My piece in Harvard Biz Review blaming #370 crash on lack of “Internet of Things” thinking!

Hey, everyone else has weighed in with an explanation on why Flight 370 crashed, so I did, today, with a piece in the Harvard Business Review blog in which I blamed it on lack of “Internet of Things thinking.”

May sound crazy, but I think it’s true, because of two of my “Essential Truths” about the IoT — two things that we can do now but never could before, which open up a huge range of possibilities for change:

  • limitless numbers of devices and people can share the same data on a real-time basis
  • for the first time, we can get real-time data on how devices are actually operating, even conditions deep within the device

In this case, if Malaysia Air had only been willing to pay $10 more per flight, it could have had a wide-ranging flow of real-time data from the plane’s engines. Under regular conditions this data could have allowed the company to tweak the engines’ performance, while also allowing them to do “predictive maintenance,” catching minute problems as they first emerged, in time to make safe, economical repairs rather than waiting until a catastrophic failure.

AND, it also would have allowed them during the crisis two weeks ago to have immediately switched to monitoring the engine data when voice transmissions ended, so they would have known immediately that the plane was still flying, in time to have launched planes to intercept the plane and land it safely.

HOWEVER, what was missing was this “Internet of Things thinking,” so they didn’t think expansively about the value of sharing the data.  They saved $10 per flight, but lost 290 people. Somehow the math doesn’t add up…

In case you missed it, great panel today on the IoT and government

Posted on 19th March 2014 in government, Internet of Things, US government

In case you missed it, old friend Christopher Dorobek put together a great (in all modesty, LOL …) panel today for his “DorobekINSIDER” series on GovLoop about how the Internet of Things will transform government.  I’ll try to summarize it in a later post, but you can listen in here!

Crucially important cautionary note about data’s limits!

Posted on 4th February 2014 in Internet of Things, open data, US government

I yield to no one in my passion for liberating data, and for its potential role in improving decision-making. It’s essential to full realization of the Internet of Things, and yes, it can even save lives (not to mention baseball teams, witness Michael Lewis’ wonderful Moneyball!). However, I implore you to read “Why Quants Don’t Know Everything,” a gem by Felix Salmon that’s tucked into the current Wired issue. It documents a disturbing pattern of how decision-making in everything from baseball to, yes, the NSA, can be distorted — with serious consequences, when the “quants” take over completely and data is followed blindly. Salmon begins with the NSA’s insatiable appetite for data:

“Once it was clear that the NSA could do something, it seemed inarguable that the agency should do it—even after the bounds of information overload (billions of records added to bulging databases every day) or basic decency (spying on allied heads of state, for example) had long since been surpassed. The value of every marginal gigabyte of high tech signals intelligence was, at least in theory, quantifiable. The downside—the inability to prioritize essential intelligence and act on it; the damage to America’s democratic legitimacy—was not. As a result, during the past couple of decades spycraft went from being a pursuit driven by human judgment calls to one driven by technical capability.”

Let me emphasize: technical capability came to trump human judgment calls. I suspect there’s probably not too much question among you, dear readers, that the NSA went to far. But Salmon sees a broader problem with unchecked faith in data:

The reason the quants win is that they’re almost always right—at least at first. They find numerical patterns or invent ingenious algorithms that increase profits or solve problems in ways that no amount of subjective experience can match. But what happens after the quants win is not always the data-driven paradise that they and their boosters expected. The more a field is run by a system, the more that system creates incentives for everyone (employees, customers, competitors) to change their behavior in perverse ways—providing more of whatever the system is designed to measure and produce, whether that actually creates any value or not. It’s a problem that can’t be solved until the quants learn a little bit from the old-fashioned ways of thinking they’ve displaced.” (my emphasis)

Salmon goes on to show parallel stages in a wide range of fields where data is in the ascendancy:

  1.  “pre-disruption.” The Neanderthal period, before data is applied to big problems.
  2. disruption.” Example they use is 2012 Obama campaign, where the technologists held sway, targeted voters down to the individual level based on data. You know what happened.
  3. overshoot.” Here’s where things go off the track:”The most common problem is that all these new systems—metrics, algo­rithms, automated decisionmaking processes—result in humans gaming the system in rational but often unpredictable ways. (my emphasis) Sociologist Donald T. Campbell noted this dynamic back in the ’70s, when he articulated what’s come to be known as Campbell’s law: “The more any quantitative social indicator is used for social decision-making,” he wrote, “the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor.”On a managerial level, once the quants come into an industry and disrupt it, they often don’t know when to stop. They tend not to have decades of institutional knowledge about the field in which they have found themselves. And once they’re empowered, quants tend to create systems that favor something pretty close to cheating. (again, my emphasis) As soon as managers pick a numerical metric as a way to measure whether they’re achieving their desired outcome, everybody starts maximizing that metric rather than doing the rest of their job—just as Campbell’s law predicts.”

