By 2020, it is estimated that there will be 50 billion devices connected to each other. A recent report by the McKinsey Institute, meanwhile, calculates that the potential economic impact of having “sensors and actuators connected by networks to computing systems,” otherwise known as the Internet of Things (IoT), could be as high as $11 trillion a year by 2025.
By then, the IoT could be present in almost every aspect of our daily lives, from our homes, cars and offices to hospitals, shops and factories.
However massive the opportunity of this digitally transformed world – where self-driving cars and smart homes are the norm – there are also significant challenges that stand in the way of its potential being realised. Where will the investment come from? How can consumer trust be established? How will the industry be regulated? What about privacy? These are the questions the pioneers of the Fourth Industrial Revolution will need to answer.
“I prefer to call it the Internet of Everything,” says moderator Robert Smith, and some people think it could actually be one trillion devices that are connected to each other by 2025. We need not end up where technology takes us, but make sure it takes us where we want to go. But this connectivity of devices and sensors gives us the ability to understand our world better, predict what we’d like to happen and then drive resources towards it.
“We’ve become an application economy,” says Michael Gregoire. You want to reach customers? Do it through an app. And with our economies moving as quickly as they are, we need to make sure we can react quickly. The days of groups working on different projects are gone. Now you do it together and you get customers involved straight away.
There is no doubt that the world has changed, says Michael McNamara. The environment is now about speed – how do you get products to market faster? Companies are being forced to collaborate. If you make washing machines, for example, and now you want to connect it to the internet, you are entering a space that is foreign to you.
To be successful, you have to find partners to collaborate with you.
The IoT could lead to improved social inclusion, argues Andreas Raptopoulos. There are close to 1 billion people who do not have access to roads, he says, and it’s unreasonable to expect them to wait decades for infrastructure to catch up. Meanwhile, we are becoming a more urban world and more and more people will be living in cities in the near future, but in some cities infrastructure is still very poor. So we need to find solutions to connect these people and make their lives easier.
Everyone has fallen in love with the term Internet of Things and the technology involved, without understanding what it really means, says T. K. Kurien. Ten years ago, if you wanted to introduce a product, you did the research, built your product over 1-2 years and started shipping it out.
Now, you design a product that may stick around for 10 years, but everything else behind it is driven by software. The iPhone and other smartphones are obvious examples of this.
If business leaders don’t rewire their companies to think in this way, there won't be an Internet of Things.
What about safety?
How can we protect customers from devices that are controlled by algorithms?
“There is no such thing as a secure system,” says Raptopoulos. As we give access to devices around us, from drones to thermostats, we need to make sure they cannot be easily hijacked. There will be a learning curve before we make them robust, but we’ll learn.
The obvious issue with drones is preventing them from endangering airplanes. There are solutions for this, says Raptopoulos. Drones stay at low level, where airplanes don’t fly, and companies are working with NASA, Google and Amazon to figure out a way to map out this segment of airspace.
What about when they fly above homes, and children playing in the street? Drones can automatically shut down if they sense a problem, deploying a parachute and floating safely to the ground. Innovations like these will keep people safe.
The role of government
The business market – such as logistics - has huge potential, says T. K. Kurien, but right now we are not getting the most out of data because it is not connected.
Some governments – like Singapore - are way ahead of everyone else. They publish their traffic information, so if you want to use it to build an app, you can.
We need to be allowed to do a lot of experiments to see what will work, says Raptopoulos. Thankfully, governments get this.
Should there be an Internet Bill of Rights?
The digital economy is already run by consumers, not industry, says McNamara – just look at the likes of Airbnb and Uber.
Trust is a demographic thing, says Kurien. Ask a kid about privacy and they will tell you they don’t care as they are looking for instant value. But this will change as they get older.
To be relevant, argues Kurien, everyone needs programme language skills, algorithm knowledge and database skills. But when young people finish their education and enter the workforce, we literally have to retrain then straight away. It’s a perfect storm.