< Back

Share |

A smarter world?

Smart technology is a big umbrella term which is difficult to define. While some smart technology really does have the ability to learn and adapt, that is certainly not true of all technology which is generally thought of as 'smart'. Key components are usually that the technology is connected to the internet, it is interactive and that it generates data.

February 2017

Big Data and the Internet of Things (IoT); two of the hottest topics in the tech world. Is this a productive symbiosis or an evil twins situation? Conducting a cursory google search (adding to the estimated 58,000 google searches per second), suggests around 2.5 Exabytes (an Exabyte is 1bn Gigabytes) of useable data per day are being generated, much of which is attributable to smart technology. This statistic has, however, been knocking around for a couple of years so it's probably much more than that. A visit to Internet Live Stats will show in real time how the internet is being used and it doesn't take long to work out that the amount of data will only continue to grow, fed, not least, by the connected devices. Gartner estimates there were around 6.4bn connected devices in 2016. Growth projections have varied wildly and include Gartner's 20.8bn to Cisco's 50bn and Morgan Stanley's 75 bn devices by 2020. Whichever prediction is closest to the truth, suffice it to say there will be an enormous quantity of connected devices generating eye watering amounts of data – IDC estimates the total amount of digital data created worldwide will be 180 zettabytes by 2025.

The clever gadgets which dominate the annual CES trade show get fans of the IoT wildly excited by the possibilities, both about the uses and applications in everyday life – smart mattresses which gently manoeuvre sleepers to stop them snoring, self-watering plants, smart fridges and the like - but also about the ways that the data and metadata generated by these devices can be exploited. 'Back to the Future II' may have got hoverboards as a mass transit solution by 2015 wrong, but it was probably closer to the mark with the impact of connected technology on our lives.

The naysayers are concerned that the data generated from connecting the world will make the sci-fi of 'Minority Report', set in 2054, a reality. Realms of fantasy aside, there are certainly some challenges to the growth of the smart world: some of these are logistical - a lack of suitable infrastructure and investment; some are technical – a lack of common standards to allow interoperability; some are practical – let's face it, nobody wanted to wear Google Glasses; and some are broader issues around trust and privacy.

October 2016 saw a number of high profile websites including the New York times, Spotify and Twitter, shut down for several hours as a result of a distributed denial of service (DDOS) attack. The attack was made possible by infecting tens of millions of IoT devices with malware known as "Mirai botnet" which identifies IoT devices and uses them to carry out cyberattack. The lack of security on these devices which often use default usernames and passwords published online makes them an easy target. The infected devices then sent an overwhelming amount of traffic to a US domain name server, Dyn, causing it to crash. For smart technology to really take off, particularly where it used in critical infrastructure, it will need to become a great deal more secure (See our article for more on privacy issues).

Many sectors are betting on the opportunities outweighing the challenges and are either already making the most of smart technology or are planning to do so in the very near future:

Smart government

A 2016 study carried out by SAS and UK think tank, the Centre for Economics and Business research, suggests that the UK government has seen the biggest sector increase in investment in big data and the IoT and that it plans to increase investment by 21% over the next five years. It goes on to estimate that it could gain benefits of over £74m from efficiencies in fraud detection and over £1,026m from performance management analytics. Some of this will be achieved through data collected by connected devices but, at a more basic level, it is simply a question of data sharing. The G8 countries signed up to an Open Data Charter in June 2013, with a view to opening up government data and making it useable for all. The UK government's midata initiative, backed by leading businesses such as Google, Visa and British Gas, asked voluntary signatories to make consumer personal data available to consumers in a portable, useable format in a standard form. It has not been entirely successful (although has had good take up in consumer banking) but it is likely to be reinforced by the new data portability right in the General Data Protection Regulation which will apply from 25 May 2018. In the meantime, the government continues to add data and apps to the data.gov.uk website and to digitalise services where transactional services meet the 'digital by default' criteria. New technologies like blockchain may also help deal with security concerns around sharing or publicising government data.

Smart cities

By 2020, it is predicted that 60% of connected devices will be devoted to monitoring or delivering energy and the IoT will be used in all areas of infrastructure from smart roads which use technology to regulate traffic flow, smart parking systems which will get all the traffic looking for somewhere to park off the roads quickly, smart street lights, to deployment of healthcare and emergency services. In the UK, initiatives in Glasgow, Bristol and Newcastle are some of those leading the way and the European Commission's Innovation and Networks Executive Agency has launched the Smart Cities Light House project to foster integrated commercial solutions in the field of energy, transport and ICT. The delivery of smart cities depends, of course, on adequate digital infrastructure and connectivity (which is discussed in more detail in our article) and which is a key focus of the European Commission's Digital Single Market project.

Smart transport

It is not just the infrastructure which is wising up. A huge growth area in the smart world is automated vehicles and connected transport solutions. If completely driverless consumer cars are a long way off, far closer are cars which adjust seating automatically depending on the driver, which know not only when the petrol is low but will direct you to the nearest garage, which learn your favourite routes and redirect you if there's too much traffic and which understand the patterns of individual drivers and help them avoid accidents. The most commonly cited advantages of driverless consumer cars are fewer accidents and greater fuel efficiency. The data they generate won't, however, just be used to make the lives of drivers easier, but will also provide useful information to manufacturers. Some changes are even mandated by legislation, for example, by 2018, all cars will be fitted with an e-Call chip which will call emergency services automatically in the event of a collision.

