An Outline of the Project
Dr. Robert Cohen, Fellow, Economic Strategy Institute, Project Director
(click here to download PDF)
- This study explores the economic impact of the “New IP” – the broad ecosystem linked to cloud computing and software defined infrastructure for computing, data storage and networking that includes containers, tools for data analysis such as Hadoop and MapReduce, data lakes and data analytics – as well as the impact of the Internet of Things.
- It will forecast enterprises’’ use of the New IP including cloud infrastructure technologies, the Internet of Things and related technologies such as 5G wireless for the next 10 years. It will quantify investment, productivity and workforce impacts.
- The study will define the likely impact of the “New IP” and Internet of things and related changes in infrastructure technologies on the US and other economies through 2025. We will also evaluate the impact these innovations will have on jobs.
- A related purpose is to use this effort to obtain a better understanding of how entrepreneurs innovate in the new digital economy using case studies and quantitative analysis. We plan to highlight the connection between innovation and jobs.
Some of the key questions the project will explore include:
- What is economic impact of the adoption of the New IP Internet of Things; cloud computing and virtualization; containers; software-defined networks;? and
- What is the impact of the New IP and Internet of Things on productivity, growth, investment, and changes in the structure of work?
We will define the “New IP”1 as a state-of-the-art, virtualized IP infrastructure and/or network. For entrepreneurs and service providers, networks built on The New IP save money on capex (capital expenditure) and opex (operational expenditure). The Old IP represents utilitarian communications or computing infrastructure that is not virtualized and doesn’t reduce capex and opex. For the purposes of the present study, we extend this terminology to new large and smaller enterprises, particularly to “tech innovators” that employ many “New IP” features in their networks. These innovators are also concerned ith reducing capex and opex. The chart below summarizes the main differences between the “Old IP” and the “New IP.”
We will define the Internet of Things as infrastructure that “connects devices such as every day consumer objects and industrial equipment onto the network, enabling information gathering and management of these devices via software in order to increase efficiency, enable new services, or achieve other health, safety, or environmental benefits.”
What does the Internet of Things change? Information technology connects “production, marketing and logistics and thereby captures all resources, production facilities and ware-housing systems.”
This means changes occur in business models, work organization, and downstream services. In addition, by “integrating cyber-physical systems into production and logistics” and through a “rigorous end-to-end implementation of the internet of things and services in industrial processes” as well as services:
- “Business processes can be structured more dynamically”
- “Seamless data collection enables the rapid use of production-relevant data for near-term decision-making regardless of the location”
- “Individual customer-specific criteria concerning design, configuration, ordering, planning, production and operation as well as enabling modifications to be made at short notice” including one-offs in autos and furniture.
In this project, we plan to provide scenarios with specific forecasts of enterprise uptake of technologies used in the “New IP” technologies and the Internet of Things. For the “New IP,” this will include spending and/or investment in software defined networking, network functional virtualization, and other virtualized technologies such as containerization. We will quantify investments and spending on The Internet of Things and assess their impact on costs and productivity.
We will also analyze information about the changes in the types of new jobs enterprises expect to create when they adopt of the “New IP” and Internet of Things. We will estimate the additional jobs created and jobs lost because of the adoption of the “New IP” and Internet of Things. We will also develop industry estimates for these job shifts and use them to modify a US Bureau of Labor Statistics employment forecast for 2012-2022. We will adjust the forecast to reflect how the adoption of the “New IP” and Internet of Things is likely to affect employment. We expect to see job losses in some areas that will need fewer employees such as data center management. Initial work suggests that there will also be new positions to oversee Internet of Things networks and to support data analysis and service delivery. These jobs will help firms define how these new technologies can be employed to benefit specific lines of business.