a rescue program that had has sustained the country for five years expired. The Greek government failed to transfer $1.73 billion by the close-of-business on Tuesday — the largest, single missed repayment in the IMF’s history. WSJ (subscription required)
• Microsoft braces for job cuts
In an internal memo that leaked last week, Microsoft CEO Satya Nadella spoke about tough choices to come. Fortune surmises that could mean a wider round of layoffs may soon be announced, basing that assumption of past patterns at the software giant and a few recent announcements tied to jobs. On Monday, Microsoft announced plans to sell its ad placement business to AOL, offloading jobs in that process. It is also selling off part of Bing's mapping business to Uber. Fortune
• Top Toyota female executive resigns
Julie Hamp, Toyota's first female managing officer, has resigned following her arrest last month on suspicion of illegally importing the painkiller oxycodone into Japan. The executive, who had recently become chief communications officer, was was arrested after customs officials found oxycodone that had been shipped to her in the U.S., though Toyota has said it believes she had no intent of breaking the law. Reuters
• Apple's big mistake
Apple was slapped with a defeat yesterday when a federal court rejected the gadgets maker's appeal of an earlier ruling that found it had orchestrated a conspiracy with major book publishers in what the court said artificially inflated the price of e-books. Where did Apple go wrong? Instead of piggy-backing on the market opportunity for its publishing partners, Apple erroneously linked its e-book business to an industry that had no interest actually competing on price. Fortune
• Online lending firms shares go cold
Shares of once-hot Lending Club and On Deck Capital have taken a beating recently, hurt by worries their stocks became too expensive and didn't factor in risks as much as was needed. There are a number of startups in the online lending space that have popped up, and traditional banks are also angling to get a piece of the action. And while Lending Club and On Deck have been lauded for opening up credit to underserved customers, there are regulator risks to the alternative lending space. Fortune
Around the Water Cooler
• Can the masses save Greece?
Can a crowdfunding project step in and solve a budget quagmire that major European nations and international aid organizations have failed to address? Thousands of people have rushed to contribute money to an Indiegogo "bailout fund" that was the brainchild of a British man who thinks regular citizens can succeed where others have failed. Fortune
• Donna Karan leaves her company
Donna Karan has announced she is leaving her fashion business to focus on philanthropy, with the fall 2015 and resort 2016 collections to be the last by the company under her creative direction. Interestingly, there is a potential management lesson to be learned for investors that back major fashion brands linked to one major figure, such as publicly traded Michael Kors and privately held Tory Burch. Karen has no successor and the collection will be suspended while the company reorganizes. Washington Post
• Phil Knight to step down as Nike chairman
Nike co-founder Phil Knight is stepping down as chairman of the sports gear maker next year, though the businessman says he wants to stay involved with Nike after leaving that role. He has appointed his 41-year-old so Travis Knight to the board as part of his leadership announcement. He also said he wants CEO Mark Parker to succeed him as chairman. Fortune
