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It's a Smart World

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It's a Smart World It’s a smart world A special report on smart systems November 6th 2010 SmartsystemCOV.indd 1 26/10/2010 12:07 The Economist November 6th 2010 A special report on smart systems 1 It’s a smart world Also in this section A sea of sensors Everything will become a sensorand humans may be the best of all. Page 3 Making every drop count Utilities are getting wise to smart meters and grids. Page 4 Living on a platform For cities to become truly smart, everything must be connected. Page 6 Augmented business Smart systems will disrupt lots of industries, and perhaps the entire economy. Page 8 The IT paydirt Who will clean up? Page 9 The real and the digital worlds are converging, bringing much greater eciency and lots of new opportunities, says Ludwig Siegele. But is it Your own private matrix what people want? Tracking your life on the web. Page 10 HAT if there were two worlds, the many places at once and is often not un• Wreal one and its digital reection? The derstood for what it is. It is most advanced Sensors and sensibilities real one is strewn with sensors, picking up in controlled environments. For example, A smarter world faces many hurdles. Page 11 everything from movement to smell. The software developed by Siemens, a technol• digital one, an edice built of software, ogy conglomerate, maintains virtual repli• takes in all that information and automati• cas of factories to monitor and recongure Horror worlds cally acts on it. If a door opens in the real them. But it is spreading everywhere and Concerns about smart systems are justied world, so does its virtual equivalent. If the has developed a language all of its own. and must be dealt with. Page 13 temperature in the room with the open Glen Allmendinger of Harbor Research, a door falls below a certain level, the digital consultancy, calls it the virtualisation of world automatically turns on the heat. the real world. Researchers at MIT’s Me• This was the vision that David Gelern• dia Lab who connect real•life objects with ter, a professor of computer science at Yale copies in Second Life, a virtual world, refer University, put forward in his book Mirror to the result as cross reality. Google’s Worlds in the early 1990s. You will look Earth and Street View services are the rst, into a computer screen and see reality, he if static, replicas of the entire world; sen• predicted. Some part of your worldthe sors placed in cows allow the tracking of town you live in, the company you work their every move from birth to abattoir; for, your school system, the city hospital smart power meters tell utilities in real will hang there in a sharp colour image, ab• time how much electricity is used. stract but recognisable, moving subtly in a Acknowledgments Besides those cited in the text, the author would like to thousand places. The many uses of smartphones thank many others for their time, ideas and kindness Even two decades later that sounds like Yet it is the smartphone and its apps during the preparation of this report. They include Bruno science ction. But this special report will (small downloadable applications that Berthon of Accenture, Eric Clementi of IBM, Tom Davenport of Babson College, Peter Elliott of PA argue that Mr Gelernter was surprisingly run on these devices) that is speeding up Consulting Group, Scott Gnau of Teradata, Jeanne Harris prescient: mankind is indeed building the convergence of the physical and the of Accenture, Chris King of eMeter, Michael Liard of ABI more and more mirror worlds, or smart digital worlds. Smartphones are packed Research, Michael LoCascio of Lux Research, Edzard Overbeek of Cisco, Joachim Schaper of SAP and Elisabeth systems, as they are often called. The real with sensors, measuring everything from Zornes of Cisco. and the digital worlds are converging, the user’s location to the ambient light. thanks to a proliferation of connected sen• Much of that information is then pumped A list of sources is at sors and cameras, ubiquitous wireless net• back into the network. Apps, for their part, Economist.com/specialreports works, communications standards and the are miniature versions of smart systems activities of humans themselves. that allow users to do a great variety of An audio interview with the author is at This convergence may not be instantly things, from tracking their friends to con• Economist.com/audiovideo/specialreports discernible, because it is happening in trolling appliances in their homes. 