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Realizing the Internet of Things: a Framework for Collective Action White Paper Realizing the Internet of Things: A Framework for Collective Action In collaboration with the Massachusetts Institute of Technology January 2019 World Economic Forum 91-93 route de la Capite CH-1223 Cologny/Geneva Switzerland Tel.: +41 (0)22 869 1212 Fax: +41 (0)22 786 2744 Email: [email protected] www.weforum.org This white paper has been published by the World Economic Forum as a contribution to a project, © 2019 World Economic Forum. All rights insight area or interaction. The findings, interpretations and conclusions expressed herein are a re- reserved. No part of this publication may be sult of a collaborative process facilitated and endorsed by the World Economic Forum, but whose reproduced or transmitted in any form or by any results do not necessarily represent the views of the World Economic Forum, nor the entirety of its means, including photocopying and recording, or Members, Partners or other stakeholders. by any information storage and retrieval system. Contents Foreword 5 Executive Summary 6 Rethinking Business and Government in an Era of IoT 8 An era of convergence 8 The risks of IoT 8 Five Pillars Shaping the Development of IoT 9 Architecture and standards 9 Security and privacy 9 Shared value creation 9 Organizational development 9 Ecosystem governance 9 Key Challenges and Opportunities 10 Recommendations 15 Conclusion 17 Contributors 18 Annex 1: Workshop participants 19 Endnotes 20 Realizing the Internet of Things 3 4 Realizing the Internet of Things Foreword At the World Economic Forum Annual Meeting 2017, global leaders highlighted the development of the internet of things (IoT) as one of the most significant emerging technologies, harbouring the potential for massive societal impact. Recognizing this opportunity, the World Economic Forum, the Auto-ID Lab at the Massachusetts Institute of Technology (MIT) and GS1, the global standards organization, collaborated to help define a path forward while ensuring a shared understanding of the pressing challenges facing the development of IoT. Over the course of 2017 and 2018, the Forum, the Auto-ID Lab at MIT and GS1 organized calls and workshop meetings to gather input, case studies and insights from experts and key stakeholders. Roundtable events were also held at the Forum’s Annual Meeting of the New Champions 2017 and Jeff Merritt, Annual Meeting 2018. Head, Internet of Things, Robotics This White Paper presents the findings and outcomes of this work. It includes a framework for and Smart Cities, analysing the space, the opportunities for impact and the challenges facing the IoT ecosystem. A World Economic series of recommendations are also put forward to help government, the private sector and civil Forum society organizations work together to advance the development of IoT in the public interest. Sanjay Sarma, Professor of Mechanical Engineering and Co-Founder, Auto-ID Lab, Massachusetts Institute of Technology, USA Realizing the Internet of Things 5 Executive Summary The ability to sense the environment, and to formulate and to engineers, including everything from low-power radio- execute an action in response, is central to all vertebrates frequency identification (RFID) to 5G, and the alphanumeric and increasingly so to all things artificial. This is the driving soup in between, whether a LPWAN (low-power wide- force behind the internet of things (IoT). Homes, businesses, area network) or 6LowPAN (IPv6 over low-power wireless governments and systems that deploy sensors, gather personal area networks). data to inform intelligent decisions and respond to the environment can enable a safer, more sustainable, more While connectivity is a key element of IoT, computation and comfortable, healthier and more economically viable world sensors are two other key legs of the stool. The smartphone for humanity. combines all three and has driven a two-pronged revolution. On the one hand, smartphones are the magic wand of IoT fulfils these needs, and the growth expected is IoT, turning dumb objects into smart objects by their very staggering. Gartner predicted that IoT spend in 2016 presence, by adding handy displays and controls where would exceed $2.5 million per minute, and projects 1 needed, and by providing computation at a pinch. Uber, for million IoT devices to be installed hourly by 2021.1 HP example, converts any old car into a connected vehicle that similarly estimates an 18% compound annual growth rate can be tracked and located by a consumer (and vice versa). in machine-to-machine connections, reaching 27 billion by 2024.2 A chorus of predictions by blue chip companies, On the other hand, the cellular industry has brought about such as McKinsey and Cisco, echoes the same message: a stunning