Economic Value and GHG emissions of the residential Internet of Buildings in Finland

Digitalization is a megatrend that is expected significantly to raise productivity across sectors. Among others, buildings and real estates sector possesses untapped economic and resource efficiency potential that may be reached with digitalized solutions. One of the most significant obstacles preventing the potential to realize is the restricted or non-existent sharing of information between buildings and real estate stakeholders. The Internet of Buildings (IoB) provides a solution for enabling the existing potential in buildings and real estates by networking buildings and real estate service stakeholders with information, energy and resource flows.
The study introduces a definition for IoB as “an ecosystem of buildings, users and service providers using smart buildings as an enabling technology”. This research estimates the economic value of IoB in Finnish markets. The economic value is estimated using statistical expenditure data of public and private consumption related to IoB related activities. Since the sector is also the biggest single contributor to the climate change, the GHG emissions caused by the sector are analysed and the sub-sectors contributing most to climate change are identified.
According to the study, the economic value of IoB-relevant consumption is around €70 billion per year, which accounts for major share of public and private consumption. The housing and public welfare services were the sub-sectors contributing the most to the economic value. Energy consumption, including heat, electricity and fuels, although representing a relatively low share of the economic value, accounts for the largest share (37%) of GHG emissions. Thus, IoB solutions and services aiming at energy optimization and increased efficiency have an excellent potential for successful climate change mitigation. The results indicate that the both economic and environmental value of IoB markets offers without doubt lucrative economic opportunities and motivation for digitalization as well as climate change mitigation.