Immagine Pandora sitting and staring at her box. In a few moments, she will open its bronze lid and release fear, death, and plague into the world . . . but right now she is wracked with uncertainty. What’s inside? The box might contain untold riches to help her new kingdom—but Zeus warned her never to open it. Should she open it and risk punishment, or leave it shut and possibly leave valuable resources untapped?
In many ways, the story of technological change and regulation is Pandora’s story—technology can be understood only through the lens of risk and uncertainty. Technological change by its very nature causes uncertainty: How could this new technology be used? How might it improve people’s lives? How may it harm those same lives? With the Internet of Things (IoT) at the peak of its hype cycle, these questions are swirling more than ever. The challenge is the risk that accompanies all of this uncertainty. Like Pandora, companies looking to implement IoT solutions are facing a box that may contain significant new revenues—and, quite possibly, technical difficulties, future regulatory challenges, or security breaches. Do they risk opening the IoT box and facing these uncertain regulatory issues, or do they leave it closed and risk missing out on the potentially most transformative technology since the Internet?
One key to making an informed decision and ameliorating risk is to reduce uncertainty—in particular, uncertainty about future regulation that may affect IoT practices. For regulators too, pressure is mounting to protect consumers even while IoT technology itself is still developing.But with the often-blunt instrument of regulation, this could become a catch-22 of inaction: Regulators take no action because they are uncertain about the technology, so companies take no action because of uncertainty about regulation, slowing technological adoption . . . and further slowing the action of regulators (see figure 1).
But it takes only a shift in perspective to break this catch-22. Consider that government’s relationship with IoT technology goes beyond regulation—agencies are also consumers and developers of IoT infrastructure and applications. In these two roles, government can influence the development of IoT technology, guiding it toward safe, secure, and responsible uses—and saving regulation for indisputably necessary areas such as critical infrastructure or health systems (see figure 2).
To illustrate exactly how governments at all levels can help to guide the IoT’s development—protecting citizens while still encouraging technological growth—this article makes use of a body of industry-specific use cases. The goal: to reduce overall uncertainty, allowing policymakers to understand this complex issue and businesses to see where government action is likely, thereby reducing the risk of their investments in IoT technology.
Governments and the IoT
The first step to reducing the uncertainty and risk around the IoT is to get a better picture of what it is, and how government agencies may need to interact with it. The IoT is the architecture and suite of technologies needed to create, communicate, aggregate, analyze, and act upon digital information in the physical world (see figure 3).
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