Occasionally an invention comes along that inspires only one possible reaction: “This is going to change everything.” For the field of corporate responsibility, the Internet of Everything (IOE) is that game changer.
The IOE can be defined as “the intelligent connection of people, processes, data, and things.” The devices that make up the IOE are hugely varied; they include the FitBit on your wrist, the coffee pot that turns on via your smartphone, and the drones that—Amazon assures us—will soon be delivering our packages.
Combined, these elements form something more than the sum of their parts. Smart energy grids, for example, combine inputs from devices in homes and offices with inputs from power providers to determine when and where we use energy, changing cost to reflect demand and ultimately decreasing overall energy use.
By any measure, the IOE is going to be revolutionary. Cisco estimates that the IOE will produce $14.2 trillion in saved costs and increased revenues between 2013 and 2022. Applying IOE tools to corporate responsibility and economic development challenges could multiply that impact exponentially.
Why? Right now, corporate responsibility initiatives are hampered by four main challenges: poor traceability, supply chain inefficiencies, environmental sustainability, and impact measurement. The IOE can make substantial contributions to addressing all four.
1. Poor Traceability
Companies often have at best a vague idea of what social or environmental conditions define their supply chains, in part because it is genuinely quite hard to trace the origins of multiple inputs across large, global value chains. These opaque sourcing strategies result in low accountability and high reputational risk—just ask companies like Primark, where unauthorized subcontracting exposed them to vocal criticism following the collapse of the Rana Plaza garment factory in Bangladesh. The IOE could address this by adding sensors to products or packing from the commodity level onward, telling purchasers exactly where their products originated and what paths they took. This would make it harder for second- and third-tier suppliers to hide; help companies manage risk; and, given sufficient transparency, allow customers and regulators to hold substandard companies to account.
2. Supply Chain Inefficiencies
Supply chain inefficiencies include low output, low quality, and waste. The IOE already boasts a host of technologies to tackle each. For instance, farmers can implant soil sensors that provide ongoing information on quality and nutrient content. Linked with big data analysis, this could inform them of what and when is best to plant. Combined with smart storage, which monitors temperature and moisture to reduce waste, farmers could produce more and sell more. Applying these technologies would help companies sourcing from farmers ensure that the people they are buying from can make a fair living.
3. Environmental Sustainability
Resource scarcity and climate change are on course to increase corporate responsibility challenges, but the IOE can address both. For instance, soil sensors like those above could reduce water use in the United States by 20 percent, and smart tractors that run automatically on tracks exactly plotted to the size and shape of farm plots could reduce fuel use by 16 million gallons. Combined with big data analysis, IOE devices would help companies identify exactly where their greatest environmental risks lay and address them before scarce resources become extinguished resources.
4. Impact Measurement
Finally, even companies working at the forefront of inclusive business are hard-pressed to identify the exact social, environmental, or financial returns of their efforts. The IOE can help here as well. For instance, most results now are tracked through one-time sampling, but with the IOE companies could gather them on an ongoing basis and in real time, providing a much more accurate sense of what works and why.
Could this really work? One could forgive critics for reading what seems like an idealized future, comparing it with the decidedly imperfect status quo and dismissing it as utopian, but this would be short-sighted.
The technology to enable large-scale change is closer than many appreciate. Already, the majority of machine-to-machine connections exist outside the “developed” world. It seems increasingly likely that much of the developing world will leapfrog the incremental evolution of the Internet experienced by early adopters and jump directly to the IOE, as one article expresses, “much like cell phones have allowed developing nations to leapfrog landlines.” Corporate responsibility initiatives powered by the IOE will both drive the adaption of new technologies and help address persistent responsibility challenges.