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Life With the Internet of Things: The Beginning or End of Data Privacy?

August 17, 2016 by Kai Goerlich 122

Very soon, our society will be awash in data – thanks to devices and sensors enabling the Internet of Things (IoT). According to McKinsey, the IoT’s economic impact could reach as high as US$11 trillion – approximately 11% of global economic value – within the next 10 years.

And the same time, the number of IoT devices and sensors is estimated to grow to several trillions, dwarfing today’s total of 15 billion. Whatever the exact figures, this ambient intelligence will inevitably bring an exponential growth of data from approximately 5 zettabytes today to 35 ZB in 2025, measuring and tracking every aspect of our lives.

Compared to the data tsunami ahead, security and privacy issues of the current Internet and mobile phones seem minuscule in scale. However, today’s IoT situation falls short of respecting privacy. In his New Scientist article “The Web We Want,” Hal Hodson explains that people want convenience, and, in return, they are willing to let companies such as Google, Facebook, Amazon, and many more sponge up our accessible privacy data.

With its wearables, connected cars, networked running shoes, and a host of other hyperconnected things, the world of the IoT is positioned to give companies and organizations even more opportunities to collect data and use it to their advantage.

To Share or Not to Share Private Data

The consumer market is quite schizophrenic when it comes to data sharing – even though most of us do freely provide it when asked. A recent eMarketer report on best practices for consumer privacy and personal datashows found that 50% of smartphone owners don’t want to share any data with advertisers, and an additional 25% believe that very little information should be collected. eMarketer rightfully acknowledges that these views may seem unrealistic in today’s digital world, but we should consider the underlying privacy issue more than we think about the mountain of IoT-generated data to come.

It’s true that millennials and Gen Z tend to share their information with greater ease, showing signs of their digital upbringing. Yet, it appears that they could also be more guarded than we think. According to eMarketer, millennials are most likely to share demographic or contact information rather than personally identifiable or financial information – limiting the openness of the Internet to a minimum.

The bigger problem is that consumers have no idea – and mostly no way to find out – what data is being collected and what companies will do with it. According to a 2015 report from Pew Research Center, the majority of U.S. Internet users want control over who collects, maintains, and uses their personal information. Unfortunately, the reality is far away from that demand – and adding more data collectors to join the game may not be the best way forward to build trust and brand loyalty.

What Is the Value of Your Digital Data Twin?

Warning: If you do not want to be frustrated, don’t do this. But if you want to know the value of your private data, then try the Financial Times calculator. Very obviously, the dollar value is in striking contrast to the emotional value we give our own privacy.

To help consumers regain control over their information, W3C’s Solid project is separating data from the apps and services that process it, according to the New Scientist. This innovative thinking would allow people to decide and approve whether and when their data goes live – for example on a smartphone, from a laptop, or in the cloud – and stop default data collection from our devices, sensors, and apps.

A parallel idea is followed by the UK company Maidsafe. Its researchers are using a peer-to-peer network based on encryption and the blockchain to separate data from a service. Obviously, decentralization of data is the most current trend.

Nevertheless, this is still one fundamental question looming in the background: What is the optimal way to mediate the commercial interests of data companies and private interests? And it’s not just consumers who are concerned about the security and data issues. According to eMarketer, businesses view IoT security as a rising form of complexity when gathering data.

Separating Data from Processing

The problem of private data will certainly increase as the number of connected devices and the strength of their capabilities grow. When we look at the projected IoT devices and sensors and the amount of data they will generate, we need a better alternative for handling this data – rather than just handing over our most precious private data in return for some apps. If you want to use the benefits of digitization for our societies, we have to come up with a much fairer deal than what we have now.

For more insight on respecting customers’ privacy, see Live Businesses Deliver a Personal Customer Experience Without Losing Trust.

Kai Goerlich is the Idea Director of Thought Leadership at SAP.

This story originally appeared on The Digitalist as part of the 10 Weeks of Live Business series.

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