Facebook, Groupon, Netflix Drive the Next Big Thing and America’s Economic Resurgence
The pleasing functionality of smart-phones, touch-screen tablets, and lightning-fast desktops is enabled by another combinatorial infrastructure — mating cheap and blazingly fast wired and wireless Internet ‘superhighway’ with thousands of leviathan-scale data centers. The latter is what Google engineers are calling “warehouse-scale computing.” When you can have fast real-time anywhere connections to ubiquitous logic and storage, the device in your hand doesn’t have to be so smart to appear brilliant. The heavy lifting is done elsewhere, in what has come to be known as The Cloud. ~ Mark P. Mills
Witness the stratospheric valuations and expectations for still-private Facebook and Groupon as iconic faces of social-networking.
But something more fundamental is going on. Not to stretch a well-worn analogy, but focusing on the social and entertainment industry in this context is akin to focusing on vacation travel as the chief economic benefit enabled by the 1950s construction of interstate highways. Obviously the new highways (plus cheap automobiles) spawned a huge tourism industry, but that was a side benefit. Construction jobs abounded too during the highway construction phase, but that new system provided economic value far broader and longer lasting, virtually reshaping America. Analogies are imperfect, but we are today experiencing a comparable infrastructure build-out, with comparable implications. It’s just much less visible than tarmac and engines.
There is no official definition for the Internet of Things. But in simplest terms it is when things and objects, or parts of things instead of people, initiate communication and are networked. It’s when your car, via EZpass, tells a toll-booth where you are and to charge your bank account $2.50. It’s when your home thermostat sends information to you, or a shipping pallet of refrigerated pharmaceuticals alerts shipping-and-receiving of condition and time-of-arrival, or when your brake pads tell not just you but the dealer’s warehouse and the manufacturer, that you need new pads. It’s when the trucks for a fleet manager, and customers and producers, keeps real-time tabs on location, fuel-use, and on every pallet and even every box on the pallet. When a farmer’s field knows by the square-meter where more or less water or fertilizer are needed. Also when the manual push-button help-I-fell-and-can’t-get-up monitor becomes location and position smart, and automatically alerts all relevant parties to Gramps’ fall, location, heart-rate and blood pressure.
In short, any thing that has a condition of interest to someone, somewhere, can be accessed in principal now, or very soon, cost effectively, in real time. At the most basic level, most conditions of interest are rather simple: on/off, here/there, hot/cold, ready/stopped, fast/slow, far/close, thin/thick. And one small level up are metrics such as speed, temperature, height, location, and energy use. All these have value in every domain of human activity, e.g., in manufacturing, services, entertainment, travel, the environment, health care. And each piece of information about some thing requires trivial communications bandwidth, so that case-by-case the use of wireless access is practically free. And with the Cloud, the use of capacious computing power to add intelligence to the object is nearly free too.
So the emergence and acceleration of the Cloud driven by Facebook and its cousins and progeny now enable the Internet of Things because the capabilities are so broad in scope and scale, and the per-byte costs are so low as to be free.
Why should anyone care? Much of the inefficiency – – the inverse of productivity – in what we build, fabricate, grow, move and use resides in what we don’t know, what we have to prepare for. Information has value. There is more value in the information about the location of a shipping container than the cost of the steel to build that container. The scope of the information of value is nearly beyond imagination.
The next step involves the creation of entire new classes of sensors – since piggy-backing the free networked Cloud effectively and radically reduces the total system cost to just that of the sensor. So how cheap can we make new sensors to put them where they’ve never been before – from under the farmer’s field to under your skin?
The evolution of the Internet has undergone two main phases thus far, epitomized by the most common things it was used for. First came email. Then came shopping, news and static entertainment. Now comes video. Next comes things. Each earlier phase drove a boom in demand and construction of networks and the back-office hardware (data centers) – each time in a typical boom-bust cycle. And each phase was also associated with, and contributed significantly to, underlying American economic growth.
Thus far, the creation and growth of each phase of the Internet has been dominantly associated with American enterprise. It can continue to be thus — assuming some reasonably sensible behavior on the legislative front (largely staying out of the way) — because the nature and growth of each phase of the Internet has been unpredictable, semi-chaotic, tech-centric and entrepreneurial driven. All the hallmark features of the American scene.