Is it the Next Big Thing, or just a buzzword? Michael Mandel is one booster. Neil Gershenfeld and JP Vasseur are also optimistic. They write,
Countless futuristic “smart houses” have yet to generate much interest in living in them. But the Internet of Things succeeds to the extent that it is invisible. A refrigerator could communicate with a grocery store to reorder food, with a bathroom scale to monitor a diet, with a power utility to lower electricity consumption during peak demand, and with its manufacturer when maintenance is needed. Switches and lights in a house could adapt to how spaces are used and to the time of day. Thermostats with access to calendars, beds, and cars could plan heating and cooling based on the location of the house’s occupants. Utilities today provide power and plumbing; these new services would provide safety, comfort, and convenience.
These don’t sound like big deals to me. I could be wrong. I can imagine that if cities had a lot more sensors and id chips embedded along streets then self-driving cars might sooner become inexpensive and reliable. That would be a big deal.I can imagine that having software-defined radios in all sorts of places you could replace telecoms (some techies have been talking up that idea for 15 years or more). That would be a big deal.
James Pethokoukis talks with Erik Brynjolfsson and Andrew McAfee. Brynjolfsson says,
what matters is the value that we’re creating, not whether a particular metric moves – especially a metric like GDP, which often literally goes in the opposite direction of welfare. When things become free, that can often lead to a decrease in measured GDP, even though it leads to a big increase in welfare. Wikipedia is a perfect example of that. Or take the fact that most people now have, you know, a device that gives them turn-by-turn driving directions. It’s pretty much free with most smart phones. But a few years ago, people were paying hundreds of dollars for a GPS machine. So I think we have to be careful about overreliance on a metric that was never understood to be or shouldn’t be understood to be a welfare metric.
Their ideas for a big deal strike me as more ambitious. Brynjolffson says,
IBM’s Watson is not just a Jeopardy champion. It’s now going to med school. IBM has announced that they’re putting Watson technology up in the cloud; serve that down through the smart phones that are going to be available, as Erik says, to billions of people, honestly billions of people around the world within just a few more years. And you have the world’s best diagnostician available to the majority of the world’s human population. Again, if that’s not an impressive change for our societies, our lives, and our economies, then I’m out – I’m out of answers.
Great stuff, but Brynjolffson is careless with his use of GDP. If GDP “often” goes in the opposite direction to welfare, then we’d be better off in Myanmar or Somalia than in the USA or Norway. Or we’d be better off living in 1914 USA than 2014 USA. I don’t think so.
Moreover, “free” stuff is often bundled. “Free” maps on your iPhone are bundled with the $500 iPhone. I guess what he’s saying is that the pricing structure of things is changing. More bundling, less piecemeal. That, I would agree with. Wikipedia requires a computer and an internet connection. Anyway, nitpicking I suppose.
“These don’t sound like big deals to me. I could be wrong.”
Let me rephrase this in a way that would appeal to an economist’s way of thinking. In 1980, networked computers didn’t sound like a big deal. The direct application to every day life was pretty minor. But it provided a new set of resources to a class of entrepreneurs. Fast forward 34 years, and you can see that networked computers is as important a natural resource as steam was to the industrial revolution.
The Internet of Things (which is a name I hate, but whatever) has the potential to be a similar new set of resources, and the class of entrepreneurs ready to make use of it is larger, more experienced, and better funded.
I predict the first consultant who can actualize the meme The Internet of Big Data Smart Assitant Cloud Social Network Things will become a trillionaire.
We have The Internet of Things in our cars already, but you can’t get anywhere faster or cheaper because of it. You’re safer in these cars, but that’s not why.
My apartment came with one of those much-vaunted Nest thermostats. It’s nice, and has a very impressive UI, but as a device it’s only marginally superior to every other programmable thermostat I’ve had. It’s a better device, but to me it feels very much of an incremental advance, compared to, say, the mass-deployment of air conditioners. And the connection of it to the Internet is, for me, of only the most marginal utility.
I’d like to have my refrigerator online, provided it had a camera I could view from my iPhone so I knew whether I needed to buy more eggs because I don’t recall whether I have any. That might have some utility. My washer, dryer, dishwasher, or stove? I don’t see what there is to gain by connecting those. You load them, turn them on, and wait for the cycle to finish.
A lot of the stories around these things tie back to “smart grid” type concepts, which assume that electricity prices will rise significantly enough to make people want to schedule their laundry or dishwasher to run when power is cheap. That to me sounds an awful lot like Venezuela. And none of this compares remotely to the labor savings reaped by “dumb” automation in the form of the basic appliances.
‘A lot of the stories around these things tie back to “smart grid” type concepts, which assume that electricity prices will rise significantly enough to make people want to schedule their laundry or dishwasher to run when power is cheap. That to me sounds an awful lot like Venezuela.’
Scheduling these appliances to run during low-demand periods is something commonly done in Europe. In Poland the price of electricity varies by a factor of 2 throughout the day, and my parents would never dream of doing laundry except in the low-price periods. (But of course, they don’t need an internet-connected appliance for that, just a regular programmable type.)
Automobiles: the superhighway of things!
These notions are deservedly and iconically mocked here: http://fuckyeahinternetfridge.tumblr.com/