Is the Internet Finally Coming of Age?

Is the Internet Finally Coming of Age?

Nigel M. de S. Cameron

Getting our bearings in the sea of Moore’s Law hype is not simply a continuing challenge to policy leaders (as well as investors), but perhaps their major challenge. Since, like it or not (and this has been the drum-beat of C-PET’s message since our launch in 2007), the digital revolution and accompanying scientific and technological developments have set the stage for every single policy decision of the 21st Century. The persistent and culpable naivety of the leaders of our policy community, left and right, and to a degree also of our often brash and jejune technology leaders themselves (whose worst tendency is to see technology solving all problems rather than raising and often complicating them) sit side-by-side in this curious election campaign. Ironically, this may be the sole regard in which it could be seen as normal.
Meanwhile, some matters are becoming a little clearer.

I’m not referring to Elon Musk’s latest pronouncement – that we are very likely living in someone’s, or something’s, infinitely advanced computer game. Nor to the news that Foxconn is on time to replace 60,000 Chinese workers with machines (nooo, say the conventionally wise, technological unemployment is a sophomoric Luddite myth). Nor, for that matter, to Saudi Arabia’s dumping $3.5m of its investment funds into Uber, the world’s best known unicorn – and without doubt the company we love to hate almost as much as we love to use.

For the first time ever, it’s the Style Guide of the Associated Press (following hard on the heels of the New York Times) calling it on the great technological revolution of our time: The Internet, henceforward, is the internet. Lower case rules.

Which leads me to reflect that this coming-of-age of the internet has been a remarkably lengthy process, sustained in part by the constant stream of delights stemming from its innovative power – and that of the entrepreneurial community that have made it, and our eyeballs, and our secrets, its own. And, of course, partly from the constantly jarring recognition, per the aforementioned Moore’s Law, that this whole effort is only speeding up; that we have no plateau from which to take bearings (and revise our Style Guides); that life has now to be lived, to use a pre-digital phrase, on the fly.

What are we to make of it all? I was pleased to take part last fall in a fascinating conference hosted by The Economist magazine in Madrid, on a panel addressing the question: Has the digital revolution fundamentally changed the rules of the game, or not? And the answer has to be, Yes and No. Because for all its glitz and the dramatic effect it has had – chiefly through the internet, its most prominent offspring – on the social lives of every one of us, its effect on the world of business has been a little curious. For sure, every company uses email and has vastly cheaper and better communication and data storage technologies at its disposal.

But beyond that the main impacts have been rather specific. Perhaps the oddest has been the huge blossoming of that most Victorian of industries, the mail order catalog, with attendant blessings for delivery services as Amazon and Alibaba ply their 21st-century version of a 19th-century trade. Alongside that, the global advertising industry has been upended, as Google and Facebook have grabbed the dollars from steadily collapsing print outlets. (Of course, the newspaper industry has always been an oddity, at root a Mad Men advertising business living in a strange menage a trois with often transcendent editorial ambitions and at least partly beneficent proprietors.)

In turn, the creation of search and social networking offer incalculable benefits, but partly for that reason obscure in their actual economic impact (not least to economists, whose task of calculating GDP and CPI numbers that reflect what is going on has become a lot trickier). And then there is “mobile,” which has spread the benefits of participating in the digital world dramatically, though – especially in the west – through costly services generally in the hands of the traditional telecoms companies.

Point is this: The coming of age of the internet has been a long time a-coming. Yet the shift to the lower-case i is being matched with the steady maturing of the development of what still sounds to most ears obscure: The Internet of Things – whose capitalization will surely be maintained, insofar as it has yet found its way into the purview of the style mavens of the press at all.

As members of our network know well, C-PET has hosted and co-hosted a succession of events, in DC and elsewhere, on the IoT. A couple of weeks ago I was in Brussels for the twin conferences on the Internet of Things, and the IoT application in Connected Cars, hosted by our partners Forum Europe. A few weeks earlier, I was in Dubai, invited to chair their Future Tech conference – on IoT. These events bring together corporate and government leaders, and one reason for their special value – from C-PET’s perspective – lies in the fact that so much of the development of the IoT lies in the future. That is to say, discussion can flow pretty freely, creatively ranging over large questions as well as small. While all parties round the table have skin in the game, the state of the art is still in formation.

