The 'Three Cs' of the Internet of Everything and Small Business

October 22, 2015

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Rich Cooper, vice president of research and emerging issues for the U.S. Chamber of Commerce Foundation.

Takeaways

The three virtues every business—big or small—must have in order to extract the most value.

This post is taken from remarks delivered on Oct. 8 at the Baylor Research and Innovation Collaborative, in an event hosted by the Greater Waco Chamber.

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It’s my job at the Chamber Foundation to explore the issues that are changing the future of business over the next three to five to ten years.  Those changes are going to happen either here in the United States or elsewhere around the world. 

These emerging issues could be driven by people such as millennials.  They could be a disruptive company, such as Uber, AirBnB and Space X that have taken on the long-established taxi-cab, hotel and aerospace industries.  They could be disruptive technologies, such as drones and robotics that are now literally operating amongst us in ways that only the pages of science fiction previously described.

It’s a pretty cool portfolio to play in and that’s why I’m excited to share with you some thoughts on what I see as the most exciting emerging issue that will touch each of you personally and professionally.

Throughout history, the one thing that has united our species is our humanity. By that I mean our shared human interests, languages and cultures. As a mobile species, we carried and shared our collective history with us and as a result, for as different as we may be as individuals, we are all connected by our shared humanity. 

But today, something is different. We are entering a new era, where technology, data and connectivity run parallel to our humanity, linking not only our machines and devices, but also our citizens, consumers, communities, companies and countries. This is the Internet of Everything—the I O E.

The IoE is most simply defined as all of the connected devices that send data in all of its forms to other devices, providing a completely interconnected and interdependent web of connectivity. It is for better or worse the virtual landscape on which our humanity is being shared and shaped.

The IoE’s potential as a medium for creativity and knowledge offers promises of new innovations, ideas and possibilities, and that also means economic value.

This year, sales for connected-home devices—like smart phones, refrigerators and TVs—will yield more than $61 billion in revenue. By 2019, that number will climb to almost half a TRILLION dollars. Meanwhile, the IoE is expected to generate as much as $1.1 TRILLION in economic impact on the retail industry.

There are jaw-dropping statistics like this for every single industry.

The IoE touches everything because increasingly, it really does include everything. Today, it is estimated that there are nearly 5 BILLION devices connected to the Internet, and by 2020, there are estimated to be 25 BILLION “things” in the IoE.

The numbers are staggering, but if we focus too narrowly on the “things,” we miss the forest for the trees.

The defining feature of a CONNECTED device is that it is CONNECTED, and once tied into the IoE, it generates and feeds rivers of data that surge through the Internet.

5 billion rivers of data create oceans of information so vast they cannot be understood by the human mind alone. This is the so-called and much-acclaimed “Big Data,” and it is within the data ocean that businesses can realize the awesome potential and promise of the IoE.

To be sure, the future is here, and there are thousands of businesses and entrepreneurs launching into the Big Data Ocean.

This year, nearly 75 percent of companies invested more than 20 percent of their tech budget on data analytics. On the face of it, it may seem like the IoE will be dominated by the company with the most substantial technology budget.

After all, small businesses are challenged at every turn, and big spending on big data and analytics is not always feasible.

Fortunately, it is not monetary investment that defines one’s potential for success in the IoE.

Instead, there are three virtues every business—big or small—must have in order to extract the most value.

These are what I call the Three Cs of Success in the IoE: curiosity, connectivity and courage.

 

The first C – CURIOSITY. This is the beating heart of the innate human thirst for exploration.

Curiosity is what took early explorers across the Atlantic Ocean to find this great continent. Curiosity is what took us to the moon and what pushes us to peer deeper into medicine, transportation, energy and all the industries of the modern world. It is apt that the one-ton NASA rover driving around on Mars is also dubbed Curiosity.

It is this undying desire to know, see and do more that is essential for any business engaging the IoE. Why? Because nowhere in the IoE are there tailor-made solutions to your business challenges.

Data and analytics by themselves do nothing. They are individual islands with no connection to reality but when we look closer at the data generated by the IoE, we begin to uncover new ideas, new conclusions and new possibilities. There is no telling what innovative fish a curious individual will pull from the data ocean, and they will never know if they don’t look and drop their hook into the water.

The same goes for big problem solving.  Take hunger as an example. These are the words of Hunger Warrior, Maria Rose Belding:

“The United States has 12 times as many food pantries and soup kitchens as it does hospital emergency rooms. An American child is eight times more likely to suffer from food insecurity than Type 1 diabetes, cancer, or autism—combined. Fifty million of our neighbors, relatives, and friends rely on a charity for emergency groceries at least once a year while we throw away $2.5 billion in perfectly edible food annually. Hunger and food waste in America are big problems. Big data can be a part of the solution. “

Maria Rose and her team at the MEANS Database have assembled an online platform that brings convenience and speed to a normally arduous food donation process. MEANS stands for Matching Excess And Need for Stability, and that’s exactly what they do.

