Internet of Things and Open Innovation
The Internet of Things (IoT) is shaping up to be one of the more disruptive market opportunities since it’s inception, connecting billions of smart devices around the globe and creating billions — some say trillions — of dollars in product and service opportunities globally.
Because of its significance as both an end market as well as a leading source of innovation in the global technology industry, India will exert considerable influence on the development of IoT. According to a report by McKinsey, IoT applications in the cities setting could have an economic impact of $930 billion to $1.6 trillion per year and IoT applications in the home could have an economic impact of $200 billion to $350 billion per year.
In one sense, IoT is simply the next logical progression in the consumer electronics industry which leverages the fact that semiconductor and sensor technology inexorably gets smaller, smarter, cheaper and lower-power. Giant mainframe computers gave way to minicomputers, minis to PCs, PCs to laptops, laptops to tablets and smartphones, and now to wearable devices and countless “things” with wireless connected sensors and processors.
The IoT has a unique advantage that will spawn an entire new generation of innovators. Unlike computers, laptops and smartphones which are designed by multinational corporations with teams of hundreds of engineers assigned to each product, IoT devices can be designed by a handful of bright young engineers working in a garage. With hundreds of new ideas for applications and devices for the IoT being incubated daily, it is critical that developers can quickly test concepts and bring them to market.
Because of the vast scope of the IoT — everything from enterprise applications that analyze real-time data from millions of devices and sensors, to personal fitness and health accessories that communicate over wireless home networks — a common set of tools and technologies are needed.
The driving force behind the development and adoption of IoT is the availability of low-cost wireless connectivity that frees products to be anywhere and do anything. Supported by proven technologies such as Wi-Fi, Bluetooth Smart, NFC and GPS, efficient radio designs continue to reduce the processing requirements and power needs of countless IoT devices.
Open innovation on the backdrop of IoT
There are multitude of new possibilities for consumers and industries alike, all enabled by the Internet of Things (IoT). And even as the concept of Open Innovation continues to garner popularity since its inception a little over a decade ago, the marriage of the two would bring about the revolution of opportunities to the brightest innovators with the companies looking to bring to market game-changing ideas and shape the IoT industry future.
Open Innovation goes beyond being a converse paradigm to traditional innovation, crowdsourcing, or management of internal resources towards innovation. It is about creating inflows of knowledge from the external environment and creating outflows of knowledge to the ecosystem. The Internet of Things paradigm lies in the expansion of technological possibilities to improve people’s lives, create a digital ecosystem where billions of people, things, and industries (let it be automotive, health, public safety, governments and home automation etc.) and devices used in the respective sectors are connected – via
This increasingly connected networked world is evolving rapidly not only radically impacting business models but also blurring of lines of the boundaries between industries. There is a cross-disciplinary engagement across devices, services and systems to become interconnected. Companies are building networks to maximize their reach not just to people but are turning these networks into platforms in order to start orchestrating an ecosystem. Open innovation helps in this orchestration by not just creating campaigns or blurring the lines of the internal organisation, it actually fits in a critical piece of creating new partnerships at a rapid pace.
Alongside of evolving IoT, or just like IoT, Open Innovation is addressing and still trying to figure out a perfect mechanism, methodology and formulation around application development, privacy and security amongst other aspects. It draws a parallel to a more distributed and connected approach, unlike the traditional silo and centralized internal driven approach. Open Innovation, fundamentally changes the mentality and the very thought process by which companies work. They are consciously, pro-actively, and regularly landscaping the external environment for innovation and new opportunities.
Open Innovation has been helpful in the diffusion of specific technologies, as well as setting up standardized frameworks. The recent fuel cell patent access from Toyota and Tesla can be viewed as one such move. Aimed at opening the market for interconnected as well as smart products – it fits to the Internet of Things paradigm. IoT is about capabilities of devices to interact with each other to generate and share data, leading to a technological convergence – a strong correlation with Open Innovation. Companies such as Microsoft, Samsung and Google are already showing how the multi-billion dollar giants are vying the smart devices space using platforms that leverage an orchestrated and open community of researchers and developers alike.
Open Innovation compliments IoT – would you place your bets on the potential to create new products and services through interactions and inter-relations of industries or continue with the traditional capital intensive tepid efforts of innovation?
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