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This blog was originally published on Forbes.
From Bosch (one of our collaborators) to Vodafone, more and more companies are shifting from the Internet of Things (IoT) to the Economy of Things (EoT). I believe that this promises a tectonic shift for businesses, which increasingly leverage connected devices for their daily operations.
As always, there's no time like right now to start adapting, but to do so, it’s vital to wrap our heads around it first. In this piece, I'll be explaining the Economy of Things, outlining its benefits and challenges, and offering advice on what businesses can do to brace for its impact.
For many, the Economy of Things (EoT) probably rings a bell from the get-go, invoking another familiar concept. Indeed, it represents the evolution of the Internet of Things (IoT), which refers to connected devices exchanging data. But the EoT takes this a notch further: Here, devices exchange not just information but also value.
Examples of common IoT implementations are health trackers and smart appliances like lights or fridges. In the EoT, these devices wouldn’t just record data. They would also sell it on an open decentralized market to anyone willing to pay, from weather services to researchers, all while still performing their main tasks. In sum, the EoT isn't just about devices going from exchanging information to exchanging value; it’s about the implications of that as well.
There are many other examples of this, such as an electric vehicle paying for its charging sessions or a private charging station rented out to drivers when idle. More often than not, such use cases involve blockchain platforms as the digital backbone, providing a transaction layer and a machine identity service to enable interactions between devices from multiple ecosystems. Blockchains, as decentralized networks, are vendor-neutral by design, which enables smooth interoperability for otherwise largely siloed IoT ecosystems.
At the most basic level, outfitting your electric vehicle with a wallet to pay for its charging sessions offers a quantifiable benefit—namely, the few seconds it would have taken you to tap your credit card. However, moving beyond that, we see that smart machines packing digital wallets have a lot to offer to both businesses and private individuals. Here are just a few.
• Additional Revenue Streams And Business Opportunities: There are plenty of ways businesses can monetize their hardware. A brick-and-mortar shop could extract live insights on footfall and traffic from its CCTV camera feed and sell them. A charger service could sell anonymized session data, and a shopping mall could sell live parking availability data to navigation services. The opportunities are numerous.
• Doing More With More Data: With live, insight-rich data as one of the EoT pillars, the transition to this model promises businesses more data flows to work with and more opportunities to extract value from that data. This works well with the ongoing AI boom, as data is the lifeblood of advanced machine learning models helping businesses generate value.
• A More Sustainable Economy: The EoT rewards participation, inclusion and the efficient use of resources and devices. It helps reduce the idle time of available devices, cuts waste, optimizes resource utilization and promotes a sharing economy approach that makes the most out of every piece of connected hardware. This way, it naturally fosters a healthier economic model aligned with many of the UN’s Sustainable Development Goals.
Although the EoT offers many potential benefits, there are some hurdles to consider, too. Besides the legal and compliance ramifications around any blockchain-powered business model, there's also the prospect of automation-induced mass unemployment ahead. Consider this: An advanced tea-picker robot may replace hundreds of human workers, and although it does create a job for the engineer maintaining it, these hundreds are not too happy with that, to say the least.
Although there's no doubt that intelligent machines will create jobs for humans, these jobs would likely be less numerous and would require significant upskilling of the workforce. This is a factor worth considering. And from where things stand now, nothing short of a radically inclusive model in which everyone has a guaranteed stake in the automated economy—not just passively receiving a set income—seems to fit the bill.
There will hardly be a break-out point for the rise of the EoT—the moment when you fall asleep with the good old IoT around and wake up with something fundamentally different. Like with most other things, it will be a gradual transition, moving at an uneven pace in different industries and markets and at varying scales.
Still, there are steps that forward-looking businesses can take today to prepare for the changing tides. First, they should work on upskilling their talent pool and introduce it to the tech stack behind the EoT. Second, they should review their device fleets and map them out for better visibility. Finally, they should look into the existing opportunities for monetizing these devices to generate extra revenue and seek out collaborations with emerging projects that can help them with this transition.
These steps won't likely be enough to jump head-on into the brave new era, but they'll give companies an edge over those that are still waking up to the transition toward the Economy of Things. And, like with any groundbreaking moment, an edge is already good enough to take you places in a world where devices have as much economic agency as people.
