Unless you’ve been extremely busy or living on Mars for the past 20-years, you know that the next big thing is the Internet of Things (IoT) and that 30 billion devices will be wirelessly connected via the internet by 2020, which will thereby allow humans to engage with technology as never before.
It’s not just smart cars, smart devices such as smart TV’s, home stereos and computers, but also smart electrical grids, virtual power plants that can shift energy from one place to another (easily done) instead of powering-up or powering-down a physical power plant (a much bigger deal and more expensive proposition) it’s also the ability of billions of devices to predict and solve problems before they occur.
The cloud is expected to play a big role in the Internet of Things, and the biggest of the cloud providers are Amazon Web Services, followed by AT&T, Bosch, Cisco, Dell, GE and Google. Huge upgrades to accommodate the IoT revolution are already underway.
When 30 billion sensors, computers and supercomputers are connected, prognostication becomes infinitely more effective, making systems such as the markets, transportation networks and energy networks exceedingly efficient compared to today.
For example, throughout most of human history, food producers reacted to demand and worked diligently to meet demand as the tastes of consumers changed over time.
However, even with the best of intentions and with the diligent efforts of farmers, this occurred in a patchwork fashion. When the crops we know as barley and oats began to fall out of favor in the 1940’s and began to be replaced by wheat and corn, farmers reacted (with a one or two-year delay) each time demand fell for one crop and increased for another. The simple reason for this is that without predictive behavior, farmers were forced to react to changing market conditions after the fact.
With the Internet of Things, each time a barcode is scanned (or isn’t scanned, in the case of crops that are falling out of favor with consumers) it communicates to food producers exactly and in realtime the changes occurring in the market.
Therefore, instead of adopting the ‘wait and see’ approach historically common among food producers, they will update their crop list and plant a larger proportion of the suddenly more popular quinoa, spelt and flax in their next planting cycle, for example.
And as the companies that produce seeds for farmers are reading the same barcode summaries, those suddenly more popular seeds will be ready for shipping when the farmers place their online order, which itself will be scanned by barcode scanner as it is shipped.
Meeting demand without a one or two-year lag time makes all the difference between extraordinarily high prices for some crops and crashing prices for crops that are in the process of falling out of favor with consumers.
To put it another way, our typically efficient markets will become hyper-efficient markets that react to changing market forces in realtime, instead of reacting with a one or two-year lag factor.
The case for hyper-efficiency in retail sales, and for transportation and energy networks is even better than that of the food production case, and thousands of pages of scholarly articles are devoted to explaining the positive outcomes that will occur via the Internet of Things regarding those insanely complicated and interconnected systems.
Thanks to the Internet of Things, market efficiency is about to make a quantum leap in the right direction.
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