The evolution of the Internet of Things

Issue 91: November 2012

Just when you thought the Internet had reached omnipresence come predictions the ‘Internet of Things’ will break into the mainstream in 2013 and be a fundamental aspect to the way we live by 2020.

The Internet of Things, or IoT, refers to the expansion of the net onto physical objects. While the Internet as we know it has primarily focused on connecting people, the IoT allows machines and other objects to describe their ‘status’ to other machines and humans.

From pharmaceutical packaging that reminds people to take their medication to engine parts that inform manufacturers of wear and tear, the IoT covers a diverse set of technologies and offers significant possibilities for businesses in all sectors.

The lure of productivity gains is the ultimate promise of the IoT. Earlier this month a new GE study predicted productivity gains resulting from the IoT could add between US$10 trillion to US$15 trillion to the global economy over the next 20 years.

The lure of productivity

Well known in IT circles for over a decade, the IoT is gaining momentum as a result of two factors: the decreasing prices of sensors that enable devices to capture data, and the ubiquity of wireless networks that allow objects to communicate.

The sensor technology that is fundamental to IoT relays information about position, temperature, light, moisture, motion, pressure or stress to analytics software that crunches the data and reports back to other machines or humans.

This communication takes place via wireless technologies including wi-fi, RFID (radio frequency identification tags), NFC (near field communication) and Bluetooth, all existing services that are primed for further expansion.

Mapping the possibilities

Rather than describing one type of device or technology, the IoT concept encapsulates an almost limitless set of applications with game-changing potential in everything from manufacturing to retail, farming to domestic life.

In a bid to reduce aircraft downtime Rolls Royce is developing jet engine parts that autonomously communicate when early signs of damage occur. In a similar vein, household appliances that explain why they have failed will speed up the repair process.

RFID tags are already changing logistics; their next target is the retail sector. Forget checkouts, with every product in a supermarket tagged, purchasing goods will be as easy as pushing a trolley of items under a scanner.

Home sweet smart home

Domestic life is also being touted as an area of IoT innovation. With every object in a home tagged and connected to respond to environmental changes, the IoT promises an analytical approach to energy efficiency that’s affordable to the masses.

In the future running out of milk may be an unusual occurrence. It’s likely the humble refrigerator will be the first appliance to include technology that senses its contents and acts on behalf of its users by shopping for regularly used products.

And with every vehicle communicating with every other vehicle on the road, the potential exists for your trip to work to be planned before you leave home to avoid traffic congestion.

Privacy, what privacy?

Commentators have described the IoT trend as ‘Facebook for objects’. It’s true that it gives objects the ability to ‘like’ each other and reveal their status; it’s also apparent that, like social media, IoT raises significant privacy concerns.

The question of whether consumers will relinquish an abundance of information about how they live is a potential stumbling block to the Internet of Things.

But just as Facebook and other social media asked us to view privacy in a new way in order to achieve something of value, the payoff of the IoT – less time spend on often tedious tasks – may also prove too attractive to ignore.

Whitespace is published monthly by the Australian Institute of Management - Qld & NT. Sign up to have a copy sent direct to your mailbox.

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The Australian Institute of Management's Whitespace discusses emerging business trends, and represents a 'space to think of the future'. Register now to have this monthly feature emailed to you.