What directors need to know about adapting to the Internet of Things
The Internet of Things will profoundly affect how we live our lives and businesses must adapt. Gavin Smith, Chair of the Internet of Things Alliance, explains what directors need to know.
Australian Institute of Company Directors (AICD): What is the Internet of Things (IoT)?
Gavin Smith (GS): Everyone understands the Internet. It’s for browsing, it’s for accessing information, for sharing data, but increasingly the internet is also being used to connect devices. So when we talk about devices, they are the things. And the things can be power tools, household appliances, cars, televisions, you name it. Literally any device that uses electricity and has any form of electronic control can be connected to the internet in the future. So that will give us an enormous number of devices connected to the public internet.
AICD: How is that technology already changing people’s lives, and how will it change people’s lives in the future?
GS: If you go back 16 years ago, we already had internet connected fridges. They were before their time. For almost a decade we’ve had internet connected televisions that have allowed services to be delivered. Now we’re seeing technology coming to market which will allow, for example, the elderly to have a better quality of life. We will have in-home health care monitoring so that families, friends, and practitioners can check in on the elderly. They will be able to intervene before an event occurs rather than wait until it’s too late to send an emergency response.
In public transport we’re seeing apps which allow you to book rides, share vehicles and catch transport. And all because those devices, or those vehicles are internet connected as well. But that’s just a couple of obvious examples.
AICD: How does Australia compare to the rest of the world at the moment in terms of adoption and policy for IoT technologies?
GS: It is mixed. What we have already is being quite well accepted and adopted, but what’s coming to market is possibly not coming as quickly in Australia as it is elsewhere. The challenge for Australia will be to make sure that we have the right standards and security in place for devices as they are connected, so we don’t pose any additional risks or threats. We’re not necessarily behind, but the rate of adoption overseas is ramping up quite rapidly. The question is whether we’ll keep pace.
AICD: What are some of the policies that the Internet of Things Alliance advocates to help society adapt?
GS: What we’re advocating is that there needs to be robust standards in place, and devices which will be connected to the public internet have the right levels of security. Already we see many devices being connected which are vulnerable to attack because they are not sufficiently secured. We see, on a regular basis, denial of service attacks on servers. We see attacks on companies from hackers. Personal computers are exposed to viruses. If you start connecting billions of individual devices to the internet without the right level of security in place and the right capability to prevent attacks, then you have a very vulnerable economy.
If, for example, security cameras in airports can be disabled by a hacker, what would that mean from a security point of view? If alarm systems in public institutions can be hacked and turned off, what would that mean for security?
AICD: How should boards be thinking about adoption of IoT technologies?
GS: The first thing is that regardless of industry sector, whether it’s services, manufacturing, finance, whatever business these boards are responsible for, the IoT will impact them. It could be positively, but can also be negatively.
Boards have to actually understand the IoT and then look for those areas where it can be applied within their business positively. It may be a disruption that they have to bring on themselves, which affects their existing business. But by doing nothing, they’re guaranteed to have a negative impact.
New businesses will emerge that take advantage of connectable devices and deliver new services and new business models that today can’t exist. If we put our head in the sand as boards and as businesses and say, “But I’m not affected because I don’t need my products to be connected.” Suddenly some competitive threat will emerge that we don’t see coming.
They need to challenge the CEO and the executive in the company to do an IoT impact analysis: How can it affect us and how can we benefit from it? And then they need to be encouraging a discussion in the boardroom about what their strategy will be in this new era of connectedness.
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