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Jan 2015 | Asset Management

TRANSFORMING GOVERNMENT WITH THE INTERNET OF EVERYTHING
DR. RICK HUIJBREGTS, CISCO CANADA

Today, more than half of the world’s population lives in cities. Within the next two decades, this number will grow to 60%. As a result, mankind will occupy just 2% of the world’s land mass while consuming about three-quarters of its resources. Already, we are seeing the early effects of urbanization, such as overcrowding; pollution and other environmental challenges and disasters; resource constraints and shortages; and economic instability.

 

Cities are consuming 70% of the world’s energy, and half of that is from heating and cooling our built environment only. Add to this the rapid growth of knowledge and information-based industries and a decline and cannibalization of industrialized and labor-intensive industries. In Canada alone, a growing aging population is putting financial strain on the country. Healthcare spending is consuming more than 40% of government spending in both Ontario and Quebec, the country’s largest provinces, for the past three years. Healthcare costs are expected to consume more than 11% of our national GDP this year.
 
More than ever before, municipal and industry leaders need to work together to address these social, environmental, and economic issues head-on, in order to provide for and foster communities in which all stakeholders can flourish and innovation can thrive. Together, we need to develop practical solutions that conserve resources, enhance social engagement, improve economic efficiency and productivity, and prevent and divert future crises.
 

I. LIVE, LEARN, WORK, AND PLAY

 
Six key technology trends are shaping this transition, each one having a profound impact on the way individuals go about and manage their everyday lives, businesses, and communities. These include mobility, video, applications, Internet of Things, big data, and cloud. These trends provide the tools and platforms with which we can create sustainable solutions that drive social, economic, and environmental prosperity for all. It’s important we understand the trends—how they formulate the Internet of Everything—and how they can drive value and deliver business outcomes.
 
Mobility
In 2013, over half a billion devices and connections were made. That same year, global mobile Internet traffic grew by 81%. In China alone, more than 80% of all Internet traffic is already consumed via mobile devices. In 2013, mobile Internet traffic was 18 times the size of the entire global Internet data in 2000. In Canada, mobile data traffic is expected to reach 246.8 Petabytes per month by 2018, the equivalent of 680 million text messages each second. Mobility is key and your constituents (citizens, businesses, and employees) are expecting it.
 
Video
Today, more than half of global Internet traffic is generated by video, specifically by streaming services such as Netflix, YouTube, and Hulu. One hundred hours of video are uploaded to YouTube every minute, up from 72 hours per minute only one year ago.  In just a month, over 6 billion hours of video are watched on YouTube - that’s almost an hour for every person on earth. Of that, 40% is watched on mobile devices. Video is transforming the nature of collaboration, and collaboration is key to the success of productivity and innovation for any business, community, or nation.
 
Application economy
Every day, more than 2400 new “apps” are created across all existing mobile platforms. While the majority fall by the wayside or are quickly forgotten, a rapidly growing number have a significant impact on the way individuals go about their everyday lives. The $19B sale of WhatsApp to Facebook or the $20B valuation of Uber—which has transformed the taxi industry by changing the interaction and definition of supply and demand—are just a few of the many examples of how “apps” will continue to create new business opportunities and disrupt existing ones. 40% of these new innovations come outside of the usual economic hubs of metropolitan areas. This means that four out of every 10 game-changing startups may come from the basement or kitchen table from within your community. Encourage it, celebrate it, and capitalize on it.
 
Internet of Things (IoT)
The “Internet for people” has morphed into the “Internet of Things” or IoT. In 2008, the number of smart objects (or ‘things’) connected to the Internet exceeded the number of humans on Earth. By 2020, the number of connected things is expected to reach 50 billion from a mere 13 billion smart objects today. Such a rapid adoption rate of digital infrastructure is unprecedented. In fact, it is 5 times faster than that of electricity and telephony.
 
Smart objects—as simple as a basketball and as complex as cardiac monitors, traffic systems, cars, and pump-jacks are coming alive (just to name five of the billions of connected things and systems that will turn to the Internet for machine-to-machine and machine-to-people communications). The value and the opportunity lie in the interconnectivity of these ‘things’. For example, traffic light sensors will communicate with cars and video surveillance cameras in order to monitor and predict congestion on your route to the office, and subsequently communicate that information to your alarm clock, which can then automatically push back your wakeup time and make the appropriate adjustments in your calendaring tools, giving you time to catch some extra sleep. And this is only the beginning of what IoT can do.
 

