The Growing Impact of IoT: How the Internet of Things is Automating the World

The internet of things (IoT) is playing a prime role in the next Industrial Revolution—Industry 4.0.

In the Industrial Revolutions of the 18th and 19th centuries, new technology such as steam-powered transportation and machines transformed the economy and the structure of society. IoT’s reach includes transportation and machines as well—but it is advancing this equipment with new technology in the form of extremely small sensors that collect and relay data.

The internet of things is a vast network of hardware, software, and applications that interact with one another. In addition to technology like sensors and environmental meters, the “things” can include everyday objects like coffee pots and cars. These objects are equipped with sensors to gather data and internet capability to share the information. It is this ability that makes devices “smart.”

Within a matter of years, industry sources predict that 40 percent of all data produced will come from smart devices’ sensors. According to studies, there are already hundreds of millions of networked sensors across transportation, utilities, and the industrial and retail sectors. These sensors might not be noticeable, but they are revolutionizing the world.

Analysis of the information collected by smart devices solves problems large and small—from environmental challenges to everyday inconveniences. IoT technology helped save the Iberian lynx species from extinction via geolocation trackers and remote monitoring with drones. On a smaller scale, little tracker devices can be attached to ordinary objects, like keys or smartphones, to avoid misplacing them. Across the world, across disciplines, across species, connected technology is improving lives.

A Vast Market for Smart Products

Gartner predicts that by 2020 there will be 20.8 billion smart devices, and McKinsey estimates the total internet of things market size will grow to $3.7 trillion within that same time frame. With so much data being recorded, there is strong demand for platforms that serve as the bridge between sensors and the web of data; some companies are tapping into this major source of potential revenue by operating as IoT service providers. This market is highly consolidated, with the top 20 IoT service providers accounting for about 80 percent of the market, according to some industry estimates.

Major organizations as well as startups are developing technology, from platforms to devices, to capitalize on IoT’s potential. In 2014, Google acquired Nest Labs, maker of the popular smart thermostat Nest, for $4 billion. In 2015, Apple launched its first smartwatch to much fanfare. Likewise, countless startups have leveraged smart technology, in sectors such as consumer goods, software, and health care.

Despite the mixed success of some ventures, investment continues to grow as companies anticipate interest in IoT products will strengthen. General Electric, for example, invests in startups, earning it recognition as a top digital health investor. GE also develops its own IoT technology; it partnered with Cisco to provide a software suite for manufacturers that aims to optimize machine performance.

Regardless of company size or resources, the internet of things has become a priority for many, and its expansion will engender still more organizations focused on smart products.

Residents and visitors of smart cities experience enhanced quality of life. Seeing real-life benefits of smart technology, an increasing number of metropolitan areas have invested in their own IoT networks. This investment is expected to continue to grow rapidly.

Your Future Home

Although the top users of smart technology are businesses and governments, consumers still play a large role. The IoT devices that arguably get the most media attention are consumer-focused products—specifically, wearables, autonomous cars, and smart homes.

Smart homes feature a network of devices that automatically follow preset rules and can be remotely accessed (typically through a mobile device app). Many smart-home products are already on the market, progressing toward the futuristic houses envisioned in past sci-fi movies. There are smart lights that learn your schedule and turn on and off accordingly, refrigerators that take inventory and add items to your shopping list, and coffee pots that automatically start brewing when you wake up.

In the near future, homes will get even smarter and more connected—a wearable that tracks the pattern of your heartbeat will sync with your house to recognize you and adjust to your preferences, from lighting to temperature to music.

Although the smart-home concept has been slow to gain traction among consumers, about 26 percent of U.S. internet users now own a smart-home device. There is definite consumer interest in connected-home products; Notion, a sensor that allows you to monitor your home remotely, ranked as one of Kickstarter’s top campaigns by generating over $280,000 in revenue in just 30 days.

The main purchase barriers for smart-home products are price and data security. Many consumers understand the benefits these products offer, but cannot justify the cost. As prices decrease, smart devices will be more widely adopted.

Security is another major concern for consumers. Reports of hackers controlling automated cars and intercepting data from connected devices cause potential customers to hesitate. Nearly half of Chinas said they were “very concerned” about the possibility of hackers stealing private information from smart homes.

IoT security is critical in every industry. Organizations are taking measures to protect sensitive data through security platforms and encryption. At the rate the volume of digital data is growing, securing it will become ever more important.

Since the internet of things is still in the development stage, there is exciting progress but also uncertainties. IoT will help solve problems and improve the quality of life for those who adopt it, but developers and engineers must continue to push the technology to ensure its stability and the security of its users.

This is a featured story from the China Metal Parts Journal. Download the full PDF version here.

Sources: Britannica, Visual Capitalist, Zinov, University of Indiana, Gartner, McKinsey & Company, Wall Street Journal, Tech Radar, Fortune, General Electric, Harvard University, Business Insider, Wired, Economist, Notion, PwC, Yahoo! Finance