Here are the leading strategies to create economic value:
- Look at the setting. IoT applications bring potential benefits and challenges to the producers, consumers, and competitors in a particular industry. But taking a broader view—to the city or the worksite or the office in which it will be used provides many more opportunities to measure value.
- Consider interoperability. IoT systems connect products and services, but many IoT systems can be combined to further increase the value to all users. By some estimates, between 40 and 60 percent of IoT applications need to interact with other IoT applications to create maximum value. Remember Metcalfe’s Law?
- Find ways to use IoT data. We are collecting more data than ever before, but that doesn’t mean we’re using it. Specifically, most data is currently used to detect and control problems. Yet, the greatest value of IoT lies in optimizing and predicting future outcomes.
- Connect to businesses. Most IoT applications at the moment connect businesses to consumers; think fitness monitors and self-driving cars. But connecting businesses through IoT applications can create more value by streamlining processes, optimizing systems, and reducing costs.
- Think globally. Currently, IoT generates more value in advanced economies because more systems are used more often, by more users. But the potential in developing economies is huge. With larger populations comes the need for more infrastructure and more business transactions, and the resulting value could be enormous.
- Become a user. Customers of IoT (businesses, other organizations, and consumers) stand to gain the most value from these systems. In this case, knowledge is power. Those who capture the data and use it most astutely will benefit the most.
- Try a new business model. Digitization and data blur the boundaries between technology companies and industrial-era incumbents. IoT is driving companies to change their business model to capture value in non-traditional areas. For example, by using IoT links and data, product manufacturers can offer those goods as a service.
Role of Internet of Things (IoT) in the Digital Economy: Reflection
- Choose one of the following IoT applications: smart home (e.g., smart thermostat, connected lights), connected car (e.g., remote control technology, predictive maintenance), wearable technology (e.g., smart watch, activity tracker), or smart city (e.g., smart parking, waste management).
- Consider the value it brings to each of the following users:
a) a consumer using the product or its data
b) a business using the product or its data
c) a business supplying technology for the application
d) a policy maker creating legislation around data privacy and usage, security, and interoperability
For example, consider smart parking in a smart city.
– Consumers—citizens who live, work in, and visit the city—benefit from smart parking because it saves time. Instead of driving around looking for an available parking space, an app can lead them straight to one.
– Businesses—from retail stores to restaurants and health care providers—benefit because smart parking makes it convenient for consumers to visit them.
– Smart parking benefits business that supply tech because it creates demand for digital products (e.g., smart meters with wireless connectivity) and services (e.g., streamlined financial payments through mobile apps.)
– For policy makers involved in city planning, the detailed data on parking is valuable to better understand the patterns of movement in cities as well as to explore dynamic parking rates tied to demand while safeguarding data about individuals.