    He then gives a number of illustrations including “teaching to tests” and, most infamously, the bank meltdown  (I was particularly struck by the one dealing with serious problems in policing: um, it can kill…) that can come as a result of pre-occupation with data. Have you seen this in your field??

  4. synthesis.”  My father used to say that there was an inverse relationship between the amount of education you had and your amount of common sense (he was a little too intimidating for me to point out that he had a Ph.D….).  Here’s where the smart guys and gals learn to put data in perspective:”It’s increasingly clear that for smart organizations, living by numbers alone simply won’t work. That’s why they arrive at stage four: synthesis—the practice of marrying quantitative insights with old-fashioned subjective experience. Nate Silver himself has written thoughtfully about examples of this in his book, The Signal and the Noise. He cites baseball, which in the post-Moneyball era adopted a ‘fusion approach’ that leans on both statistics and scouting. Silver credits it with delivering the Boston Red Sox’s first World Series title in 86 years. (LOL: my emphasis!) Or consider weather forecasting: The National Weather Service employs meteorologists who, understanding the dynamics of weather systems, can improve forecasts by as much as 25 percent compared with computers alone. A similar synthesis holds in eco­nomic forecasting: Adding human judgment to statistical methods makes results roughly 15 percent more accurate. And it’s even true in chess: While the best computers can now easily beat the best humans, they can in turn be beaten by humans aided by computers.”

I’ve been concerned for a while that the downside of vast quantities of real-time data is that decision-makers may ignore time-honored perspective, horse sense, whatever you call it, and may just get whip-sawed by constantly changing data.

So yes, there will be a need for living, breathing managers in the era of the Internet of Things, even ones with grey hair! It will take time, and probably a lot of trial-and-error, but smart companies will attain that synthesis of qualitative insights and “old-fashioned subjective experience.

I beg you: please read this entire article, save it, and share it: it’s a bit of critical insight that may just get drowned out by people like me calling for more, and more rapid, sharing of data. 

Whew. My conscience feels redeemed!

The Hill Publishes Op-Ed on IoT Security and Privacy

Posted on 11th September 2013 in privacy, security, US government

Earlier this week, The Hill, the highly-respected Capitol Hill newspaper, published an op-ed co-authored by Chris Rezendes of INEX Advisors and me on the ever-important topic of IoT privacy and security (or lack thereof!).

In it, we warned that “on the heels of the NSA scandal, news of security problems’ threat to privacy may cripple the IoT before it achieves its promise.”

We went on to explain that:

“The record on security and privacy is not reassuring.

“The Obama administration has almost entirely ignored the Internet of Things (by contrast, it’s frequently mentioned by the Chinese leadership, which has invested massive amounts in the technology) . The president has never mentioned it, and the FTC is the only federal agency that has begun to protect IoT privacy and security.”

We called for public-private collaboration to make IoT security and privacy a priority:

“Individual companies must make privacy and security a priority. Opaque user agreements such as Facebook’s letting the service provider remarket or redeploy user data won’t be acceptable. A recent INEX study of one multi-billion industrial market revealing 96 percent of industrial equipment owner/operators believe they own data from their machines, and access to it is theirs to determine — not the machine’s builder or service providers that connect it. Customers must legally own their online data, determine who has rights to what, and sharing must be “opt in”, with ZERO sharing as the default.

“As for security, companies should explore Resilient Networking, a concept developed for the Department of Homeland Security framing new approaches to network/cyber security in more connected, distributed, automated, and dynamic digital networks.

“But individual efforts aren’t as important as collaborative ones, again, because of the data-sharing that is central to the IoT’s transformative power. We’re encouraged by formation of the IPSO Alliance and the IoT Consortium, which make security and privacy a priority.

“The president must also become involved in this issue. One reason is that the IoT will benefit government: cities worldwide are already applying the IoT, and it can make government in general more effective and responsive. Working closely with the private sector is a priority because 85 percent of the nation’s critical infrastructure, including the electric grid, pipelines and chemical plants, is in private hands, and is the focus of IoT initiatives such as a the “smart grid” to make them more interconnected and reliable – but also more vulnerable to a coordinated attack.”

That’s our opinion on this crucial issue. What’s yours?