Public transport is another area that councils, governments and environmentalists are hoping will be revolutionised by smart technology. The pioneering transport solution in Helsinki, Kutsutplus (like a public UberPool) was ultimately deemed too expensive and shut down in 2016, but on-demand public transit is being trialled in a number of cities around the world including New York and Paris has just launched its first driverless bus route to link the Gare de Lyon and the Gare d'Austerlitz.

Governments around the world are keen to ensure that the right balance between innovation and issues around safety, liability and data protection is struck. The EC published a Communication on connected cars for Europe in November 2016. The UK has established the Centre for Connected and Autonomous Vehicles aimed at positioning the UK as a world leader in this area and has invested £50m in feasibility studies. In 2015, the UK government published a code of practice for those wishing to test 'driverless' cars in the UK and it recently published the results of its consultation on advanced driver assistance systems and automated vehicle technologies.

Smart homes

Connected home technology is one of the fastest growing areas of the IoT. Nest, the connected home technology company, currently specialising in smart heating controls and smoke alarms, was Google's second largest acquisition at the time of purchase in 2014, costing US$3.2billion and this is an increasingly crowded market with other high profile competitors including Hive, Tado and Honeywell. Smart security, smart thermostats, connected appliances and smart lighting are at the forefront of smart devices in the home which tend to focus on convenience, remote operation and energy efficiency.

Again, while they can bring huge benefits to users, they also have enormous potential to generate and transmit both personal and anonymised data back to retailers which can be of wider use. How much milk do you drink in a week? Is your consumption going up or down? Who is your milk supplied by and so on? This is great news for supermarkets but might be more information than we're comfortable with them having. Not only is there a data protection issue with smart homes but there is also a wider security concern and the prospect of someone hacking into your home, whether as a joke to wake you all up by turning on the lights at 3am, or to bypass your security system, is a real prospect.

Consumer take up of smart home technology has arguably been slower than initially expected but as the technology improves, not least through voice recognition systems like Amazon's Alexa, this sector may be about to take off. New buildings are, however, increasingly being constructed to integrate the smart world, not only by incorporating connectivity but by installing technology to monitor performance and help tackle defects or wear and tear at the earliest possible stage (see our article for more).

Smart fashion

Wearable technology, while not always as fashionable as we may want, has enormous potential. While it's true that Google Glass was not an immediate hit, it is also fair to say that once manufacturers succeed in marrying usefulness with sartorial good taste at a reasonable price, wearables will really take off. Beacon technology and RFID are becoming increasingly widely used in retail, using connected data to enhance consumer experience. An area which is developing rapidly is smart clothing, which includes embedded technology to, for example, monitor heart rate, deliver medication or release perfume. In some cases the textiles even have electronics directly embedded into their substrates.

Smart finance

The use of near field technology devices in payment processing is making contactless payment increasingly popular – it has been successfully adopted by London transport, ending the problem of how to buy a bus ticket when your Oyster card has run out of credit.

Google and Apple are leading the way in virtual wallets. While take up is still relatively low in the USA and UK, virtual wallets have had more success in Japan. The recast Payment Services Directive (PSD2) clears the way for greater take up of digital, electronic or mobile wallets in Europe – both from a consumer and a business perspective. PSD2 offers the chance for third party payment providers to use logins from consenting consumers to provide financial snapshots and facilitate payments to merchants using frameworks such as Faster Payments and will also enhance how smaller merchants can embrace mobile point of sale (mPOS) technology to speed up transactions and reduce costs.

It's not just consumers and retailers who are set to benefit, of course: data collected from smart devices can potentially help financial service providers to provide the best products and inform their investment decisions, whether in relation to consumers or businesses.

Smart insurance

Insurance is another area which will be looking to exploit connected data. By harnessing live data from smart homes, insurers will be able to provide more tailored offerings and make more effective risk analyses. This applies equally to car insurance and, potentially, to health insurance if data protection obstacles can be overcome.

Smart healthcare

From apps which tell you how many calories you're burning, to smart nappies which tell you, well, you know what they tell you, to smart carpets which know if a person has a heavy fall, to remote patient monitoring and medication management, the IoT is revolutionising healthcare. This is both one of the most valuable applications of the IoT and the most sensitive in terms of the data it generates as medical data is sensitive personal data which is more strictly regulated than other types of personal data. The Article 29 Working Party (comprising European data protection regulators) wrote to the European Commission in February 2015, to clarify what constitutes health data precisely because of the growth in its generation and use as smart healthcare takes off and the new General Data Protection Regulation has strict rules on its use.

Smart technology is getting smarter

Predictions for the use of smart technology get wilder as advances in artificial intelligence AI (another hot tech topic) are made. As computers are developed to have increasing capacity to learn by themselves, our smart technology will, quite literally, get smarter although whether or not that is likely to be a good thing in the long run is a matter of opinion.

Governments and regulators are furiously trying to cope with the challenges of the smart world, to assess the threats and opportunities in areas like competition, employment, innovation and privacy. Regulators are keen not to stifle innovation but also want to make sure that individuals are protected. In order to sell the smart world to consumers and feed the Big Data beast, a balance will need to be found.

If you have any questions on this article please contact us.

A smarter world?
Debbie Heywood

Debbie looks at some of the leading applications of smart technology.

"Regulators are keen not to stifle innovation but also want to make sure that individuals are protected. In order to sell the smart world to consumers and feed the Big Data beast, a balance will need to be found."