27 january 2016

Making the Transition to the Internet of Things

We have been hearing over the last several years that the labor market is undergoing rapid changes in its structure  - some professions are dying out, others are emerging. Many of us have heard predictions about the imminent disappearance of such jobs as a travel agent, a lecturer, a librarian followed by a legal adviser, a notary, a pharmacist, an analyst, a realtor, a logistician, a journalist (for the complete list see the ASI Atlas of Emerging Jobs study).

How and why does this happen? It is a gradual process: everything begins with experiments to replace a human worker with a certain technology, then it becomes a wide-spread tendency, and the society itself makes a decision regarding the ultimate uselessness of a certain profession.

The experiment to replace a human laborer with a technology includes the Internet of Things - the concept of "interconnected things" , applicable in any area where there is a need to connect  a large number of objects (using both wireless or wireline services) and control them via the Internet.

Objects are embedded with sensors that collect data online, there are created communication channels and a digital platform where incoming data is processed and where decisions are taken and implemented.

The Internet of things is an opportunity to delegate most of the work currently done by humans  to machines: robots help  to optimize solutions, and humans have new ways to manage time, resources and finances. The  Internet of things most actively finds its way into the manufacturing sector:  the "smart factory" is today the same trend as the "smart city", about which so much has been written.

At first glance, embedding microchips is just a technical function, however, the economic benefits can be huge, as it reshapes the entire industry: in the case of the Internet of Things application in the manufacturing sector  the point of issue is the “relationship” between industrial robots. Changes occur immediately on several levels: the factory itself changes, there are changes in new product design principles, in the whole processing chain and in the principles of consumption of industrial goods.

Actually, our research on the Internet of Things started with the Industrial Internet: we responded to the emergence of the sensational "Industry 4.0" concept , declared by the Germans as the next generation of production systems. According to this concept, industrial robots in five years will  be able to understand what is going on around and communicate with each other over the Internet protocol.

We are witnessing  creation of cyber-physical systems – combination and coordination between  physical elements ( a concrete equipment and an object), and computational elements, showing behavior of objects using  an augmented reality.  

This principle of work will be gradually introduced through the modernization of existing production facilities, and therefore it is suitable not only for completely new enterprises, but for all those that can be modernized.

The question is:  what happens to human laborer during the process of robotization?  It is obvious that structural reorganization of the labor market associated with the emergence of digital technologies will affect the operating service personnel in processing industries: it reduces the need for people, and those engaged in services will have to be retrained.

A technician should be able to operate a physical object and understand the informational component, i.e. he needs to have IT skills. While the lower-level personnel will receive training and retraining, part of the top-level personnel will shift to other positions: at present, the most in demand professions include system programmers, analysts and data analysts.

The employment forecasts (in the USA, for example, there are made five- and seven-year  skills demand forecasts) clearly  show  sectors  that are expected to grow in  terms of salaries and the number of employees. This includes all  industries associated with advanced systems engineering, digital control, big data analytics, specialized analytics. At the same time, the basic traditional sectors will decrease in volume: accordingly, people employed in these sectors will have to be trained for new occupations.

This is the normal process: the industry changes and the labor market demands  are changing accordingly.  Some15 years ago, we witnessed significant growth in services - both in terms of the number of employees and those involved. Programmers became popular several years ago. Now there is a huge demand for system programmers, analysts and big data experts: these skills are most needed in those areas where we see significant technological modernization and new technological processes.