A special report (from economist)

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A special report on smart systems

It's a smart world

The real and the digital worlds are converging, bringing much greater efficiency and lots of new opportunities, says Ludwig Siegele. But is it what people want?

Nov 4th 2010

WHAT if there were two worlds, the real one and its digital reflection? The real one is strewn with sensors, picking up everything from movement to smell. The digital one, an edifice built of software, takes in all that information and automatically acts on it. If a door opens in the real world, so does its virtual equivalent. If the temperature in the room with the open door falls below a certain level, the digital world automatically turns on the heat.

This was the vision that David Gelernter, a professor of computer science at Yale University, put forward in his book “Mirror Worlds” in the early 1990s. “You will look into a computer screen and see reality,” he predicted. “Some part of your world—the town you live in, the company you work for, your school system, the city hospital—will hang there in a sharp colour image, abstract but recognisable, moving subtly in a thousand places.”

Even two decades later that sounds like science fiction. But this special report will argue that Mr Gelernter was surprisingly prescient: mankind is indeed building more and more “mirror worlds”, or “smart systems”, as they are often called. The real and the digital worlds are converging, thanks to a proliferation of connected sensors and cameras, ubiquitous wireless networks, communications standards and the activities of humans themselves.

In this special report

This convergence may not be instantly discernible, because it is happening in many places at once and is often not understood for what it is. It is most advanced in controlled environments. For example, software developed by Siemens, a technology conglomerate, maintains virtual replicas of factories to monitor and reconfigure them. But it is spreading everywhere and has developed a language all of its own. Glen Allmendinger of Harbor Research, a consultancy, calls it the “virtualisation of the real world”. Researchers at MIT’s Media Lab who connect real-life objects with copies in Second Life, a virtual world, refer to the result as “cross reality”. Google’s Earth and Street View services are the first, if static, replicas of the entire world; sensors placed in cows allow the tracking of their every move from birth to abattoir; smart power meters tell utilities in real time how much electricity is used.

The many uses of smartphones

Yet it is the smartphone and its “apps” (small downloadable applications that run on these devices) that is speeding up the convergence of the physical and the digital worlds. Smartphones are packed with sensors, measuring everything from the user’s location to the ambient light. Much of that information is then pumped back into the network. Apps, for their part, are miniature versions of smart systems that allow users to do a great variety of things, from tracking their friends to controlling appliances in their homes.

Smartphones are also where the virtual and the real meet most directly and merge into something with yet another fancy name: “augmented reality”. Download an app called “Layar” onto your smartphone, turn on its video camera, point at a street, and the software will overlay the picture on the screen with all kinds of digital information, such as the names of the businesses on the street or if a house is for sale.

These and other services are bound to grow together into what Jan Rabaey, a computer scientist at the University of California at Berkeley, grandly calls “societal information-technology systems”, or SIS. Technological progress is sure to supply the necessary components. Moore’s law, which holds that the processing power of a single computer chip roughly doubles every 18 months, applies to sensors, too.

More processing power and better connectivity also allow the construction of computing systems capable of storing and crunching the huge amounts of data that will be produced by these sensors and other devices. All over the world companies are putting together networks of data centres packed with thousands of servers, known as “computing clouds”. These not only store data but sift through them, for instance to allow a smart system to react instantly to changes in its environment.

The next big thing

Information-technology (IT) firms have identified smart systems as the next big thing. Predictably, the most ambitious designs have been produced by the industry’s giants, particularly IBM, where Sam Palmisano, the firm’s boss, made smart systems a priority. A couple of years ago the company launched a campaign called “Smarter Planet”, touting digital technology that would make energy, transport, cities and many other areas more intelligent. Other firms have followed suit, each with a different take reflecting its particular strengths.

Cisco, the world’s biggest maker of networking gear, is trumpeting “Smart+Connected Communities”. Hewlett-Packard, number one in hardware, intends to spin a “Central Nervous System for the Earth”. Siemens and its competitor General Electric, which are more at home in the physical world, plan to put together lots of smart systems in which they can deploy their deep knowledge of certain industries, such as health care and manufacturing. And there is a growing wave of “smart” start-ups, offering everything from services to pinpoint a devices’s location to platforms for sensor data.

Governments, too, have jumped on the bandwagon. Many countries have been spending large chunks of their stimulus packages on smart-infrastructure projects, and some have made smart systems a priority of industrial policy. The “internet of things”, another label for these systems, is central to the European Union’s “Digital Agenda”. The main contenders in this market are countries that are strong in manufacturing, above all Germany and China.

But the bandwagon is not just rolling for the benefit of technology companies and ambitious politicians. It has gained momentum because there is a real need for such systems. In many countries the physical infrastructure is ageing, health-care costs are exploding and money is tight. Using resources more intelligently can make taxpayers’ money go further. Monitoring patients remotely can be much cheaper and safer than keeping them in hospital. A bridge equipped with the right sensors can tell engineers when it needs to be serviced.

China is a good example. It is becoming urbanised on a scale unprecedented in history. By 2025 an additional 350m Chinese—more than the current population of the United States—will have moved to cities, according to a study by McKinsey, a consultancy. Without an infrastructure enhanced by digital technology it will be very hard to provide the country’s newly urbanised population with enough food, transport, electricity and water.

Most important, smart systems may well be humankind’s best hope for dealing with its pressing environmental problems, notably global warming. Today power grids, transport systems and water-distribution systems are essentially networks of dumb pipes. If the power grid in America alone were just 5% more efficient, it would save greenhouse emissions equivalent to 53m cars, calculates IBM. In 2007 its congested roads cost the country 4.2 billion working hours and 10.6 billion litres of wasted petrol, according to the Texas Transportation Institute. And utilities around the world lose between 25% and 50% of treated water to leaks, according to Lux Research, a market-research firm.

With so much to gain, what is there to lose? Privacy and the risk of abuse by a malevolent government spring to mind first. Indeed, compared with some smart systems, the ubiquitous telescreen monitoring device in George Orwell’s novel “1984” seems a plaything. The book’s hero, Winston Smith, would soon have a much harder time finding a corner in his room to hide from Big Brother.

Second, critics fear that smart systems could gang up on their creators, in the way they did in “The Matrix”, a 1999 film in which human beings are plugged into machines that simulate reality to control humans and harvest their bodies’ heat and electrical activity. Fortunately, such a scenario is likely to remain science fiction. But smart systems might be vulnerable to malfunctioning or attacks by hackers.

Third, some people fret that those with access to smart systems will be vastly better informed than those without, giving them an unfair advantage. Mr Gelernter highlighted this risk in “Mirror Worlds”.

There are plenty of other concerns, and unless they are dealt with they could provoke a neo-Luddite reaction. The world has already seen one extreme example: the Unabomber, a disaffected American who targeted, among others, computer scientists with mail bombs. Two years after the publication of “Mirror Worlds” he sent one to Mr Gelernter, who was seriously injured—though fortunately he survived.

A special report on smart systems.doc