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Maria Rose Belding, founder of the MEANS Database
Food agencies and donors can create an account in less than 2 minutes, telling the system where they are, what they need, and how far they’re willing to travel to get it. Their algorithms do the rest.

They send out targeted alert e-mails to relevant parties the moment someone posts food to their website, and the first one to click “claim” gets that food. So far, every donation they record into their site has moved in two hours or less. They count food pantries, food banks, soup kitchens, businesses, start-ups with catering leftovers, and a museum among their users. 

They are spread across 12 states and represent more than 1500 partner agencies, none of whom have to pay to access their database.

Maria and her team are using their curiosity to make a difference in the lives of many, and they are an enterprise of only ten people – a classic small business size.

For small businesses like hers, the question is not, “can the IoE help my company?”

Instead, the question is, “What insights might be waiting on the islands of data that are littered across the vast ocean of data that could solve company challenges or lead to new and better products and services?” Maria Rose and her team’s curiosity and creativity are making a world of difference. My counsel to all of you here is to be curious and think creatively.

The IoE is a treasure hunt. Embrace lots of questions and then turn to the data to find your rewards. Of course, following our curiosity into the IoE is only possible if we are connected to it.

Thus, the second C—CONNECTIVITY.

There was a time when business success depended in large part on your geographic connectivity. Close proximity to transportation, workforce, ports, consumers and other businesses was crucial for success.

I am a native Pittsburgher, and the steel industry for which my hometown is famous depended upon access to the raw materials as well as the three rivers that distributed steel around the country. 

The same could be said of any number of cities around the world. In the old world of American enterprise, companies and enterprises headquartered near ports, rivers or adjacent to a major metropolis could achieve growth and earnings unthinkable for a business in, for example, small town Montana.

But today, the IoE is leveling the playing field. Geography is no longer a make-or-break factor in entrepreneurship and business growth.

Today, it is no longer WHERE you do business but HOW you do business.

Let me come back to the example of Montana. If I were to have asked you where is one of the country’s hot spots for technology entrepreneurship would Montana have come to mind?   

It would be easy for us to name places like Silicon Valley in California, or Boston, or Dallas/Fort Worth, or Houston or any other large population center where we see economic growth and vitality occurring. 

But here’s an impressive fact - the 2015 Kauffman Index of Entrepreneurial Activity recently ranked Montana as the No. 1 State for startup activity. Followed immediately behind it were the states of Wyoming and North Dakota.

While much of this growth has undoubtedly occurred because of the energy boom in those states, it can also be attributed to new infrastructure connectivity that enable towns like Bozeman, MT to attract technology giants like Oracle to set up huge operations there.

That infrastructure is more than connective hardware.

It is a well-educated and trained workforce; universities and educational institutions that can keep producing that talent; attractive business climates; and a great quality of life that more employees are looking for themselves and their families’ future.

With the ability to access the vast troves of streaming and stored data, any company can follow their curiosity and explore the IoE and all the information it generates.

With the ability to access the vast troves of streaming and stored data, any company can follow their curiosity and explore the IoE and all the information it generates.

This connectivity allows a company to peruse data stored in the cloud, monitor data streams in real time, experiment with new data-driven products and services, and connect their own devices to the ever-growing IoE.

Without connectivity, there is no IoE.  Devices and smart “things,” on their own, are merely lonely islands with no relationship to anything and with limited value.

But with connectivity, islands can be linked and the waters between them bridged and explored. The data-driven world is a multi-tiered web of relationships, partnerships and networks, whose potential is limited only by the imagination.

Connectivity also brings competitive advantages. A company in an urban area sees higher overhead costs and their employees face a more expensive cost of living.

In the connected world, however, a rural small business can be as innovative and successful as large company in a large city. Yet, the company in rural America will pay far lower overhead costs relative to an urban business, and its employees will see their paychecks stretch farther given a lower cost of living.

That is an attractive advantage for job seekers. Given that there is a greater need for data scientists than there are actual data scientists, a competitive edge in recruitment can be invaluable to a company making headway in the IoE.

Meanwhile, small businesses and start-ups enjoy the competitive advantages borne of being new, with a smaller staff and overarching operating infrastructure.

Larger, more established enterprises have long-standing legacy information technology systems that may not be as modern or robust enough to fully capitalize on the IoE.

And large and established businesses often have entrenched bureaucracies, which can make change difficult.

New and small companies, however, can more easily integrate data-driven sensors and technologies, and they can be more nimble, creative and forceful because they are not beholden to bureaucracies with a low risk appetite.

All of this supports small business competitiveness—that is, IF company leaders have the grit and bravery to explore this dynamic landscape.

Which brings me to the third C—COURAGE.

