The IoT is already widespread but continues to evolve, with the potential to bs used in new ways, for example incorporating AI.
We cover what the IoT is, some of its applications and benefits, and some of the associated challenges. We also look at why in-house legal teams need to know about the IoT.
What is the Internet of Things?
The Internet of Things (IoT) is usually defined as a collective term that describes the interactions between physical devices that have sensors and connectivity, enabling them to collect and exchange data over a communication network, usually the internet or sometimes 5G. This can usually be done from anywhere and at any time.
Advances in sensors, wireless networking, machine learning and a host of other related technologies have ensured that the IoT has continued to develop. Today, almost anything, from a toothbrush to a suspension bridge, can have an internet connection, with the IoT being used both within our homes and also for commercial use.
The IoT continues to grow and expand. The global total revenue generated by the IoT has been forecast to more than double between 2025 and 2033 with the number of connected devices set to triple.
What is the current use of the IoT?
The Internet of Things is already pervasive and used in many different areas, a few of which are listed below.
Personal use
Personal devices – often which are smart wearables – include fitness trackers, health monitoring devices and more. Some of these are connected via mobile devices, particularly with the rise of smart watches.
Home use
Many homes utilise “smart devices” that range from security cameras and doorbells, energy meters, thermostats, household appliances (including smart TVs), lighting and even baby monitors. Voice-enabled devices like Alexa are also common, although these have not quite taken off as planned.
Automotive and transport
Smarter cars are increasingly using IoT devices to cover aspects such as maintenance, security and safety compliance. In the future self-driving and semi-autonomous vehicles will utilise the IoT, with potential for the transportation and logistics sector.
Industrial use
The IoT has a huge range of applications in industry, including manufacturing, retail and engineering, to support automation where GPS sensors, RFID (Radio Frequency Identification) tags, drones, autonomous vehicles and more can:
- support sophisticated inventory management;
- track for issues with machinery to support pre-emptive maintenance;
- track the movement of goods and optimise processes across the supply chain;
- monitor the security of premises;
- manage and monitor large scale infrastructure for a range of different issues;
- optimise manufacturing outlets to harmonise machinery, operations and more to support efficiency and operations such as just-in-time manufacturing;
- and more!
Smart buildings
Smart or connected buildings utilise a range of sensors to provide information on everything from temperature, air quality, noise, footfall, desk and meeting room utilisation. This supports automation and analytics to regulate the building environment, reduce carbon footprint, drive efficiency and more.
Smart cities
“Smart cities” is the collective name for towns and cities that use sensors that capture information about traffic movement, environmental factors, the movement of people and more to support both operational management and medium- and long-term planning. This aids everything from traffic management to safety & security to town planning to driving better air quality and sustainability.
Healthcare
The IoT has widespread use in the health and social care sectors covering health monitoring, remote care, emergency notifications and more.
Benefits
The IoT delivers a wide range of potential benefits for businesses. At a high level these include:
Business intelligence and data analytics
The IoT produces a lot of data and has the potential to produce data analytics and business intelligence that can support better decision-making, covering day-to-day operational management through to longer term scenario planning. Insights focus on multiple areas.
Automation and process improvement
The Internet of Things is supporting a whole range of improved processes and automation with a wide range of benefits that drive efficiency, some of which are covered above. For example, the use of IoT is enabling some industry-specific solutions within manufacturing, retail, distribution and logistics, covering processes such as inventory management, supply chain management, pre-emptive maintenance for machinery, the effective operation of robots, use of autonomous vehicles and more.
Sustainability
IoT sensors provides environmental monitoring and opportunities for more efficient energy management that can support sustainability with the reducing emissions and achieving net zero goals.
Innovation
The IoT can support innovation with new opportunities for digital transformation, radical process improvement and new ways of doing things.
Use of artificial intelligence
The IoT produces significant amount of data. AI provides potential to analyse and use this data in exciting new ways.
Cost savings
The collective impact of automation, process improvement, insights from business analytics and industry-specific solutions that come from the IoT can result in significant cost savings.
Trends and challenges
There are a number of trends – and different challenges – which arise from the use of the Internet of Things.
Privacy and data security
Protecting data privacy for customer and employee data and applying the appropriate security and contractual measures applies to the use of all technology, including the collecting, storing and sharing of data that flows across IoT devices. Breaches of data privacy have potentially very serious regulatory and reputational consequences.
Cybersecurity
There’s an inherent trade-off between inter-connectedness and security. Today cybersecurity is a massive issue and many objects have potential points of vulnerability for malicious actors and cyber criminals to target. This can be down to objects not being built particularly with security in mind, lazy practices such as the use of unsecured Wi-Fi or lack of password management, or new threats evolving through the use of AI. The consequences of a cyber attack can be extremely serious.
Interoperability and integration
To be effective, IoT systems will need to communicate with one another and to integrate their data in meaningful ways. Interoperability is less of a problem than it used to be but sometimes it may be challenging to get systems to talk to each other; it may be that organisations need to rely on external expertise to make things work.
Analytics capability
IoT generates a torrent of data. To extract value from this data to get meaningful insights and to make it actionable is not necessarily a given. You may need to deploy the right software to analyse and visualise data, be able to set up the right infrastructure to bring data together and have in-house skills to interrogate and analyse data. Many organisations are not particularly mature in these areas.
Connectivity and related data processing
IoT will need the right connectivity set-up to ensure continuous coverage with the appropriate bandwidth while also meeting the right security requirements. Similarly, there may be challenges around having the right data processing power, particularly in relation to producing analytics in real time. With the latter, there is a trend towards “edge computing” which moves data to the edge of a network, with more processing done in local servers and devices rather than in a data centre, supporting lower latency that will ensure uninterrupted performance.
Ethical and privacy concerns
The sharing of data across the Internet of Things and the analysis can trigger legitimate concerns around privacy and ethical use among employees and customers. Accordingly, communications may need to address these concerns.
Why do in-house teams need to know about the Internet of Things?
The IoT or data from IoT is increasingly being incorporated into core business processes, technology solutions, and decision-making, so it is important for legal teams to understand the basics. More specifically, there may be issues around:
- Data privacy and security: as noted above, the IoT has considerable challenges around data privacy and related security, as well as cybersecurity.
- Data residency: The passing of data between connected devices can be complex, particularly in relation to the jurisdiction where the data passes through.
- Licensing: Data that passes between different devices and is then used by different software applications may have some questions about related software licensing and what is permitted.
- IT procurement and contract reviews: There may need to be a review of new technology and / or related contracts for solutions that involve the IoT.
- Artificial intelligence: AI has multiple associated risks that are already on the radar for in-house teams. AI and machine learning may be relying on IoT data.
Conclusion
The IoT is revolutionising our relationship with devices and has widespread use in both the consumer and the business world. The use of the IoT is only set to increase in the next few years, which brings both exciting opportunities but also risks. As with any business change which impacts processes, where privacy and security are concerns, and where there are some ambiguities, in-house legal teams have a role to play in minimising risks and ensuring businesses use IoT in both advantageous and compliant ways.