The Growing Demand For Connected Devices And IoT

You can hardly go through a day without being personally in touch with a connected device. Most of us carry a smart device, or own at least one device that is connected to the internet. I'm especially interested in the growing market for connected devices, also known as the internet of things (IoT), given I'm currently employed by a major manufacturer of connected home devices. What is most stunning, is the predicted contribution that the industry of IoT will have on our economy. As the upcoming generation becomes more technology savvy, so is their hunger for devices that intermingle with their everyday lifestyles. Simply stated in an article titled, "Projecting the Growth and Economic Impact of the Internet of Things," it covers insights of several economic impacts of the growing connected world. This ranges from growing efficiencies of a business, to decreasing the cost of healthcare. There is a device available for tracking just about anything these days including your health, productivity, lifestyle, and daily habits to name a few. The enormous amount of money that consumers and businesses are willing to spend on connected devices creates new jobs, and allows those individuals running a business to become more connected to their consumers, their productivity, and improve internal operational efficiencies. Consumer products consist of staying in touch with others, or staying connected with their personal belongings. For example, I'm currently able to remotely check my thermostat, locks, lights, and garage door, all from my smart phone. This gives me peace of mind when I'm away, and in return, I spend my hard earned money to purchase products that give me that connectivity.

In the rush to be the first technology firm to market with a new connected device, there is a risk of being the first-mover in the technology industry. The research and development alone is very expensive to produce a connected device, not to mention the marketing it takes to get the word out promoting the newly invented technology. So if you come out with a device that becomes a hit, you can almost immediately expect copycats to enter the market and bench off the success of the first to market. The only way to combat this, is to create a barrier of entry by applying for a patent that protects the exclusive right to sell a unique product for a given period of time.

So next time you are ready to go to bed, and you turn on that new app on your smart phone that tracks your sleep, know that you are contributing to the emerging market predicted to reach 40 Billion by 2019. Not to mention the predicted overall economic value of $14.4 Trillion by 2025. Now those are some numbers you can't ignore.

Projecting the Growth and Economic Impact of the Internet of Things

1 comment:

Dr. Tufte said...

Chris: 100/100

Here's a plug: take my ECON 6100 (Spreadsheet Engineering Craft) class in the fall. It covers some approaches about what to do with the flood of data most of us face from increasing connectivity. More importantly: it gets much better evaluations from students than this class does. For what it's worth, we have a big data class in the works too, but you'll probably be graduated before that's available. OK, I'm done now.

I wish there was more ManEc in this post. It reads more like pop journalism than economics content. Just saying ... I don't actually take off points for this approach.

So, Chris mentions "growing efficiencies" and "decreasing the cost of healthcare". But where's the economic principle that makes us sure that either is going to happen? Tracking data, by itself, just makes those two things tougher. It's the analysis that might help on both counts, but it isn't always clear it's worth the expense.

Does "The enormous amount of money [we're] ... willing to spend" really create "new jobs"? Or does it just move jobs around?

And Chris is right that there may be a first mover disadvantage (or advantage). But we have that for all technologies, so why is it especially important here?

So really, Chris, this is OK. But I think it's the sort of thing that if you did it as an oral presentation in front of the group ... I'd be peppering you with a lot of questions to get you to tunnel in further.