The Internet of Things: Implications, Opportunities and Challenges for the Business World

The internet of things refers to the interconnection of objects across the network. Since its inception and until very recently, the internet connected people with people. However, since the start of the decade, there's been increasing attention on the possibility of connecting objects.

The main interest stems from the immense amount of information that could potentially be gathered from these objects considering that they are far more numerous than people—though there is no agreement about the number of objects that will be connected in the next ten years, the figures cited are always counted in the billions. Furthermore, the larger the number of interconnected devices, the greater the value of the information gathered. The amount of data increases exponentially.

Objects can connect and communicate with each other, but they also serve as sensors that can directly gather information about people. As time goes by, we will have more and more data about human preferences and activities both at the individual and general level. The digital world and the physical world will become increasingly integrated.

The most salient example of this today are smartphones, which have data about where we are, how much we sleep and what music we like. Moreover, this data can be transferred between the phones and other devices so we can receive updated traffic information, program the coffee maker or play music on the car speakers.

The internet of things therefore already plays a significant role in our daily lives, though many of its implications and limitations remain to be seen. Will there come a time when every single object is connected? Would this be useful? Regardless of which objects will be part of this phenomenon, some of the main advantages, opportunities and challenges of this transformation are clear.

The development of the internet of things has led to tangible breakthroughs in specific sectors. It is now possible to diagnose and prevent diseases remotely thanks to the symptom detection capabilities of some applications that are relatively easy to use. Motion-activated lights have helped save electricity in homes and offices. Some cities have decided to interconnect devices in order to improve traffic conditions, surveillance capabilities and control over gas or water leaks. Devices that measure humidity have helped optimize irrigation and crop rotation in order to improve harvest. The flow of information between machines has revolutionized preventive maintenance in many industries.

These successes are due in large part to proper information management. Data storage, processing and analysis are essential for the operation of this new paradigm. There will be many new opportunities. Companies that gather data will need to transform their structures not just from the perspective of investment—in order to process information—but also of organization, so that this data may be analyzed and used for optimizing processes or developing new products.

Additionally, we will need new companies that are capable of analyzing information and linking it with other information gathered by different actors. Since innovation will primarily reside in intangible assets, many of these new actors will be startups with great potential for scaling up that will compete directly against the larger companies that venture into this path.

Another change that will occur thanks to the availability of information derived from the internet of things will be a more efficient supervision of processes which will lead to greater automation and less manual labor. This change, together with the opportunities stated above, will make it necessary to adjust the abilities needed and rewarded in the workforce.

Business models will have to change as well. We will observe a trend for prioritizing integration of data and platforms that connect the needs of several users, and these models will need to take into account certain inescapable challenges posed by the new structural tendencies: how to create infrastructure that guarantees the uninterrupted connectivity between devices, how to optimize the use of energy once everything is permanently turned on and connected, how to get all the systems to interact harmoniously and in what kind of environment, how to provide democratic access to theses devices so the information becomes more useful.

Competition between companies will be harsh, which will encourage the creation of "smarter" products and services that combine information and function in one. Some ideas will start to seem less and less far-fetched, like a chair that adjusts itself to the shape of its user's body—or to the specific type of muscular pain that the user might be suffering from—or a frying pan that indicates the precise amount of oil and the exact cooking time based on the user's nutritional information and caloric needs.

The internet of things, however, will also force us to grapple with the potential harmful effects on humans, mainly in terms of security and privacy. To use the services, users will have to willingly provide more and more information about their preferences and activities, yet there is no guarantee that their data will not be misused.

Cybersecurity is becoming more relevant with each passing day. Any connected device, and the information it contains, is a vulnerability. Therefore, the larger the number of objects connected, the greater the risk. Moreover, democratization of information means that hacking skills are within everyone's grasp.

The battle for security is lopsided: in order for information to be lost or compromised it is only necessary to fail once; on the other hand, those looking to infringe on security need to succeed only once, regardless of how many failures precede the success. The same is true for privacy, since it is only necessary to obtain a user's personal data once in order to ruin her reputation, identity or finances.

Finally, there's the risk that—while many of the effects of the internet of things will undoubtedly spread across the whole world—parts of the technology will only be available for a select few, which will aggravate the disparities between different groups.

Rather than trying to fix a situation once it becomes a reality, it is better to think in advance about how to create an inclusive model that is safe for all. Here lies the key not just for a sustainable future of harmonious coexistence between people and technology, but for profitable business opportunities for all.