Disruptive Technology: The Internet of Things

By: The FHE Team

The Internet of Things (IoT) refers to uniquely identifiable objects and their virtual representations on the internet.  It is a nascent technology that allows interconnectivity between the physical and online world. By using an electronic tag to transmit information to a computer, practically any component of life, from humans to seemingly mundane objects, may be represented in a dynamic online network. An example of a popular application of this technology today is in the use of sensors by people to track their exercise performance. The sensors gather relevant data like heart rate, or the distance covered during a run, which can then be consolidated and analysed to monitor health.

IoT applications follow three basic steps. The first is data capture, which, depending on the complexity of the information desired, requires devices of varying sophistication. The second step consists of processing all the data generated to find meaningful information, while the third involves acting on that information. The technology utilized in these steps can range from simple RFID tags that can be attached to just about any object, to complex devices made of multiple sensors and actuators.

The potential impact of IoT technology is staggering. It is estimated that by 2025, the use IoT applications could generate $6.2 trillion per year. The health care and manufacturing industries are predicted to benefit the most, with health care seeing a boost of up to $2.5 trillion per year.1

Be the Ball. Expression to Command.

“Be the ball”. More than an expression in the future.

IoT technology is already being utilized in manufacturing.  A major application is in the use of RFID tags to monitor flow of inventory through a factory or warehouse. By tracking the location of the raw materials or finished products, companies are able to efficiently streamline production and distribution. Glitches in the system can be identified and circumvented early, and inventory tightly managed.

Another application of the technology is in high precision manufacturing. Moving parts in an assembly line can be embedded with sensors and actuators. Using data from the sensors, actuators can continuously realign any parts that deviate from their optimum position. Such real-time interventions can minimize stalling of the assembly line while protecting expensive machine tools from damage.

In health care, IoT technology is predicted to have the greatest impact on the management of patients with chronic diseases. For example, health care professionals may remotely collect information on the blood glucose levels of their diabetic patients. Such monitoring would aid refinements in medication regimens while alerting the health care provider to any precipitous spikes or drops in blood glucose. The real-time collection of disease relevant data would therefore allow emergent intervention, reducing morbidity, and decreasing the need for hospitalization and ER services. The treatment for chronic diseases currently accounts for about 60% of total health care – with the use of IoT applications, this could be reduced by as much as 20%.1

The Internet of Things has significant implications for urban infrastructure, and many cities are now using sensors to aid in the management of various services. This includes energy and water supply, traffic control, and garbage collection.

Smart electrical grids, for instance, reduce costs and make energy production and distribution more efficient. The greatest benefit comes from the enhancement of demand-side management. Networked sensors enable customers to receive real-time information about energy usage and production costs, allowing them to reduce consumption during hours of peak usage when pricing is typically higher. Smart grids also reduce operational costs by continuously transmitting data on the condition of the grid to the responsible utility company. With timely maintenance repairs, electricity wastage decreases and power outages are minimized. Additionally, smart meters also contribute to cost savings by allowing automated power readings that reduce the need for personnel.

In smart water systems, sensors embedded in pipes and pumps allow detection of water leakages.  The technology is already being used in cities like Doha and Beijing to improve water management. At the consumer end, smart meters allow residents to control costs by detecting leaks and monitoring demand. With the use of such smart meters, many cities have reported a 5-10 percent reduction in water usage.

In the US cities of Cincinnati and Ohio, the garbage collection system has seen a cut in operating costs after the introduction of RFID tagged trash and recycling bins. The sensor enabled system has allowed the elimination of redundant garbage pickup routes. It has also made possible the institution of a program that requires residents to pay for excess garbage.

Sensors are similarly being used to streamline traffic. For instance, sensors detecting traffic congestion can adjust and coordinate traffic signals to divert vehicles. They may also issue rerouting alerts to public buses. With the use of this technology, big cities like London and Houston have enjoyed significantly improved commuting times.

IoT technology also has the potential to accelerate agriculture. Sensors can monitor changes in the fertility and moisture of the soil, and the data gathered can be used to optimize the use of ‘drip-fertigation’. This technique involves the application of liquid fertilizer via drip irrigation systems to ensure precise delivery of water and nutrients to crops.

The Internet of Things is overwhelming in the scope of its potential uses. In the future we may very well see automated breaking systems controlled by sensors to prevent collisions. Law enforcement agencies could be utilizing sensors on an expansive scale to counter street crime. Retailers might employ sensors to tackle stock management difficulties.  However, before such technology can become ubiquitous, several challenges will need to be addressed.

First of all, technology providers will need to collaborate in order to improve interoperability between the various components of IoT applications. Data must flow smoothly between data capture devices, computers, and actuators to allow efficient integration within organizations. Secondly, sensors and actuators must become more affordable to allow widespread use. Finally, software must advance to a point where it can effectively process the flood of incoming information from data capture devices.

Along with the technological challenges, the Internet of Things poses a genuine privacy and security risk. As with all technology, the computers and networks used by IoT applications will be vulnerable to hacking. In addition to the danger of consumer data privacy breach, there is the grave risk of criminals gaining access to critical infrastructure, such as the electric grid or the water system.

The Internet of Things holds exciting opportunities for the future, but the technology is still in its infancy. Careful planning and collaboration between technologists, policy makers, and businesses will be required before the benefits of the technology can be fully and safely realized.

As we look into the far future, as far as the future of human evolution and past the point of ironing out the rudimentary aspects of what and how and virtual, this seemingly “new” application of wireless medium using detectors to examine points of data is a precursor to the real-time exchange of perception and experience.  “Be the ball,” as an example, is an oft heard expression of coaches from baseball to tennis.  Soon it will be a command to switch inputs.


McKinsey Global Institute, Disruptive technologies: Advances that will transform life, business, and the global economy, May 2013