This “Internet of Everything” has the potential to transform dozens of industries and create innovative ways of working, manufacturing, learning and managing complex systems. With these changes come opportunities to create new businesses, new innovations, and new jobs. Cisco estimates that there is some $14.4 trillion in value at stake over the next ten years with the adoption of the “Internet of Everything.” This means a potential 2 percent increase of global GDP every year for the next decade.
In agriculture, for instance, this means that real-time decisions can be made about irrigation water flows to maximize crop yields. In the oil and gas industry, this means that operations can be made more efficient so that fuels get to where they are needed at the right time, with increased safety, minimal leakage and reduced downtime. And in transportation systems, this means streamlined traffic and safer highways, as well as supply chains that are more efficient, less wasteful, and less costly.
America has historically been the leading driver of technological change. This time, however, there's no guarantee that the next game-changer will come from a garage in Palo Alto or a loft in SoHo. It could just as easily come from a lab in Bucharest, or Bangalore, or Beijing.
So the U.S. needs to act now, to best position our country for this next wave of technological innovation, job creation and economic growth. Policymakers should focus on five fundamental areas:
1. Talent – Our country has to do a better job of training the next generation of innovators and entrepreneurs. India and China graduate nearly 1 million engineering students annually, compared with 120,000 in the U.S. We have to focus on improving STEM education in America and attracting students to these fields at an early age.
At the same time, we have to ensure that America attracts the best, brightest and most ambitious minds from around the world. Consider these two facts: 28 percent of all companies started in the US in 2011 had immigrant founders, and immigrant-owned businesses generated more than $775 billion in revenue for the economy in 2011. So, high-skilled worker reform is not only the right thing to do, but it will create jobs and spur innovative companies.
2. Telecommunications and Broadband– Mobile data in the United States in 2017 will be 687 times greater than it was in 2007, largely due to increased consumption of mobile video. New applications associated with the Internet of Everything will require high-speed broadband not just in urban areas but in rural areas as well. That is why it is so imperative that Congress and the FCC continue to support broadband infrastructure and more licensed and unlicensed spectrum for broadband and Wi-Fi.
3. Trust – The Internet of Everything will only reach its full potential if businesses and consumers have confidence in the security and privacy of the systems they are using. This is especially important given the very real cybersecurity threats that exist today with the increasing importance of “big data.” The federal government should deepen public-private partnerships, as well as encourage the private sector to continue to drive innovation and security into products and the network, based on interoperable global standards.
4. Tax – Our tax system is broken. We need a system that encourages businesses to invest in this country, driving new rounds of research and development and innovation. To accomplish this, we need a lower, more competitive corporate tax rate and move to a modern international tax system that will encourage investment and job creation in the U.S. If we do not, our global competitors will have a significant advantage.
5. Trade – Free trade is absolutely critical to opening new markets and new opportunities for American companies. Free trade agreements, such as a proposed one between the U.S. and E.U., can help level the playing field and open the door to substantial opportunity, helping ensure American leadership.
The simple truth is that the Internet of Everything represents another tipping point when it comes to technology innovation. The countries and companies that adapt to this changing world will win the lion’s share of growth and opportunity, while those that don’t will face stiff headwinds. We stand ready to work with our leaders to understand these changes and prepare for the future.
Lloyd is the president of Cisco.