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Connected devices need better governance: Here's how to achieve it

Connected devices: Tablet with an app controls several features in the home such as door lock, lights, washing machine, surveillance camera, music, water use and more. Woman stands in a living room and press the center of the tablet with an icon of a house.

Only 4% of experts say connected devices are safe and secure. Image: Getty Images/iStockphoto

Jeff Merritt
Head of Centre for Urban Transformation; Member of the Executive Committee, World Economic Forum
Madeline Carr
Professor of Global Politics and Cybersecurity, University College London
Andrew Young
Associate Director and Group Chief Innovation Officer, Sino Group
Gilbert Kamieniecky
Head, Private Equity Technology, Investcorp International Inc.
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This article is part of: World Economic Forum Annual Meeting

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  • Rapid growth of internet-connected devices is transforming people’s lives, but mistrust remains.
  • Many experts surveyed expressed a lack of confidence particularly in the areas of ethical use, security and equity.
  • Addressing concerns requires both public and private sectors to develop standards and best practices for safe and secure connected devices.

Continuous technological advancements and the disruption caused by the COVID-19 pandemic rapidly expanded the use of Internet of Things (IoT) in our daily lives. These include various applications in the consumer space, healthcare, education and industry. Some estimates project that by 2025, more than 30 billion connected devices will be online.

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Rapid adoption of this technology outpaces the development of governance structures. This lack of baseline protocols exposes consumers and organizations to increasing risk, as exemplified by numerous high-profile data breaches and cyberattacks.

The “State of the Connected World 2023” report, released at the World Economic Forum’s Annual Meeting, quantifies survey data collected from more than 270 technology experts from around the world. And the data is clear: while connected technology continues to transform our lives, governance gaps impede its full potential.

Public-private collaboration is necessary to develop baseline protocols applicable to all connected devices. This includes universal governance around ethical use, security and equity. The report establishes clear priorities for businesses and government leaders to address the identified risks.

Integrity and ethics

The area that experts flagged more than any other is a lack of protocols around ethical use of data. Some 80% of experts say consumers and organizations don’t have enough information or data transparency, and insufficient data privacy regulation through legislation and policies. Experts also strongly recommend more user education and awareness, and better information sharing between companies, users and regulators.

Users now want more control over their privacy; however, even existing privacy laws still fall short. Collection of personal information still takes place without user consent and, even where there is consent, users may not be fully aware of their decisions due to a lack of digital literacy.

For example, the General Data Protection Regulation (GDPR), considered by many as the precursor to standardizing data protection rules, has proven to face challenges when it comes to enforcement and accountability. Between May and August of 2021, 500,000 online ad impressions utilized in Europe went against the data-collection choices that people made.

Connected Devices and Cybersecurity

The growing reliance on connected devices and related technologies have made organizations, governments and individual users increasingly susceptible to cyberthreats. The first half of 2021 recorded 1.5 billion IoT-targeted attacks globally, while data breaches increased by 15.1% from the previous year.

For this reason, experts cite this as the second-largest area of concern, with more than 70% of experts saying they lack confidence that users of connected devices and related technologies are protected against cyberattacks. This exposure is largely due to underdeveloped regulatory frameworks, technical limitations, lack of end-user knowledge and insufficient incentives for companies to protect users.

Attacks against individuals, businesses and governments can cause significant damage, including financial losses, physical harm, reputational harm and loss of productivity. For example, the financial impact of ransomware attacks is estimated to have cost the world $7 trillion in 2022, making cybercrime the world’s third-largest economy after China and the US.

Equity

Ensuring that connected devices and related technologies are accessible and beneficial to all members of society, irrespective of geography, socio-economic status or other factors, is also a key priority cited by experts. Like all technologies, how they are used and implemented can increase inequality or reduce it. As of now, there are still many barriers to widespread adoption of technologies that would greatly improve the lives of the most vulnerable populations.

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In education, for example, studies show a stark contrast between low-income countries and high-income countries, with only 25% of the former providing any type of remote learning compared to 90% among high-income countries. Additionally, according to the International Telecommunication Union (ITU), in 2021 an estimated 37% of the world’s population, approximately 2.9 billion people, still have not used the internet. Meanwhile, 759 million people still live without electricity.

What can be done

The “State of Connected World 2023” report goes into more detail, but here are some critical steps to protecting individuals, businesses and governments, and ways to build trust and create a more inclusive and accessible IoT:

  • Policy/regulations: Local, regional and federal governments can work with businesses to implement basic frameworks for IoT and related technologies within their jurisdictions. Governments can incentivize companies to protect end-users by requiring baseline standards in their procurement processes.
  • User awareness initiatives: Businesses and governments need to provide digital literacy, training and education initiatives to provide information for users to have a safer and more inclusive digital experience.
  • Security and privacy by design: Governance structures should require IoT companies to embed security, safety and equity into the design of the device rather than a reactive measure to incorporate it as a response to users’ concerns.
  • Governments and technology companies can work with advocacy organizations to ensure that inclusion and accessibility are central to the design of IoT technologies. For example, The EDISON Alliance is an initiative of global leaders from the public and private sectors who have developed protocols for digital inclusion.
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The views expressed in this article are those of the author alone and not the World Economic Forum.

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Institutional update

World Economic Forum

May 21, 2024

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