The internet of things (IoT) is connecting smartphones, tablets, laptops, and home and business devices at a dizzying rate. The IoT is a network that links devices and people through internet protocol (IP) connectivity, often without human intervention. Analysts expect the IoT will connect 24 billion devices globally by 2020, which translates into four connected devices for every person on earth.[1]

The IoT enables sensors, software, computers and other devices to seamlessly connect through the cloud to merge physical objects such as machinery with digital technology. This matrix links devices and generates new data to speed business processes and improve production, efficiency, service and process management.

The economic impact of the IoT cannot be underestimated. McKinsey Global Institute predicts IoT technology will have an annual global economic impact of between $3.9 trillion and $11.1 trillion by 2025.[2]

With the IoT’s expected benefits come risks. McKinsey researchers caution that concerns about weak security with the IoT may slow its adoption.

Businesses and consumers alike are concerned about confidentiality and the privacy of data they share through their devices across the IoT. Although an individual device may be secure when used independently, connecting it to the IoT opens up new vulnerabilities for the device and the data it provides. Businesses are concerned about confidentiality and intellectual property rights when their data is shared across the IoT.

The IoT does not have common standards to define how different devices should interact. Industry standards for IoT devices are either non-existent or still in their early phase, and no common standard exists across industry sectors. This limitation makes it difficult for developers to create end-to-end security solutions.[3]

Many fear the IoT may expose their data, systems and devices to hacking. There is concern hackers could exploit seemingly benign devices through the IoT to take down electrical grids, hydroelectric dams, power stations and chemical plants.[4]

Companies participating in the growth of the IoT, such as semiconductor manufacturers and technology developers, must work together to overcome these security challenges before connected IoT devices will gain full acceptance by the public and industrial sectors. Once these challenges are addressed, the IoT will truly form an integrated matrix that’s expected to redefine how the world operates.

[1] “How the Internet of Things will affect security & privacy,” by Andrew Meola, Business Insider, Dec. 19, 2016. Available at: http://www.businessinsider.com/internet-of-things-security-privacy-2016-8

[2] “Security in the Internet of Things,” by Harald Bauer, Ondrej Burkacky, and Christian Knochenhauer, McKinsey & Company, May 2017. Available at: https://www.mckinsey.com/industries/semiconductors/our-insights/security-in-the-internet-of-things

[3] “How the Internet of Things will affect security & privacy,” by Andrew Meola, Business Insider, Dec. 19, 2016. Available at: http://www.businessinsider.com/internet-of-things-security-privacy-2016-8

[4] “How the Internet of Things will affect security & privacy,” by Andrew Meola, Business Insider, Dec. 19, 2016. Available at: http://www.businessinsider.com/internet-of-things-security-privacy-2016-8

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