The socio-economic dimensions of Ambient Intelligence
Eurescom project PROFIT
The radical changes in the Information Society driven by progress in Information and Communication Technologies (ICTs) and their adoption has opened a fast path towards a vision of Ambient Intelligence (AmI). This article describes work undertaken to examine the socio-economic dimensions of AmI and to develop a scenario and potential migration paths for its future users and providers.
It is generally acknowledged that a user-centred, social approach is vital to the successful development of this vision, and never has it been so pertinent to explore people's life worlds and how AmI devices can be usefully and positively incorporated into them. AmI also offers tremendous business opportunities and challenges to telecommunications operators and service providers. It is vital to understand these opportunities. The approach used by PROFIT has been twofold:
The AmI vision itself has some key underlying assumptions, which challenge the way some of us currently lead our lives. Always on, pervasive and particularly mobile devices blur the boundaries of work and home, especially for those who wish to maintain a separation. This fieldwork element of the Eurescom project PROFIT therefore examined people’s work/home boundary issues. The IST Advisory Group (ISTAG) and others have developed scenarios of AmI applications. However, those existing scenarios did not question user acceptance. So, as part of the fieldwork interview process, participants were also asked about their feelings towards key AmI elements, as identified from existing scenarios.
Certain people wish to keep work and home quite separate, based on identified drivers that matter greatly to them – such as not wanting distraction, or to maintain their quality of life. The fieldwork examined not only employees but also the self-employed. Non profit-maximising ‘lifestyle businesses’ were particularly found to want to maintain strict boundaries, since their businesses were formed to maintain their quality of life (see figure 1). AmI devices will therefore need to stop incoming messages or data from work at home or home at work. A form of ‘off switch’ is necessary, which is more sophisticated than powering down.
User perceptions of key elements of the AmI scenarios were surprisingly uniform across the fieldwork countries Norway, Finland, Hungary, and the UK. These include concerns about non-independence, loss of control, security, privacy, and systems failures. Respondents feared that the results given by intelligent devices would not be independent – biased towards the sale of particular items. Respondents were also concerned about control issues. They felt they would lose control over how their personal information was used. AmI devices were seen as too controlling through their didactic qualities – telling their owners what to do – but AmI devices, which relieved mundane tasks, were viewed extremely positively.
Future profitability of services
The PROFIT project has analysed the components of profitability, i.e. both the market attractiveness and the competitive advantage in terms of business models and demand, for 2010. Drawing on indications from each of these areas, a prediction has been made in terms of future profitability for telecommunication companies by a combination of qualitative and quantitative techniques. A ranking has been produced of the most profitable services and an estimate of revenue attributable to European telecommunication operators and service providers.
Ranking of most profitable services
These predictions have been used as inputs for a realistic basis for a new “grounded scenario” more indicative of life in 2010 (illustrated in figure 2).
This scenario has also been supported by the user perceptions emerging from the fieldwork and the trends indicated by the PESTE (political, economic, social, technical, environmental) analyses.
In addition, an analytical view has been taken from both the strategic and micro levels in terms of developing business models. The profitability of many new and older economy companies has been examined and alternative ways of viewing the nature of competition in 2010 and beyond has been demonstrated, building on the MIT delta model (see figure 3).
This approach has opened up the importance of not only considering profitability based on traditional “best-product” economics, but also (i) customer economics and (ii) system economics. In considering (i) and (ii) the concept of lock-in becomes important in terms of product-customer, and product-customer complementor (i.e. a company that provides customers with complementary products and services). The simple value chain based on the “best-product” paradigm is augmented to become a value net with the addition of actors providing co-operation as well as competition. Active regulation can serve as a barrier to competition based on system lock-in, and this will be possibly one of the most difficult issues that telecommunication companies will face in the “new economy”.
The project’s “grounded scenario” was developed to show where possible AmI-related barriers are and where AmI offers opportunities in the future, to both users and businesses.
For users, concerns about non-independence, loss of control, security, privacy and systems failures will need to be addressed if AmI is to experience widespread adoption. Unmet needs, such as automating the mundane and helping people to be more in control of their lives, offer context-aware service opportunities. AmI technologies will offer greater flexibility both in where and how people work.
For businesses, there are three main areas of change: the development of new organisational forms and strategic approaches; the adoption of management structures and systems that favour flexibility and adaptiveness; the merging of home, work and public spaces. However, regulatory limits on the nature of competition will serve to limit the profitability of telecommunication companies.
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