The Internet of Things as part of the Sharing Economy
The importance of the Internet is considerable if we analyze the “global” behaviour of the Sharing Economy. One of the most important features is its accessibility to everyone and everywhere, today only possible via Internet. The American economist Jeremy Rifkin (2014) presents a radical view on his book The Zero Marginal Cost Society in which he sees the Internet of Things (IoT) as an important part of the new Sharing Economy. He states that societies are more often providing services and goods nearly free given to the advent of the Internet. In fact, he remarks this phenomenon as the only one, strong enough, able to unseat capitalism.
Kevin Ashton, one of the founders of the MIT Auto ID Center, coined the term Internet of Things back in 1995 defining it as the first smart-infrastructure revolution in history; one that connects every machine, business, residence, and vehicle in an intelligent network. IoT is the sum of three principal ingredients; sensors, connectivity (devices and networks) and people. The primary objective of IoT is the optimization of resources and the key to reach it is to connect everything to everyone. Thus, if a business is saving resources, in consequence is saving production costs, and therefore offering products and services cheaper or even for free. When a company replaces atoms by bits, there are almost no production costs and this is what is happening in current times, physical products are being reshaped into digital ones, minimizing manufacturing costs. By the moment the most affected businesses are printing companies and music producers. Furthermore, the business patterns of all modern digital companies are designed to provide abundance of information and such information is freely replicable. Once a thing is made, it can be copied/pasted infinitely without losing quality, for example a music track has a production cost; but its cost of reproduction falls towards zero. Rifkin says:
“The operating logic of the IoT is optimize lateral peer production, universal access, and inclusion, the same sensibilities that are critical to the nurturing and creation of social capital in the civil society. The very propose of the new technology platforms is to encourage a sharing culture, which is what the commons is all about, it is these design features of the IoT that bring the social Commons out of the shadows, giving it a high-tech platforms to become the dominant economic paradigm of the twenty-first century”.
Some data, in 2007 there were 10 million sensors connecting every type of human contrivance to the Internet of Things. In 2013, that number was set to exceed 3.5 billion, and even more impressive, in 2030 that it is projected that 100 trillion sensors will connect to the IoT (Bryan Merchant, 2013). The data proves the exponential growth of the IoT, turning it into the only option, as Rifkin thinks, that can eclipse the capitalism. The core of the IoT operating system is the coming together of the Communication Internet, Energy Internet and Logistic Internet in a cohesive operating platform; by the digitalization of communication, energy and transport one can manage power and move economic activity across every value chain and create aggregate energy efficiency (Rifkin, 2014). In certain point Rifkin introduces the artificial intelligence (AI) and develops a formula that will reproduce a self-sustaining society. He explains the possibility of combine natural resources, the Internet of Things and the Artificial Intelligence in order to run an intelligent self-production factory. In this case, AI machines will replace manpower, they will extract raw material and energy from the nature and they will manufacture the product by themselves, then the IoT will manage the production optimizing every parameter and it will connect the final good to the consumer via sensors and GPS. In this futuristic scenario, the complete production line costs almost zero. Almost every industry can benefit from investing in the IoT, which means adding data-collecting sensors to objects such as factory machinery, office buildings, warehouse shelves, etc (John Greenough, 2015). According to a SAS study, the 18% of industrial machinery companies (i.e. manufacturers) are already using IoT devices and an exponential increase is expected in the coming years.
By Esther Martos (@esther_prague)
- Jeremy Rifkin. The Zero Marginal Cost Society, 2014.
- Bryan Merchant, With a Trillion Sensors, the Internet of Things Would Be the “Biggest Business in the History of Electronics”, Motherboard, November 2013. http://motherboard.vice.com/blog/the-internet-of-things-could-be-the-biggest-business-in-the-history-of-electronics
- John Greenough, These are the top industries that will benefit from the ‘Internet of Things’. Business Insider. June, 2015. http://www.businessinsider.com/top-the-internet-of-things-industries-2014-12