Participants come to learn as well as to make their respective pitches, and many, many issues remain open to being shaped and re-framed. (Compare, for example, with a conference process on spectrum allocation.) And what we have referred to as the “value-values equation” – the centrality of issues of human values as much to the development of markets in novel products as to that of policy in and indeed beyond the democracies – is always lurking behind the agenda. The integrative nexus of human values, market success, and the parameters of policy, defines the Archimedean point of the 21st Century.

As the internet gets lower-cased, the IoT is set to take off – and, with it, if reports are to be believed, to release the true economic potential of the digital revolution to re-make the global economy. Because this promises to be the real “Internet 2.0.” The internet for grown-ups. The application of the internet that, as it were, buttons the “new economy” (social, search, cat pics, and all) to the “old economy” – that remains the bedrock of our economic order.

So the Brussels meetings included executives from the old order technology companies as well as key policy leaders, from the U.S. Ambassador to the EU, who stated that IoT was the top technology issue on his transatlantic agenda; to EU Commissioner Oettinger, who spoke of the “profound transformation of economic and business models” that will emerge as the IoT flourishes.

In my closing remarks, as well as summing up the discussion and noting these programmatic statements by policy leaders on both sides of the Atlantic, I made three points, and I share them here.

1.  Our IoT discussion in 2016 reflects an essential maturing of the IoT question. We have moved from endless grandiose modeling of the number of potential connected devices (to which my own best guess is, a lot), to a focus on technical issues (especially standards), policy impacts, and business models. Indeed, it was notable that the final panel of the event was on IoT business and new revenue streams in 2016.

We have come a long way since 2009, when C-PET hosted the first-ever Washington, DC conference on IoT, in collaboration with our Senior Fellows Daniel Caprio (now of The Providence Group) and Michael Nelson (now with Cloudflare). It’s interesting to reflect that, even then, our focus was transatlantic – with our friend Gerald Santucci, then the European Commission’s IoT point person, as our closing speaker. And that we had a major focus on cybersecurity. But since then, the IoT has indeed matured.

2.  While the technology and business model discussions have jumped ahead, it is less clear that there has been a parallel maturing of the two questions that rise in significance in proportion to our success in these areas – and are absolute, necessary conditions to long-term commercial success: Privacy, and security. General consumer privacy concerns in relation to the internet become much more significant in the IoT context – since the information involved is more extensive and potentially sensitive/significant (for example, with connected cars), and the economic/market considerations more immediate. In parallel, vulnerabilities rise in proportion to the development of cyber-physical systems. And those vulnerabilities are of a new order, since the threat is not simply of the loss of personal information, but of control. In a worst-case scenario the prospect is not of a phishing attack, but the crashing of tens of thousands of heating systems and security systems – and automobiles. Remember the case of the hacked Jeep.

Of course, in market terms the issue is less one of risk than of perceived risk. Such perceptions can be highly subjective. It’s well-known that consumers are tolerant of high levels of risk when it comes to driving cars, but essentially zero risk with air travel.

Point is: Our developing business models need to take robust notice of potential vulnerabilities that could lead to casualties. Both privacy and security/risk planning need to be seen as central to consumer confidence and therefore product/business model development.

3.  I added a reflection of my own. So far, the development of IoT – and, especially, use of the term – have remained pretty much unknown to the public mind. Since realistic analysts recognize that hacks – from criminals to terrorists to merely bored geeks – are likely to result in danger to people, is this perhaps a good time to reflect on the way in which the informal IoT “brand” develops? Do we really want consumers to see all the myriad IoT applications in smart cities, smart homes, connected cars, and so on, as fundamentally inter-related? Or would we prefer, from a risk point of view, a serious effort at brand segmentation? All as part of our fresh level of engagement with the “soft” aspects of the maturing IoT – which will ultimately crucially determine its success with consumers.

Your thoughts?