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2015 Corporate Responsibility Report

Focus: Challenges of the Internet of Things

As individuals and households, we are becoming ever more equipped and connected with electronic devices and, ultimately, with semi-autonomous networks of communicating objects – the Internet of Things (IoT). Imagine, for example, your refrigerator automatically reordering milk and other items according to your user preferences via the internet and organising home delivery. Or your refrigerator might advise you on your diet, taking into account the sports activity data retrieved from your smart phone or health wearable device. Other examples are individualised temperature, lighting and air ventilation systems that optimise room climate via sensors, shades, heaters and air conditioning. Such integrated and self-regulating digital systems allow for increased resource efficiency, healthier lives and better comfort.

Smartphone in front of a landscape (photo)

The Internet of Things (IoT) makes it possible to operate home appliances remotely via mobile devices. While the benefits of this are obvious, ever-growing interconnectivity also creates risks concerning network and data security. This is why we treat the IoT as an “emerging risk”.

The multitude of available (micro-)sensors, data collectors and software to manage these large data flows is already huge. Our connectivity is growing exponentially regarding variety, speed and relevance.

While the benefits of IoT are obvious in terms of individual consumer experiences and managing organisations and societies, the risks should not be ignored. The top challenges concern network and data security. Generally speaking, security is not the number one priority of device developers and, the more connected individual devices and protocols are, the more vulnerable they become to malfunction, loss of data or hacking. Growing interconnectivity also leads to accumulating loss potential, meaning that a small local incident can have significant cascading effects.

The IoT also raises important questions about the use and distribution of personal data, the protection of privacy and, ultimately, how these matters should be regulated. As knowledge gathering, communication and decision-making activities shift from humans to machines, traditional regimes of accountability and responsibility will be challenged.