commoditization of sensor components – be it IoT will see astronomical growth in the next decade. cameras or gyroscopes, accelerometers or touch displays. Batteries have become more stable, longer-lasting and The rise and expansion of IoT cheaper. Unbundled sensor modules are now easier to embed in other devices such as thermostats and smoke IoT owes its growing potential in recent years to several alarms. Embedded computation packs more bang for the parallel developments over the last decade. buck today. Radio chips are now more ubiquitous. And the growth of RFID brings ubiquitous, disposable sensors much Hard-wired industrial automation goes back over 100 closer to reality. This has snowballed now with the growth years. Over the last 50 years, automation has transformed of other industries, such as autonomous vehicles, robotics, businesses, and the economic, performance, safety and wearables and drones. Suddenly, LiDAR (light detection and quality benefits are well understood. Automation needs ranging) is going solid-state, infrared cameras are becoming connectivity, and modern networking principles entered affordable and galvanic skin response sensors are becoming the industrial realm in fits and starts with the likes of commoditized. the manufacturing application protocol/technical office protocol more than 35 years ago – and later with Modbus, While technologies are enabling to IoT, human capital is Lonworks, CANbus and ethernet – but adoption in heavy paramount. The growth of talent that can manipulate the industries such as manufacturing favoured dedicated various levels of the computational stack, and the hacker/ “hardened” systems due to understandable concerns about maker culture further fuelled by the rise of systems such performance. These systems, meant to control factories as the Raspberry Pi, have made the innovation in IoT an and plants, are referred to as Supervisory Control and Data irresistible force. Few household or industrial products today Acquisition (SCADA). In automotive systems, the CANbus – be it a home lock or a doorbell, a heating, ventilation and standard has dominated and become the foundation for air conditioning system or an elevator – have resisted the on-board diagnostics. However, the incredible advances in inexorable force of IoT-based rethinking. These innovators sensing, networking and data analysis currently occurring in are now bringing their unconventional ideas back to more home automation and consumer applications is only slowly mature industries – such as industrial automation and affecting the industrial world. But that change will accelerate vehicles networking. Tesla, for example, supports CANbus, tremendously in the years ahead. but really uses in-vehicle ethernet, enabling a more flexible IoT approach. Many advances recently have been driven by consumer demands for voice and data, combined with innovator So, while automation is not new, it is the amorphous, demands for ad hoc data networking – such as, say, a pervasive (and often publicly) connected, ad hoc, flexible sensor and actuator system for watering plants in a distributed, easy to design, easy to deploy, easy to greenhouse – and have led to new paradigms in networking, “mashup” and massively commoditized nature of the sensing and actuating outside the industrial automation sensing, computing and actuating enabled by IoT that realm. As is often the case, the “lower” expectations for makes it a new and explosive capability. And it is now performance in non-critical applications have allowed more impacting the industrial sector where it all started. Whether innovation and architectural creativity, leading in the end to a new building or a new oil rig, a retrofitted power plant or a dazzling set of systems and components, at lower costs a retooled manufacturing line, IoT is becoming an inevitable and, in many respects, with better performance. Today, part of the thinking – a lingua franca of sorts. a broad palette of connectivity approaches is available 6 Realizing the Internet of Things IoT is a new design language Computation, or intelligence, is a second capability. Intelligent systems afford a level of customization for the Much has been written about the opportunity created by user’s experience impossible with connectivity alone. Smart, IoT,3 but fundamental questions may confuse the issue connected thermostats can sense usage patterns and in the minds of business leaders. Is IoT a technology suggest alternate heating and cooling schedules that reduce that can be purchased? Is IoT a business practice? A energy consumption. Modern smartphones and voice- communications technology? How might one best think controllable devices can implement new apps and skills to about IoT? Until these fundamental doubts are resolved, make the user’s experience
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