4. The growing ‘Internet of Things' The adoption of RFID (radio-frequency
identification) and related technologies was the basis of a trend we first
recognised as "expanding the frontiers of automation." But these methods are
rudimentary compared with what emerges when assets themselves become elements of
an information system, with the ability to capture, compute, communicate, and
collaborate around information—something that has come to be known as the
"Internet of Things." Embedded with sensors, actuators, and communications
capabilities, such objects will soon be able to absorb and transmit information
on a massive scale and, in some cases, to adapt and react to changes in the
environment automatically. These "smart" assets can make processes more
efficient, give products new capabilities, and spark novel business models. Auto
insurers in Europe and the United States are testing these waters with offers to
install sensors in customers' vehicles. The result is new pricing models that
base charges for risk on driving behavior rather than on a driver's demographic
characteristics. Luxury-auto manufacturers are equipping vehicles with networked
sensors that can automatically take evasive action when accidents are about to
happen. In medicine, sensors embedded in or worn by patients continuously report
changes in health conditions to physicians, who can adjust treatments when
necessary. Sensors in manufacturing lines for products as diverse as computer
chips and pulp and paper take detailed readings on process conditions and
automatically make adjustments to reduce waste, downtime, and costly human
interventions.