Of Economics, Transformations and Smarter Machines

Nest

Google acquired Nest technologies recently

All of us share the tendency to accept and get used to the things which we are told are commonplace, none of us worry about the fact that we commute while sitting on litres of gasoline or for that matter are fascinated by the fact that the invention of the gasoline driven engine and electricity coincided. It would have been quite a tale had capital initially supported research into an electricity run automobile as opposed to a gasoline run automobile. Of course, it is always easier to be amused by the past. The uncertainty and the lack of clarity which pervades talk of the future, prevents most from actively witnessing the twists in the evolutionary tale. However, there is greater joy to be obtained in observing the technological changes that are taking place today.

One of the more defining changes that is occurring at present is the transformation of internet from the “internet of communication and analysis” to the “internet of things”. In this analysis, the primitive classification of activity i.e. raising things, making things and transporting things remains relevant even in the modern day complexities of society. All that has changed is the nomenclature. The modern economist now divides activities into the primary, secondary and tertiary sector. The same classification can be used as a yardstick for measuring the progress of internet.

At present, majority of internet’s influence is limited to the tertiary sector; it functions as facilitator of economic and social activity. Enterprise on the internet primarily consists of online marketplaces, search engines and social networks. One needs to go only as far as the source of revenue of these enterprises to classify their activities. Online marketplaces are sellers obtaining revenue from the service of making goods accessible across geographical borders at cut-throat competitive prices whereas search engines and social networks are dependent on advertising for their revenue. All of these are tertiary sector activities and are representatives of a category which has often been classified as “consumer internet”.

It can only be imprudent to think that the use of internet would be restricted to the aforementioned activities. Google’s recent acquisition of Nest is reflective of the changing nature of internet. Nest is a home automation company which makes thermostats and detectors. These thermostats record and learn about the temperatures that a person favours. In addition to that, they can be controlled from anywhere over a wi-fi network. One simply needs to login to their nest account to change the temperature while working on their device. They can also adjust various other settings and track energy consumption. In fact, the next step in this chain of events is going to be the interaction of various devices. Google’s acquisition of Nest highlights the transformational effort of the now traditional internet enterprise into one that manufactures products which utilise the ability of the internet.

What is this ability? It is the ability to store, transport, analyse and respond to data that is available. The internet assists in the storage and transportation of data. The ability to utilise this function shall in time, transform both, the process of manufacturing as well as the manufactured product. At present, the machines that we use have evolved enough to reach a state where my air-conditioner switches off if we open a door or a window but the possibilities it offers are endless. The “internet of things” seems closer than ever and like every other technological breakthrough, it will be commoditized and shall soon become a part of the mundane household but it is one thing to acknowledge evolution in retrospect and it is entirely another to anticipate evolution and witness the buzz that surrounds the various events that take us there. I hope this article helps put many in the latter category.

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One thought on “Of Economics, Transformations and Smarter Machines

  1. we are doomed to be controlled by forces that decide how and to what end this “internet of things” will function. this is why privacy and assertion of individual rights in the digital sphere are so crucial. Imagine Google deciding what temperature your room ought to be. It already decides what results you ought to see in your searches (ie, results pages are tailored for different demographics given the same search entry) and the things you ought to be interested in. Down with Google, down with fascism on the internet! Free software for one and all!

    Liked by 1 person

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