How Washington should think about the Internet of Things

The Internet of Things encapsulates the idea that ordinary objects — from thermostats and shoes to cars and lamp posts — will be embedded with sensors and connected wirelessly to the Internet. These devices will then send and receive data which can be analyzed and acted upon. As the technology becomes cheaper and more robust, an increasing number of devices will join the Internet of Things.

Though many of the changes to everyday devices may be subtle and go unnoticed by consumers, the long-term effect could ultimately have an enormously positive impact on individuals and society. A connected world is capable of anything from improving personal health to reducing pollution to making industry more productive. However, this vision of a fully connected world will not be achieved without initiative and leadership from policymakers to promote its deployment and avoid pitfalls along the way.

The Center for Data Innovation hosts "How can policymakers help build the Internet of Things?" on Thursday from 1 p.m. to 5 p.m. You can watch the event live here.

The potential size and scope of the Internet of Things is enormous, with the worldwide count of connected devices expected to exceed 40 billion by 2020. As technological barriers decrease and adoption of the Internet of Things takes off, how policymakers respond to this technology will be critical in determining just how many of its benefits will be realized.

Of two conflicting approaches to the Internet of Things, neither: the “impose precautionary regulations” nor the counter “leave it completely up to the market” will allow societies to gain the full benefits from this revolution. The status of the Internet of Things as an emerging technology necessitates a policy framework that is fully cognizant of its benefits, allows for future innovation, and responsibly protects against misuse without restricting its capacity to deliver social, civic, and economic benefits.

There are many ways in which governments can help build the Internet of Things. On a national level, governments should develop a strategic roadmap to guide the deployment and adoption of this technology. In the US, for example, the Department of Housing and Urban Development should develop an action plan to promote smart homes, and the Department of Energy should develop a plan to improve energy efficiency with connected devices.

The private sector will be more likely to embrace the Internet of Things if government leaders are paving the way for deployment. At the state and local level, governments should lead by example and make “smart” the default for all new investments, incorporating the Internet of Things into public infrastructure projects and restructuring practices around the new capabilities of this technology.

Governments can also foster growth of the Internet of Things by removing certain regulatory barriers and better aligning the overall legal framework to the needs of the technology as it develops.

For example, the cumbersome review processes for low-risk medical devices can average two and a half years and cost a company approximately $500,000 per month. These market barriers can be enormously discouraging for entrepreneurs trying to develop potentially lifesaving technologies. In addition, with the incredible potential for the Internet of Things to collect an unprecedented amount of high quality data, regulations that increase the cost of this collection or prohibit data sharing and reuse can be damaging.

There may be one primary reason to collect data, but one hundred good applications of this data beyond its initial purpose. In order to maximize the social and economic benefits of information, data users of all kinds acting in good faith should be able to share and reuse data with ease.

Many technologies are often met with fear, uncertainty, and doubt, especially by those who are unfamiliar with them or opposed to change. Policymakers cannot afford to succumb to these forces if they expect to enable society to take full advantage of the Internet of Things.

In particular, policymakers should be extremely cautious about regulating on the basis of purely speculative concerns that might not even come to pass, especially when doing so might curtail substantial economic and social benefits. However, policymakers should intervene promptly if specific problems arise. In doing so, they should be careful to ensure that their rulemaking targets specific, demonstrated harms. Attempting to erect precautionary regulatory barriers for purely speculative concerns is not only unproductive, but it can discourage future beneficial applications of the Internet of Things.

While many of the future challenges of the Internet of Things may still be unknown, policymakers should commit to advancing this technology responsibly, rather than cripple it with unnecessary or overbearing regulations. The success of the Internet today can be credited in part to policymakers actively taking a role to ensure its growth, and this same approach should to be applied to build the Internet of Things.

Daniel Castro is director of the Center for Data Innovation, a nonprofit, nonpartisan research institute in Washington, D.C., and and coauthor of the report "10 Policy Principles for Unlocking the Potential of the Internet of Things." Joshua New is a policy analyst at the center.