By this point, it’s become rather trite to make sweeping statements about the ever-expanding impact of the Internet. We’ve been hearing it for years. Still, the overcooked notion bears revisiting in light of a pair of new phrases gaining a foothold in the international lexicon of technology. The “Internet of Things” refers to the growing number of everyday objects—from shoes to blood pressure monitors—that are able to connect to the Internet and communicate with each other. Then there’s the “Internet of Everything,” which basically means adding connectivity to—you guessed it—pretty much everything else one desires.
The numbers suggest that neither concept is hyperbolic. In the year 2000, when desktops were still the computer of choice, there were 1 billion devices connected to the Internet worldwide. Then came laptops and all things mobile, and that figure increased tenfold to 10 billion connections by 2010. It’s on track to reach 50 billion units by 2020. There were fewer Internet-connected devices than there were people in 2005, but trend lines suggest there will be 3.5 connected devices per person by 2015 and almost 7 by 2020. At the same time, the number of mobile broadband access points is set to increase to 8 billion by 2019 from 2 billion today, and Swedish communications giant Ericsson predicts that the amount of data sent by the average smartphone will quadruple between now and then.
Cisco Systems, a major player in the space, estimates that The Internet of Everything will generate a remarkable $14.4 trillion in economic value over the next ten years. And whole industries will be shaken up: the medical device industry could see $97 billion in additional revenue by 2024 as more and more devices are online-enabled, according to GSMA, an association of mobile operators. Total sales of clothing and accessories that incorporate computer technology—a market that includes well-known brands such as Google Glass and Fitbit—are on target to grow 70 percent a year through 2018, rising from $3 billion today to $42.5 billion, according to Credit Suisse.
But the real upheaval will come in manufacturing and industrial goods, where experts predict it will soon be the norm to have machines communicating with each other online and generating data that tracks production and helps prevent disruptions. Consider the automotive industry, which already uses machine-to-machine connections for GPS navigation and emergency services. Increasingly, company vehicles will be equipped with tracking systems that allow managers to keep track of their fleets. So-called M2M connections can also help flag and prevent vehicle malfunction. Future models, for example, will be able to self-detect problems such as low air pressure in a tire, and send the driver an e-mail or text message alert.
Governments want in on the action as well. So-called “Smart Cities” are retooling their own communications infrastructure with the aim of better managing of municipal energy, waste and traffic. Tricked-up garbage cans, for example, light up when full to keep trucks from wasting fuel on picking up half-empty containers. Indian Prime Minister Narendra Modi recently announced a $1.2 billion investment to fashion urban centers with sensors that will monitor traffic flows, water and energy usage, and security, and then send that information to city officials. And IBM, which is already using analytics to improve transit systems and snow removal in Minneapolis, has also been hired to install mobile devices in Qatar to improve road maintenance and drainage networks. All told, the smart city applications and services market could grow to $3.3 trillion by 2025, according to consulting firm Frost & Sullivan.
The range of beneficiaries of The Internet of Everything is almost as wide as the list of devices waiting to be hooked up. There’s the obvious opportunity for manufacturers of cutting edge devices, including medical equipment and consumer wearables, as well as the makers of the semiconductor chips and sensors that enable the actual connectivity. Data service providers will obviously see increased demand. But someone needs to process, arrange and analyze all that data as well. Firms that make the software to do so will benefit, as will Internet platform companies that are already well practiced at analyzing and commercializing large pools of data. Finally, increased connectivity will open the door to more hacking and cyber attacks, ultimately generating more business for companies specializing in network security. In other words, there’s something for everyone in everything.
The Financialist is a digital magazine presented by Credit Suisse that looks at the trends and ideas that drive markets, businesses and economies.
