The view from Harvard's Michael Porter, an economist noted for his work on competition, is that the last 10 or 15 years have been "pretty dismal" for the economy. The IT- and Internet-driven innovations over the past four decades or so have played themselves out. The rate of investment and innovation "has been slowing down," he said.
But that will change thanks to Internet of Things (IoT) technologies, which will deliver "tremendous" efficiency gains, he said.
At the ThingWorx conference here, organized by the IoT platform company of the same name, Porter put context around how the IoT efforts of many individual companies will lead to overall economic improvement.
"We're going to drive waste out of the economy in ways that we have really never seen before," said Porter, who sees the potential for a "bright era" ahead.
Products that are connected can communicate their condition and how they are used. This data will be used to schedule maintenance when it is needed, and not against a schedule that requires maintenance whether the product needs it or not. Usage data will feed back into product design, and predictive analytics will be used to reduce failures and outages. All those things will improve efficiency.
Eventually, the IoT will deliver products that decide "what they should continuously do without human intervention," said Porter. "We believe that this is going to give a real opportunity for a surge of growth -- a surge of productivity, a surge of innovation," he said.
The IoT will also change how manufacturers and services firms interact with customers. In today's model, a business sells a product to a customer and "there is just silence until something goes wrong," said James Heppelmann, president and CEO of PTC, the parent firm of ThingWorx.
Today, businesses are asking the customer "to be the sensor and monitor the thing" and then call if there is a problem, said Heppelmann. "This has led to a massive proliferation of call centers," he said.
But Heppelmann also addressed, in blunt terms, the concerns about IoT security that will have to be resolved.
"There are some real reasons that we need to worry about this [security]. First of all, more is at stake," said Heppelmann. "If somebody hacks into an automobile driving down the road they can do some pretty serious damage pretty quickly," he said. "This is a place where we've got be very careful."
The second security issue concerns the possible ease with which IoT end devices can be attacked. Many of those things don't have the processing power and requisite pieces, such as anti-virus software, to protect themselves, said Heppelmann.
Security will be a big challenge, "and we will beat it back over time to a level of submission that we can live with," said Heppelmann.
Charles Baker, the governor of Massachusetts, also spoke at this conference, and outlined the state's interest in developing IoT industries.
"We are going to find an avalanche of new industries, new businesses, new products, new ways of thinking about things," said Baker about the IoT.
This story, "Economist: The Internet of things will deliver surge of productivity" was originally published by Computerworld.