The Internet of Things Is a Secular Transformation

While the IoT is already in the "here and now," it has yet to deploy its wings.
By Alain Louchez
May 04, 2015

The Internet of Things and Industry 4.0
In 2012, Stephan Ferber, Bosch Software Innovations' VP of portfolio strategy, described how the Internet of Things, or the fourth industrial revolution, will drastically improve everything from engineering to life-cycle management. "By connecting machines, warehousing systems, and goods, we can create smart production systems that basically control each other without requiring any manual intervention," he wrote. Deutsche Telekom and SAP recently said they are partnering to develop new standards for Industry 4.0, "giving Germany's local manufacturing industry a much needed boost in advancing technologies, innovation and IoT-related infrastructure." That is a timely reminder of the pivotal importance of the Internet of Things in the history of technological transformation.

New Industrial Revolution or Not?
The various technological waves throughout history are well known: The first industrial revolution, powered by the steam engine, started around the mid-eighteenth century. The second revolution, lighted up by electricity, can be traced back to the end of the nineteenth century. The first commercial uses of computers marked the third industrial revolution, ignited in the 1960s.

However, Robert Gordon, a professor of social sciences at Northwestern University, in thought-provoking essays in 2012 and 2014, argued that "technological change is slowing down, not speeding up."

Careful of not stepping "into the trap of predicting that innovation will come to an end," he nevertheless wonders about the limited impact of the latest inventions, e.g., "the marginal utility of a wrist device compared to the existing smartphone sinks into the insignificance of small things."

In essence, Gordon does not envision a fourth industrial revolution, at least in the near future. He believes "attention in the past decade has focused not on labor-saving innovation, but rather on a succession of entertainment and communication devices that do the same things as we could do before, but now in smaller and more convenient packages… These innovations were enthusiastically adopted, but they provided new opportunities for consumption on the job and in leisure hours rather than a continuation of the historical tradition of replacing human labor with machines."

(Gordon is not the only skeptic around. See, for example, the current debate among economists on secular stagnation and highlighted at the last annual meeting of the American Economic Association, held last January).

And yet, there is this enthusiastic, steadfast belief in an impeding fourth industrial revolution (Industry 4.0) brought about by the Internet of Things!

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