P.S. A reminder that these issues will be front and center in  the panel on security and privacy that I will moderate at the IoT Summit, to be held October 1st and 2nd at the National Press Club in DC. Don’t miss it!

More evidence U.S. lags dangerously behind EU on IoT privacy

There’s new confirmation that the U.S. remains dangerously behind the European Union on the twin issues of Internet of Things privacy and security. As I’ve warned before, especially in the context of the continued outrage over the NSA surveillance, if these issues aren’t solved collaboratively by the private sector and government, they threaten to derail the IoT express.

In her Stanford Masters thesis, I believe Mailyn (sic) Fidler accurately summarizes the US’s stance:

“The IoT in the United States is characterized by late but strong entry of companies to the market and by recent, but minimal, interest from the federal government. Specifically, the federal government views the IoT largely as part of the ongoing privacy and security discussion in Washington, D.C. Complicating analysis of the IoT in the United States is that the “Internet of Things” is not a generally recognized term. In the U.S., the IoT is viewed as a natural evolution of American innovation rather than as a unique field.”

http://m3.licdn.com/mpr/mpr/shrink_80_80/p/2/000/0dc/3bd/392d2fe.jpgFidler contrasts this lack of concern by the government to the EU, which, while also

Mailyn Fidler

viewing IoT privacy in the broader context of general privacy policy, has made IoT personal privacy and security a priority — more about that in a future post about the “Butler Project” report):

“The IoT has been a political priority for the European Union. Even with the recent recession, interest and funding in IoT enterprises has not slowed, and the EU has invested 70 million Euros in at least 50 research projects since 2008. In addition to the EU’s hopes that the IoT will bring economic benefits, particularly to small businesses and public institutions, the EU’s interest in the IoT reflects its concerns about who controls emerging technologies. Indeed, EU officials have stated an ambition to build an IoT ‘that will bring about clear advantages for Europe.’

However, despite the EU’s investments, a lack of legislative clarity, slow technical progress, and pressure from international strategic interactions threaten to slow EU efforts to develop a globally competitive, European-centric IoT.

The EU considers privacy a societal priority and has a history of regulating technologies to prevent privacy risks, as its Data Protection Directive indicates. The IoT is no different. The privacy risks the IoT presents, however, are discussed in the context of ongoing data protection reform in the EU. EU officials are debating how to author broad, technology-neutral guidance while, at the same time, many officials seem convinced that technology-specific guidance will be necessary. The EU’s political prioritization of the IoT fuels attempts at lobbying for IoT-specific regulation, as the myriad, overlapping attempts at IoT guidance demonstrate. The IoT’s advancement, then, is mired in this larger debate about the future of technology policy.”

Even with this greater focus, Fidler says the EU hasn’t made as much progress as might be hoped. Only 1 of the 33 2010 Cluster of European Research Projects on IoT explicitly investigated security, and, in a study the same year of IoT standards, only 2 or 175 explicityly investigated security — and none have addressed IoT cybersecurity.

In other words, they ain’t great, but we’re worse (in fact, among US agencies, only the FTC seems to give a fig about the IoT). Pathetic.

Fidler’s report also covers China. You can bet that privacy and security aren’t high on their priority list, LOL.

The EU, while perhaps lagging behind on IoT technology, may get the last laugh on the privacy and security issues. As we’ve seen with successful suits against Microsoft and Google on other Internet issues, the EU has prevailed in the past on questions of privacy and security, and, according to Fidler, it may happen again:

“The EU, faced with the IoT approaches of the United States and China—arguably the leading centers of technological innovation—may stand behind its social parameters and emphasis on new international governance mechanisms as a way of asserting alternative power. With such laws and institutions, economic activities involving the EU and the IoT would have to conform to EU-based standards. The EU, thus, compensates for technological disadvantages in innovation through social and governance parameters. Similarly, the United States and China are seeking to maintain or create their technical edge in new cyber technologies by encouraging unique standards regimes or more aggressive development environments.”

If so, I say bully for them! Someone has to stand up for the individual in this brave new world, and it looks as if the Obama Administration isn’t taking the challenge. Shame!

Fidler concludes that the geopolitical competition among the U.S., E.U., and China may have negative effects on the IoT’s overall growth if it results in incompatible standards:

“This geopolitical competition at such an early stage of the IoT’s development could create international interoperability problems, with negative political, economic, and social consequences. How governments and societies navigate the technological and political aspects of the emergence of the IoT will determine if the IoT’s benefits will be ubiquitously available or if the Internet’s foray into the realm of things will be interrupted.”

FADE TO Youngbloods singing “Get Together”…..