From Atoms to Bits: the Data Economy is real. Part V

Economic value forecast for IoT. This refers mostly to the IoT itself not to the value that can be generated from IoT produced data. Credit: IoT Analytics

An interesting angle to consider, that will also influence the regulatory framework and the pace of its evolution, is the value associated to IoT and, even more important from a regulatory standpoint, the one that can “emerge” from IoT in terms of data leverage. Some estimate this potnetial leveraged value as three fold the value of the IoT market (McKinsey, see graph). Again, the forecasting landscape is fuzzy, since the data value is not related to the data itself, rather to the use of the data. A temperature sensor in a fridge, in a living room, in your smartphone, on a gate of a corral (cheching the temperature of cattles) or in the thermometer you use to check your baby temperature are basically excatly the same and the date produced is per sé indistinguishable (a temperature). However, the value you attribute to that data changes enormously depending on the context.

In general we can say that the value of a sensor data in a bit economy is pretty low (approaching zero, actually), whilst in the data economy it varies significantly and its economic value is not in the data but in the “interpretation” of the data.

Expected growth in wearable IoT. Credit: IDTechEx Market forecast, Technology, Players

From a perceptual point of view it is clear that data related to our “body” tends to have a higher (subjective) value than others. This is why wearable sensors are an interesting to consider. The expected growth is au pair, basically, with the expected growth of all sensors (although splitted in different ways) and their expected value (in terms of sale) in 2026 is just one thousandth of the total value of sensors forecasted by McKinsey (one three hundreth of the total value forecasted by Gartner). This figure represents the total value, the value per sensor may be greater, and the value of the information resulting from the interpretation of the data is ever greater.
The interest in this area is because these sensors are about “us”. They mirror our atoms and our behaviour. This is why the potential perceived value can be far greater than the one of the others and may lead to more wealth generated than the others. Their impact on areas like health and wellbeing is going to be enormous, as their impact on containing health cost, with side effects in the insurance area.

It goes beyond that. These sensors are enabling our symbiotic relation with the world, and may result in an augmentation of our capabilities, what is sometimes referred to as “human 2.0”.  It is also an area fraught with ethical issues.

About Roberto Saracco

Roberto Saracco fell in love with technology and its implications long time ago. His background is in math and computer science. Until April 2017 he led the EIT Digital Italian Node and then was head of the Industrial Doctoral School of EIT Digital up to September 2018. Previously, up to December 2011 he was the Director of the Telecom Italia Future Centre in Venice, looking at the interplay of technology evolution, economics and society. At the turn of the century he led a World Bank-Infodev project to stimulate entrepreneurship in Latin America. He is a senior member of IEEE where he leads the New Initiative Committee and co-chairs the Digital Reality Initiative. He is a member of the IEEE in 2050 Ad Hoc Committee. He teaches a Master course on Technology Forecasting and Market impact at the University of Trento. He has published over 100 papers in journals and magazines and 14 books.