If you’ve spent any time with American Consumer Institute research and material, you’re familiar with our love of the Internet, technology and its promise to change economies, create new markets, and alter the way consumers live for the better. The Internet has certainly proven this out even as the relative age of the Internet is still quite young. Now, an entirely new segment of the Internet is springing up, and it could prove to be just as disruptive as earlier Internet-enable revolutions have been.
Known as the Internet of Things (a terrible buzzword name, but for our purposes we’ll use it here), it holds the promise of connecting items we use in everyday life to the Internet, maker them smarter, and hopefully, even more useful.
For some, this idea might seem strange. Why would you want or need this? Imagine if you could control everyday household items, like your thermostat or oven, with your smarthphone while you’re out of the house. Perhaps you’re away on vacation in the winter. To save money, you turn down the thermostat to a chilly 60 degrees while away. But you don’t want to come home to a cold home—so, you open your smartphone and turn your thermostat up to a balmy 72 degrees for when you arrive. This product, called Nest, currently exists, and is one of the best examples of the Internet of Things.
These innovative new products could change the way we live, making consumers lives easier, saving money, and living smarter in the process. By having Internet enabled devices, not only do we allow more control to make decisions like the one I described above, but we’re also able to make our devices smarter, using open data sources to make decisions about what they should do.
These devices could also now provide data to its users, letting users decide how to optimize for efficiency or to enable tracking and usage. For instance, the proliferation of “wearables” like Fitbit or Nike’s Fuelband enables users to gather data on themselves and decide if their habits need to be changed to be healthier. These data applications allow us to be less wasteful and to allocate resources to where they’re best needed. These technologies also become a source of new jobs, creating new wealth and further economic activity, with the efficiencies contributing to economic growth and better allocation of resources. According to Cisco Systems, this new market could generate $618 billion in global profits this year, and could add $1.9 trillion to the economy.
As this new market continues to emerge and eventually flourish, government will certainly attempt to regulate it. The Federal Trade Commission has scheduled a “workshop” to study this new sector. Even a hint of regulation can have a chilling effect on companies and entrepreneurs getting involved in potentially overly regulated areas. As we’ve detailed over and over and over in the past, regulation only stifles innovation in new and emerging fields. The government should resist these attempts if it wants to see a future filled with awesome new consumer technology.
Zack Christenson writes on digital tech issues for the American Consumer Institute Center for Citizen Research.