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Smart trends - market changes and the futureFebruary 2016

Google acquiring Nest in 2014, Apple announcing its Siri Smart Home Application in the same year and Honda’s much publicised announcement of its “Smart Home USA” in 2013 heralded the arrival of new types of global players in the homes and buildings market. Nest has rapidly augmented the number of partner companies and products in its portfolio, including smoke detection, lighting, sensing, remote control, locking and smart appliances. Meanwhile, Apple’s HomeKit is turning the smart phone into a sophisticated remote control
for a smart home.

In January 2015 Facebook acquired a little known speech-recognition start-up called Wit.ai. With this it seems Facebook intends to turn speech and text into actionable data and connect them to multiple devices. This could then herald Facebook’s move into voice control of home appliances, and with 1.3 billion Facebook users, this could be a very powerful offering. Then as recently as August 2015, Samsung acquired US based Smartthings allowing it to launch a hub for smart home devices which it hopes will drive the evolution of the Internet of Things (IoT).

Developments in micro technology, software, communications and automation, mean that most devices, buildings, systems and processes now have the potential to have a degree of ‘smartness’ or built-in intelligence. We are already seeing this at the “micro-level” of smart devices and appliances, and of buildings, large and small which can be programmed in ways that meet human needs for comfort, security and energy saving and which help to achieve wider objectives such as reducing greenhouse gas emissions.

At a macro level, cities and larger metropolitan areas are using technology to run themselves more efficiently, including the physical infrastructure, such as ‘smart grids’, video surveillance and traffic control strategies designed to raise resilience, improve productivity, save energy and reduce costs.

This smart evolution also embraces the public transport infrastructure, as well as the provision of services such as smart health, education, law and order, and the process of national and local government. Some human needs are being addressed at an even wider level by systems and organisations with global scope and outreach, from multinationals to intergovernmental organisations. By linking systems together in a ‘smart’ way it is possible to exchange and analyse information and coordinate processes so that goals and problems are addressed at the most appropriate level or combination of levels.

The development of the IoT, the influence of major software platforms and the drive for common standards mean that the distinction between smart devices, buildings, cities etc. is becoming an increasingly artificial one. However, the rapidly growing number or interactions creates a level of complexity and hence of unpredictability. This is heightened by the interactive nature whereby human responses to smart technology, both at an individual level and en masse are not always as intended. Furthermore, smart, interconnected systems can provide a degree of resilience, but can also be more vulnerable in that access to one can provide a ‘gateway’ to others, posing very serious cybersecurity issues.

And while Smart technology has already provided opportunities for a wide range of suppliers, to date, only a small number have achieved a strong presence across a broad range of the relevant competencies. While automation companies currently lead the field, some of the major IT, software and web technology companies are already influential and could become much more so.

As elsewhere, there is a tendency for technology elements to mature and become commoditised, meaning that suppliers need to move further up the ‘value chain’ in order to maintain a leadership position.

As larger-scale systems (e.g. at city level or above) become more important, so the ‘human facing‘ and social skills such as consultancy become more important.

People are beginning to realise that ‘smart’ technology and processes can have a major effect
on the success of companies and cities. It is possible that in future, the level at which the technology most effectively interacts with individuals and organisations will itself help to determine the way that society and politics are run.

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