 
 
Big Data (and analytics)
Society’s ability to generate and record information has progressed at an unthinkable pace in recent years. Today, we generate more than 2,500 billion GB (2.5 ZB, or zettabyte) of data each day. 90% of the entire world’s data has been created in the last two years alone. It is expected that we will be doubling data every two years. This surge is not just the result of only humans communicating via the Internet. The billions of new smart objects that will communicate over the internet (Internet of Things) will further accelerate this.
 
By 2020, we expect that more than 40% of all data will be generated by sensors that will define the world of IoT. However, what is most exciting about IoT is not the raw data itself, but rather what can be done with it—the value we can derive from the many bits and bytes that are extracted from the billions of smart systems and devices. New technology allows data to be scrubbed, combined, and analyzed with more ease and efficiency than ever before. These data analytic techniques allow assumptions to be proven, patterns to be interpreted, and predictive models to be developed.
 
Cloud
The “cloud” has emerged to provide an easy, secure, flexible, low-cost, and scalable way to store, access, share, and compute/analyze public, private, and consumer data.  Governments and businesses are changing the way they think about technology and data storage. As of 2014, 87% operate in the cloud. 43% wish they had adopted it sooner. By 2017, significant catch-up will be done by those lagging behind - projected overall cloud spending is expected to reach $235 billion in that year alone. By 2016 in Canada, 25% of all government IT spend will be on cloud-based applications and services, in pursuit of improved collaboration, better analytics, reduced costs, and increased productivity.
 

II. CREATING VALUE WITH THE INTERNET OF EVERYTHING

 
It is important to be aware of and understand the transformative impact of these aforementioned technology trends, as they will have an acute impact on how we deliver, consume, and create services for the future. Mobility, video, applications, Internet of Things, big data analytics, and the cloud are tools that help us improve the way we live, work, play, and learn. And at the intersection of all those elements sits the Internet of Everything. 
 
The Internet of Everything and the underlying technology trends and capabilities are making it possible to confront and combat the challenges of the 21st century: searching for sustainable economic, social, and environmental value for all citizens of the world. The backbone for this movement exists and has become an essential building block in transforming any country, community, or business: the Internet and high-speed broadband networks. If we take the power of people, process, data, and things (“Internet of Everything”), layered on top of the Internet foundation and broadband connectivity, we find the opportunities are endless. Data can be turned into information, information into knowledge, and knowledge into insight. Ultimately, this allows society to create new capabilities, richer experiences, and incredible economic opportunities.
 
The private and public sectors need to embrace new and constantly evolving technology trends to remain relevant in today’s digital age. In fact, they need to not only adapt, but also be constantly in search of new and better ways to generate, record, manage, and analyze data and consequently deliver innovative and value-added services and experiences. There is constant pressure to remain cost-effective, as well as deliver a high quality of service to customers. From 2013 to 2022, the Internet of Everything will create $19 trillion of value for the world’s private and public sectors combined which equates to nearly $500B to the Canadian economy of which more than $90B will be attributed to the public sector.
 
The important role of government and municipal leadership
To generate and monetize this value for our communities and country, all levels of government have a critical role to play.
 
1         At the executive level, we need to see visionaries and thought leadership, in order to create and foster a culture of growth and innovation, and to understand and promote how to combine the physical and digital aspects of our world for the betterment of industry, municipality, and country.
 
2         Governments need to adopt and embrace smart regulation, to more actively support and accommodate the changes that are being brought forth by the digital age. Decade old policies, current-day lengthy debates, and unnecessary obstacles need to be removed if we want the participants in our economy to start generating value with the Internet of Everything.
 
3         High-speed broadband and networks must become top infrastructure priorities. The movement of bits and bytes is equally important as moving people (transit), electrons (grid), and water—it may well hold the answer to 21st Century growth and wealth creation. Not building the appropriate foundational infrastructure that allows us to benefit from the Internet of Everything will stifle progress and prosperity.
 
4         Lastly, public-private partnerships and new eco-systems need to be formed to encourage cross-industry and interdisciplinary collaboration in search of productivity and innovation. New ways of collaboration will impact how governments procure today. The public sector needs to transition from Requests-for-Proposals in search of “low-cost compliance,” to Request-for-Innovations in search of sustainable value and solutions. Municipal leaders cannot stand by idly and see how the future unfolds. They need to take action and be pro-active in stimulating our country’s innovation and wealth creation with current-day and 21st Century tools and technologies.
 
So, how can society transform itself to see opportunity in disruption? Fortunately, the first step is easy - it is simply a question of mindset, attitude and action. Collaboration and creativity spark innovation, a key component of progress in today’s digital age. The upcoming paper in our series of three will flesh out the value propositions of the Internet of Everything, and provide concrete examples of the ways in which this revolutionary concept has and will continue to transform our communities with each coming day.