1 2 A special report on smart systems The Economist November 6th 2010 2 Smartphones are also where the virtual platforms for sensor data. and the real meet most directly and merge Governments, too, have jumped on the into something with yet another fancy bandwagon. Many countries have been name: augmented reality. Download an spending large chunks of their stimulus app called Layar onto your smartphone, packages on smart•infrastructure projects, turn on its video camera, point at a street, and some have made smart systems a pri• and the software will overlay the picture ority of industrial policy. The internet of on the screen with all kinds of digital infor• things, another label for these systems, is mation, such as the names of the business• central to the European Union’s Digital es on the street or if a house is for sale. Agenda. The main contenders in this mar• These and other services are bound to ket are countries that are strong in manu• grow together into what Jan Rabaey, a com• facturing, above all Germany and China. puter scientist at the University of Califor• But the bandwagon is not just rolling for nia at Berkeley, grandly calls societal in• the benet of technology companies and formation•technology systems, or SIS. ambitious politicians. It has gained mo• Technological progress is sure to supply mentum because there is a real need for the necessary components. Moore’s law, such systems. In many countries the physi• which holds that the processing power of a cal infrastructure is ageing, health•care alone were just 5% more ecient, it would single computer chip roughly doubles ev• costs are exploding and money is tight. Us• save greenhouse emissions equivalent to ery 18 months, applies to sensors, too. ing resources more intelligently can make 53m cars, calculates IBM. In 2007 its con• More processing power and better con• taxpayers’ money go further. Monitoring gested roads cost the country 4.2 billion nectivity also allow the construction of patients remotely can be much cheaper working hours and 10.6 billion litres of computing systems capable of storing and and safer than keeping them in hospital. A wasted petrol, according to the Texas Tran• crunching the huge amounts of data that bridge equipped with the right sensors can sportation Institute. And utilities around will be produced by these sensors and oth• tell engineers when it needs to be serviced. the world lose between 25% and 50% of er devices. All over the world companies China is a good example. It is becoming treated water to leaks, according to Lux Re• are putting together networks of data cen• urbanised on a scale unprecedented in his• search, a market•research rm. tres packed with thousands of servers, tory. By 2025 an additional 350m Chinese With so much to gain, what is there to known as computing clouds. These not more than the current population of the lose? Privacy and the risk of abuse by a ma• only store data but sift through them, for United Stateswill have moved to cities, levolent government spring to mind rst. instance to allow a smart system to react according to a study by McKinsey, a consul• Indeed, compared with some smart sys• instantly to changes in its environment. tancy. Without an infrastructure enhanced tems, the ubiquitous telescreen monitor• by digital technology it will be very hard to ing device in George Orwell’s novel 1984 The next big thing provide the country’s newly urbanised seems a plaything. The book’s hero, Win• Information•technology (IT) rms have population with enough food, transport, ston Smith, would soon have a much hard• identied smart systems as the next big electricity and water. er time nding a corner in his room to hide thing. Predictably, the most ambitious de• Most important, smart systems may from Big Brother. signs have been produced by the indus• well be humankind’s best hope for dealing Second, critics fear that smart systems try’s giants, particularly IBM, where Sam with its pressing environmental problems, could gang up on their creators, in the way Palmisano, the rm’s boss, made smart notably global warming. Today power they did in The Matrix, a 1999 lm in systems a priority. A couple of years ago grids, transport systems and water•distri• which human beings are plugged into ma• the company launched a campaign called bution systems are essentially networks of chines that simulate reality to control hu• Smarter Planet, touting digital technol• dumb pipes. If the power grid in America mans and harvest their bodies’ heat and ogy that would make energy, transport, cit• electrical activity. Fortunately, such a sce• ies and many other areas more intelligent. nario is likely to remain science ction. But Other rms have followed suit, each with The way to go 1 smart systems might be vulnerable to mal• a di erent take reecting its particular Total worldwide internet-enabled-device revenues functioning or attacks by hackers. strengths. $bn Third, some people fret that those with Cisco, the world’s biggest maker of net• Industrial Energy Buildings access to smart systems will be vastly bet• Transport Consumer/ Other working gear, is trumpeting Smart+Con• professional ter informed than those without, giving nected Communities.
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