Defining the Uses of IoT
The Internet of Things (IoT) will soon be a daily part of our lives at home, work and at play. The continued advancement and installation of sensors and software will be monitoring our commutes, entertainment, dining, shopping, and health. While the vast majority of this data collection will make life simpler, the concept of the IoT does stoke questions about privacy and security.
Bloomberg reports that global giants such as Cisco Systems, IBM, and Microsoft are leading investors in the industry today. These companies are investing billions of dollars in laboratories designed to supply industrial companies with the ability to modernize their manufacturing, inventory, supply chain and procurement processes in an effort to gain efficiencies while collecting valuable data about their operations, systems, employees and customers. Market researcher IDC says that global manufacturers spent $178 billion on IoT in 2016, while General Electric forecasts the total industrial IoT sector to top $60 trillion in investment within the next 15 years. The next step is for this kind of investment to be targeted at the retail, automotive, energy, and healthcare sectors, which will dramatically affect how many of our daily tasks are completed and monitored. The summary below was evolved from a chart created by McKinsey & Company and illustrates how the IoT will create a new “normal”:
Categories of Use
The McKinsey Global Institute categorizes the applications of the IoT into two broad categories. The first category is Information & Analysis. The goal of firms using the IoT is to gather huge amounts of data on activity, processes, workers, customers and more to make timelier and more educated strategic decisions. The second category is Automation & Control, which through the collection and analysis of data enables machines to adjust automatically to real-time situations. McKinsey further breaks each category into three subcategories:
- Information & Analysis
- Tracking Behavior- Allstate’s DriveWise® program is an example of this; where insurance customers allow the insurer to collect data such as miles driven, speed, starts and stops, commute times and more in exchange for a discount. This data allows customers to be charged based on data that is more accurate than the proxies that have been used for decades, such as age and gender.
- Enhanced Situational Awareness- ShotSpotter is an example of ESA currently being used by police departments, where sensors accurately locate the position of gunshots and alert the responders with exact coordinates of the gunman. For a better understanding of ESA and how they are used in “Smart Cities” read more at “The IoT: Creating Smart Cities.”
- Sensor-Driven Decision Analytics- The ability for a doctor to continuously monitor a patient’s chronic disease and take action based on data received, all without a doctor visit. AirStrip is developing a system that combines numerous data sources and sends key data points to a third-party decision support engine to alert nurses and physicians of patients at risk.
- Automation & Control
- Process Optimization- McKinsey & Co. points to the example in the pulp and paper industry where companies install sensors to continuously monitor and adjust kiln temperature. This process improves product quality, speeds up production, and eliminates the need for operators to intervene.
- Optimized Resource Consumption- Pacific Gas and Electric is installing “smart” meters for residential and industrial consumers so that real-time pricing and usage statistics can be analyzed for better monitoring of energy consumption. With this real-time data, producers and users are able to identify high or low usage times and adjust accordingly to manage demand, expense, and delivery.
- Complex Autonomous Systems- Automatic breaking technology allows vehicles to sense unpredictable conditions and react to them faster than the driver otherwise would.
Loss of Privacy
There is no doubt that the advancements of the IoT create privacy and security concerns. With continuous monitoring and data collection, populations are exposed to greater harm from system malfunctions and predatory hackers. Additionally, companies collecting this data will need to decide how to use the information without infringing on consumer rights. Companies like Facebook, Google, and Starbucks have been collecting and analyzing customer trends and preferences for years. With the development of the IoT, mobile phone cameras, drones, digital assistances, and other technologies, it is anticipated that every action will be collected and analyzed. This reality may make us all feel like celebrities, where nothing is private anymore. The good news is, these technology advancements are sure to make our daily tasks much simpler.
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