The Internet of Things to bring a new economic boom
The Internet of Things (IoT) may be more significant in reshaping the competitive landscape than the arrival of the Internet. Its productivity potential is so powerful it will deliver a new era of prosperity.
That's the argument put forth by Michael Porter, an economist at the Harvard Business School and James Heppelmann, president and CEO of PTC, in a recent Harvard Business Review essay. PTC is a product design software firm that recently acquired machine-to-machine (M2M) firm Axeda Corp.
In the past 50 years, IT has delivered two major transformations or "waves," as the authors describe it. The first came in the 1960s and 1970s, with IT-enabled process automation, computer-aided design and manufacturing resource planning. The second was the Internet and everything it delivered. The third is IoT.
With IoT, "IT is becoming an integral part of the product itself," wrote Porter and Heppelmann. It is doing this by infusing sensors, processors and software in every product imaginable and coupling it with analytics. That combination will change how businesses operate, how they deliver their products and how interact with customers.
"Another leap in productivity in the economy will be unleashed by these new and better products," Porter and Heppelmann argue. "The third wave of IT-driven transformation thus has the potential to be the biggest yet, triggering even more innovation, productivity gains, and economic growth than the previous two."
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