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In a background report from the Organisation for Economic Co-operation and Development (OECD) for a ministerial panel, the authors provided this definition:

IoT refers to an ecosystem in which applications and services are driven by data collected from devices that sense and interface with the physical world. In the Internet of Things, devices and objects have communication connectivity, either a direct connection to the internet or mediated through local or wide area networks. (Working Party on Communication Infrastructures and Services Policy, 2016, p. 9)

Another aspect of the IoT is the industrial internet of things (IIoT). This considers IoT on an industrial scale, where, within towns and cities, different elements are connected, such as traffic lights and pollution sensors, drains and surface water output, outdoor temperatures and heating systems. The typical aspects that contribute to the IIoT are focused on improving energy production, healthcare, manufacturing and logistics. This has become a recognised phenomenon and there is a dedicated Industrial Internet Consortium, founded by organisations including IBM, Intel, General Electric (GE) and other technology companies.

Part of the IIoT is the concept of Smart Cities, which have been described by Yasir Mehmood and his colleagues as a ‘complex ecosystem characterized by the intensive use of information and communications technologies (ICT), aiming to make cities more attractive and more sustainable, and unique places for innovation and entrepreneurship’ (Mehmood et al., 2017, p. 16).

The move towards the smart city concept is only possible with sensors, cameras and mobile devices collecting and sharing data, part of which revolves around big data (see Key Term). The issue is whether you, as a future citizen of big cities, are happy being tracked, monitored and shared through an ecosystem.

There is a dark side to the Internet of Things, which is well described by researchers David De Cremer, Bang Nguyen and Lyndon Simkin who highlighted potential abuses at different stages from transaction, gathering knowledge, the ongoing relationship and integrity. The main issues raised were (De Cremer et al., 2017, p. 150):

 Information misuse – abusing the data held about the customer

 Privacy issues – collecting health and personal fitness data and selling online

 Switching barriers – making it less attractive or difficult to switch providers

 Favouritism and discrimination – micro-segmentation based on shared customer behaviour

 Unfairness – discriminating against certain user types, such as higher prices to Mac users

 Dishonesty – cross-selling potentially unwanted or unneeded products based on behaviour

 Financial penalties – only benefiting clients wearing fitness devices and penalising those that won't

 Confusing customers – only providing complex pricing models