The Internet of Things Explosion: Will Policymakers Dampen or Fuel it?
Ever heard of the “Internet of Things” (IoT)? If not, you’re in good company. Even if you don’t know the term, you are likely familiar with some of the products that comprise it: the Fitbit you’re wearing, your neighbor’s security system that he controls with his smart phone, and the fancy new trash cans downtown that communicate with municipal workers when they need to be emptied. The IoT refers to the devices or gadgets that connect to each other through the Internet to provide benefits like data analysis, efficiency and convenience.
The IoT trend is rapidly growing – all of the varying estimates of its potential are impressive:
- The global IoT market is growing at a compound annual rate of 17%
- Every second, 127 things are added to the Internet
- By 2020, Internet-connected devices will double to 50 billion.
- The global market for IoT will reach $1.7 trillion by 2020
- The global market for connected consumer devices will reach $88 billion in 2020.
For businesses, adopting new technologies is often a path to growth. Analyses of the rate of IoT adoption among businesses vary, but executives seem to agree on the potential for growth. According to an Accenture study, 87% of execs believe the IoT will deliver long-term job growth and 57% predict associated long-term revenue growth.
IoT Policy Questions
The promises of the IoT all sound pretty good: greater efficiency, more data for analysis, better health outcomes, safer homes and driving conditions, smarter cities, streamlined manufacturing…the list of benefits grows with each technology developed. So, what are policymakers worried about? Largely it’s the same concerns that crop up in most technology debates: how to protect consumers while encouraging technological and economic progress.
- Security: What if hackers compromise a device to wreak havoc and threaten safety or steal valuable data or personal information?
- Privacy: There’s a lot of data being exchanged by the IoT, including a lot about personal health and habits. What assurances do consumers have that their information is not being misused or used without their consent?
- Infrastructure: Spectrum is needed for wireless transmission among devices and spectrum is a finite resource. Is enough being allocated to the right uses? (See blog: Five Broadband Issues Being Debated in Washington)
- Skilled Workforce: To remain a leader in the IoT revolution, the United States needs a skilled workforce, including foreign workers. How do we attract and train a workforce to support innovation?
- Liability: Who owns what and where will the blame lie if things go awry?
How Will the Government Respond?
Clearly there are a few good policy-related questions about how to foster this innovation while protecting against unintended consequences. Who in government is or should be offering solutions? The answer to that question is everyone and no one. Everyone because you could find some jurisdiction over parts of the IoT in about 25 different Federal agencies and among even more congressional committees, according to a recent Politico analysis. And, no one because all of this is pretty new and the Federal government currently appears to be in a learning mode.
On some level, a handful of policymakers recognize that the IoT could be BIG, and the government is not well structured or organized to manage it, so coordination is required (not necessarily a government strength). There is some activity. The President received a report from an advisory committee, Congress held some hearings, and some House Members formed a (small) IoT caucus. The Senate even passed a resolution (S. Res. 110) about the IoT to “promote economic growth and consumer empowerment.” In the executive branch, while the FAA and NHTSA are looking separately at specific IoT issues related to drones and automation in vehicles, respectively, the FTC has been monitoring the IoT more generally. (See blog: Implement Best Cybersecurity Practices: Avoid FTC Enforcement)
A look at Congress’ agenda reveals a number of legislative efforts have the potential to affect the IoT, but in a non-specific way, and perhaps a tech-neutral approach is best. Some would suggest the government stand down for now (most would acknowledge that the government isn’t particularly good at technology nor is it particularly agile or adept at keeping up with the leading edge of trends), and let industry work to develop best practices, perhaps in public-private partnerships. In fact, there are some industry efforts to develop frameworks and guidelines. But you can be certain if disaster strikes, the IoT explosion will light a bigger fire under policymakers who will feel compelled to react.