Ten years ago there were about 500 million devices connected to the Internet. Today, that number has grown to between 10 and 20 billion. By 2020, there will likely be 40 to 50 billion. Many of these will be devices we are familiar with today: laptops, tablets, smartphones. But far more will be physical objects whose main function, without any human intervention, will be to capture data (typically via sensors) and then transmit it elsewhere over the Internet where it can be stored and analyzed to enable better decision-making.

In short, we will have an Internet not just of computers, but of things. Any thing – even a human body, if equipped with the right electronic parts – can become part of IoT, so long as it can collect and transmit data through the Internet.

The Internet of Things (IoT) is in fact already with us, but it has not yet reached a point where everyone feels its impact. That is about to change. Soon every industry, and virtually every company, will be not only affected, but transformed by IoT. In combination with other developments such as cloud computing, smart grids, nanotechnology and robotics, IoT will usher in a period of greater economic efficiency, productivity, safety, and profits. And its impact on the global economy will be enormous. RAND Europe, for example, puts the global annual economic potential of IoT across all business sectors at between $1.4 trillion and $14.4 trillion.

Two advances have put IoT on the cusp of a breakthrough. One is mobile technology – both mobile devices and the widespread availability of wireless connectivity. The second is the rapidly falling price of sensors. In the early 1990s, a solid state sensor cost $20 to $25. By the end of the decade, it was $5. Prices for sensors of all types have continued to fall.

The typical smartphone, for example, has between five and nine sensors that monitor constantly for such things as ambient light and sound, movement, attitude (via gyroscopic sensors), temperature, humidity, etc. Yet the total cost of all these sensors is less than $5. As prices continue to drop, they will be imbedded in more and more objects that will connect to IoT.

What can inexpensive data-collecting sensors connected to the Internet do for us? As it turns out, quite a lot.

IoT benefits – a few examples

A number of industries are already finding that IoT offers improvements in areas safety, efficiency, data-driven decision making and infrastructure.

One obvious example that is much in the news is the development of autonomous (“driverless”) motor vehicles. The World Health Organization has put the annual number of auto-related deaths worldwide at well over one million. The majority of these deaths are due to human error. IoT technology, especially the rise of safety-focused sensors in automobiles, has the potential to dramatically reduce motor-vehicle related accidents and deaths, especially when embedded in autonomous cars and other vehicles.

In manufacturing, IoT is helping keep workers safe through wearable technology equipped with embedded sensors to warn workers of unsafe conditions (e.g. the presence of toxic gasses) or over-exertion. And IoT devices placed strategically throughout even the most complex global supply chain can give managers deep, real-time insight into any problems, even before they arise.

IoT also enables healthcare workers to keep much closer tabs on patients. Paramedics, for example, can use IoT devices to capture critical patient data and transmit it instantly to the ER, so that by the time a patient arrives, the doctors already have a plan of action in place instead of wasting vital time trying to understand the patient’s condition from the ground up.

Such examples can be multiplied almost ad infinitum. But as always, there is no free lunch.

IoT Risks

From what we can see today, the three biggest risks related to the broad use of IoT lie in the areas of privacy, cybersecurity and liability. 

Privacy concerns and the Internet date back at least to the advent of tracking software or cookies, and the addition of billions more devices constantly monitoring data, much of it personal, will only aggravate these worries for many people, both in their private lives and at work. Since no single federal law governs the collection and use of personal data, it is likely that laws and regulations will continue to evolve that attempt to strike an acceptable balance between the benefits of IoT and privacy-related concerns. 

Cybersecurity is also a risk we are already familiar with and one that is likely to be exacerbated by IoT. Since any node on a network is a potential point of entry for a hacker, overall network security will become an even bigger issue than it is today.

Finally, on the liability front, IoT devices can quickly generate legal and ethical conundrums that no one currently has any idea how to resolve. Just one example: Should a driverless automobile take every action it can to protect its occupants from harm, even if that means “deliberately” harming other motorists or pedestrians? If the car does crash and injures someone, where does the chain of liability start and end? 

The Internet of Things promises enormous benefits to consumers and businesses over the coming years. But to enjoy them fully, we will need to find effective ways to deal with the risks that will ride along with them. 

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