Our late president Harry S. Truman once said, “Progress occurs when courageous, skillful leaders seize the opportunity to change things for the better.”

That sentiment precisely defines the profound potential in the IoE. Buried within the constantly growing ocean of data are relationships and insights that will change everything for the better. New life-saving medicines. Safer cars. More productive farming. More efficient energy use and distribution. There are insights and ideas waiting to be found that today we cannot even imagine.

It is at once exciting and daunting. Where does one begin? When spoiled for choice, human beings tend not to choose. With the IoE, courage and leadership are sufficient tools to guide entrepreneurs, innovators and small businesses into the Big Data waters.

Finding that rare innovative insight is not guaranteed. As every entrepreneur knows, failure is an expected, normal part of the innovative process. Failure has costs and consequences, but so long as courage is resilient, failure becomes just another step on the road to success.

Finding that rare innovative insight is not guaranteed. As every entrepreneur knows, failure is an expected, normal part of the innovative process. Failure has costs and consequences, but so long as courage is resilient, failure becomes just another step on the road to success.

And perhaps small businesses need this undying courage more than large enterprises. Small businesses can sometimes have more limited time and resources available for pure exploration.

Facing a few failed efforts, small businesses might contemplate the safety of the status quo—the more predictable and familiar unconnected world.

But progress is the opposite of status quo, and with courage, American small businesses can be as world-changing and successful as any large enterprise.

In fact, the sheer number of small businesses in the United States means the Next Big Thing may well arise from the tireless, dedicated exploration by entrepreneurs.

Right now, there are almost 28 MILLION small businesses in the United States. If each one of those companies embraced their curiosity and courageously braved the data ocean, what might this world look like?

I submit to you that the world would look better—healthier, safer, more productive, more efficient and more equal if more companies follow their example.

We’ve already seen how curious and courageous companies like Uber, AirBNB and Space X have upended their respective industries and where they’ve taken root. 

Ultimately, that is what the IoE, and indeed, American enterprise, is all about—making things better.

For more than two centuries, the United States has been the birthplace of technologies and ideas that have changed the world. The amazing things we, as a country, have produced were facilitated by the free enterprise system, but they were achieved by American business.

Contrary to statements made by certain elected officials, we did, in fact, build that.

But what will we build next?

What will your community create? 

Whether you know it or not in your community, there are many data-intensive initiatives that can spell opportunity for the creative entrepreneur.

Inviting the region’s CIO’s and chief data scientists to join you at a future regional chamber meeting would go a long way to building even more relationships for all of you, but it also forges relationships for them, helping them connect to businesses and provide even more value for citizens, consumers and your community.

Yes, there can often be a language barrier between the geek and code speak that permeates the data and IoE community, but there is a shared tongue of interest and value added that is uniform for everyone with the curiosity, connectivity and courage to begin the conversation. 

Some of that is already in your community.

In closing let me leave you with these thoughts.

Every one of us has a family member or friend who has been affected by cancer, diabetes, Alzheimer’s, depression and so many other diseases.  Access to historical medical data in its many forms could be the missing ingredient that unlocks not only long-sought after cures, but the better life every one of us wants to see lived out in our own lives and around us.

That cure center could literally be just down the road. 

Or it could in Atlanta at the CDC, or the Mayo Clinic in Minnesota, or MD Anderson in Houston or in a small town by an innovator that we’ve not met yet.

Maybe that next big thing is a breakthrough is in high performance computing.  The phones we all carry with us today have more computing power than what landed astronauts on the moon.  Imagine what your next phone will be able to do.?

Maybe that next big thing is a breakthrough is in high performance computing.  The phones we all carry with us today have more computing power than what landed astronauts on the moon.  Imagine what your next phone will be able to do.?

Maybe it is in transportation, robotics or other autonomous vehicles.  Or in education, smart city design, energy or financial markets….

Every facet of our personal and professional lives in this ocean of data and opportunity.

Despite what some people may have said in the past, our world has never been flat.  It has always been multidimensional and we are going to see those many dimensions unfold in new, exciting and revolutionary ways.

What is more, the research being done at Baylor is not just synthesizing stored data; it is generating entirely new data as well.

Within these datasets are more insights and connections than one team can uncover—or even more than one generation of researchers can fully explore. The datasets we use today may well still hold value a century from now.   

Data will always tell us a story.  We just have to have the curiosity, connectivity and courage to share it with one another. We each hold a piece of the puzzle, but it is not until we put it on the table will we know what the ultimate picture looks like.

To make that assembly possible, we have to hold fast to the promise of the American free enterprise system to engage with curiosity and courage, to connect to this data-driven world and take part in the revolutionary force that is the IoE.

As exciting as what the IoE can do for you is what you can do with the Internet of Everything and that’s a story I hope you will shape and share in the years to come.

We will all benefit from it.  So let’s get started.