Instagram, Facebook and Pinterest are so January 2013.
The newest hot trend is the Internet of Things, as it's commonly called, in which machines are wirelessly connected so they can talk to one another, observe their surroundings and make decisions on the fly.
A great example is the Google car, which collects data from its surroundings so it can drive with no human input required. And it's experienced no crashes, either, even after the test car drove 300,000 miles!
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Want to improve efficiency? Slap a chip on anything—wind turbines, subway cards, even patient wristbands in the hospital—and you get real-time monitoring of conditions, traffic and flow of people. Managers and statisticians can look at data coming in and make better decisions about where to allocate resources, which saves time and money.
This is all extremely exciting for engineers and data-heads, plus companies like IBM, GE, Cisco and Hitachi, which are all aggressively researching and rolling out this technology. But what will all this automation mean for our pocketbooks, the economy and our job prospects?
Depending on who you are, you should be very excited, very worried or both.
In Singapore, lauded as one of the most innovative cities in the world, residents use a card designed by IBM called e-Symphony to pay for road tolls, buses, taxis and the metro. The cards collect and send data back to city planners, who can actively tweak routes to relieve traffic congestion and speed residents to their destinations. A year ago, Korea rolled out waste bins fitted with radio frequency ID chips (RFIDs) that charge residents for the amount of waste they generate, with the hopes of incentivizing people to produce less waste.
Meanwhile, cities across the U.S. are putting data on crime, accidents and public transportation on the internet, so enterprising programmers can build helpful apps around them. In New York, for example, the Bus New York City app picks up data from buses to tell you when the next one will arrive at your stop.
For some years now, experts in the U.S. have been calling for a smart energy grid, which would actively monitor the flow of electricity across cities and react in real time to prevent power failures. (Some speculate that a smart grid could have prevented the 25-minute Super Bowl blackout earlier this year.)
What It Means for You: Some people worry about privacy and governmental control, if the authorities can track your activities, from which roads you ride on to how much trash you throw out. Setting that aside, some smart city technology could benefit the economy. Namely, the task of upgrading to a smart electric grid could generate 280,000 jobs, according to a 2009 report. Implementing the smart grid will require at least $338 billion in upfront investment, shouldered mostly by the systems that distribute electricity to households. Consumers would likely pay an extra $9 to $12 a month for their electricity bill.
It would probably be a worthwhile investment—a smart grid is projected to lead to savings in the trillions because of better energy efficiency, plus a decrease in costly power outages. Consumers would save because they use less electricity, but many of the benefits would go to power companies, as this would increase their efficiency and profitability. Questions remain about how a smart grid would be implemented: If the costs are passed down to the consumer and it turns out to be a failed experiment, some critics wonder whether consumers will be the ones bearing the brunt of the monetary risk.
There are already inventions to alert you via your phone if your milk turns sour or if your basement floods. You'll soon be able to program your lighting from your smartphone, or let your kids in the house when you're away from home. There's even a project in the works to produce robotic walls that sense social interaction and move around to create new rooms. (OK, that's a little scary.)
What It Means for You: Smart homes promise to lower your costs and benefit the environment. For example, smart homes would let you program your thermostat to react to your movements and shut off when you don't need it. This would save you money on energy costs. Plus, because you'll be able to remote lock your house and be alerted when you're on vacation if something is moving inside, you'll be better protected from burglars.
Since most of the tasks these smart machines will replace are in-home chores, a smarter home could only be beneficial to employment, by freeing you up to be more productive and creating tech jobs at innovative companies. There are a few jobs which could go the way of the buggy whip, though, like key-makers and meter-readers.
In addition to the Google car, there are others in the works from companies like Volvo, Nissan, GM, Ford, Toyota and BMW, which are also experimenting and hope to have driverless cars on the road in the next decade.
Currently, Google cars use GPS, radar and a 3-D mapping camera on the roof to "see" traffic signals, lanes and pedestrians, and steer accordingly. If public Wi-Fi happens, driverless cars could communicate with other cars, even linking up in caravans to save on wind drag.
What It Means for You: Imagine climbing in your car and reading a book or having a meeting while you were whisked to work. This would save the average commuter 250 hours a year in wasted time. Your car would drive more efficiently and "look up" nearby parking spaces, bringing down your gas bill. Fortune surmises that car owners might not even need insurance anymore—it would be software programmers at fault in accidents instead. Plus, no more drunk driving.
The flip side, however, is that truck drivers, bus drivers and all other paid drivers could lose their jobs. Already, the mining company Rio Tinto is employing driverless trucks for transporting ore.
In hospitals, it's all about RFID chips, which can be embedded in patients' identification bracelets and in beds to collect data on the flow of patients through a hospital. Data can help a hospital prepare for the ebb and flow of traffic during a day or year, based on historical models. New York City's Mount Sinai currently employs this technology and stands to save $120 million a year and treat 10,000 more patients.
Other exciting innovations include smart infusion pumps, self-cleaning rooms and a touch-control monitor (which would replace whiteboards) where nurses can view real-time updates. Smart systems can also display patient information on bed tablets and track the movements of attending nurses.
What It Means for You: While expensive, these smart systems could improve patient care, save time and increase accountability at hospitals by leaving behind a trail of data. Although some may decry the emphasis on efficiency over personal touch, smart tech in this field shouldn't displace employees the way it might in other industries. Machines can't replace nurses and doctors, who will still be needed in this new, smarter hospital. Instead, the technology can help them work more efficiently and avoid mistakes.
The Bottom Line
The Internet of Things accelerates what has been happening since the Industrial Revolution: machines replacing human workers. "The role of tech seems to keep encroaching on what humans previously did," says Thomas H. Davenport, a visiting professor at Harvard Business School and author of the forthcoming book, “Keeping Up With the Quants."
"Things will be tough for anyone who has a manual labor role," he says. "Unless we find something else for all those people to do, it will be a big problem for society."
What the Internet of Things won't replace is expertise; it will just empower people to make better decisions. For example, smart transit can provide data to city planners, but city planners still need to digest that data to do their planning. The result is that machines will replace manual laborers at the bottom of the totem pole, and the money saved will go into the pockets of analysts, statisticians, mathematicians and CEOs, who must parse the flood of data and decide how to deploy it.
A report last year by the McKinsey Global Institute projected that the U.S. will need 140,000 to 190,000 more workers with “deep analytical” expertise and 1.5 million more data-literate managers. The world also needs programmers to build these data processing systems and algorithms.
There's also some very real concern about security issues. With all this data pinpointing your location—whether because you're using a transportation card, traveling in your driverless car or being checked into a hospital—there's the ever-increasing chance of your privacy being compromised. And don't even get us started on the singularity.
Whether our economy can further adapt to the rise of smart machines is still in question, but one thing is certain, according to Davenport. "This is an unstoppable trend."
Image credit: Flickr/Trevor Pritchard