How IOT is Growing and Why We Need to Adapt to Its Changes
People First is the Hyde Park Angels podcast dedicated to deconstructing entrepreneurial success into actionable takeaways you can use today. Hyde Park Angels is the most active early-stage investor in Chicago with a commitment to taking a “people-first approach” to investing. By matching our members’ expertise with entrepreneurs’ needs, we help develop top-performing companies that are delivering extraordinary results. This episode features HPA member Hardik Bhatt.
Hardik Bhatt, Chief Digital Officer and State CIO for Illinois, joins HPA on our latest People First podcast to discuss the major trends in IOT since its inception and how this will radically affect our lives in the coming years. Key takeaways include:
- Which industries will be disrupted the most
- How cities and companies are going to change the way they use data
- How we can prepare to adapt to the changing pace of new technology
Pete: Good day! It’s Pete Wilkins, the managing director of Hyde Park Angels and I’m here with Hardik Bhatt; Hardik how are you doing this morning?
Hardik: Doing very well Pete I’m happy to be here with you.
P: For all of our listeners today, give them your current title and role, and then we’ll get into your background.
H: So I currently am the Chief Digital Officer and Acting Secretary for the Department of Innovation and Technology for the State of Illinois.
P: Perfect, before we get into our discussion today, I think it would be fantastic to give our listeners a little view into your incredible background. If you could give them your story from a few decades ago and bring that to today that would be perfect.
H: Well Pete, what I’ve done is that I’ve seamlessly moved between the public sector and the private sector. I’m predominantly a private sector person, but I’ve really loved spending time in the public sector. I’m currently with the State of Illinois. I’m leading a major digital transformation for our government and for our state. We have been able to bring our great state of Illinois in national digital rankings from the bottom fourth up to the top third in the past two years. Beyond that as the Chief Digital Officer I’m also looking at the future and seeing the new disruptive technologies that are already here like the artificial intelligence, robotics, block chain, self-driving vehicles, machine learning; what is the impact of all of this technology on the future of our economy and the future of work? How do you as a state enable our industry for a faster adoption of automation but at the same time make sure that you’re not creating mass unemployment? Beyond that just running the day-to-day technology operations for the state. So, I’ve got a billion dollar technology organization with 1,500 people that I steer and we build the latest and greatest technology that the state provides and improves the employee efficiency here.
P: You got a lot on your plate for sure. You’re in a unique position to be at the helm of the state with this massive transformation in automation going on based on your background. I’m sure your prior experience is extremely applicable.
H: Definitely Pete. When I got the call from the governor and I started working for the state, within the first month I realized that what I was doing at Cisco, what I was doing at Oracle, what I was doing in the city of Chicago, all of that was directly applicable to what kinds of transformations that we want to do at the state. Previously, before I got this phone call from the governor, I was with Cisco building new business around smart cities. They started in 2008 and I joined them in 2010.
For the early part of my Cisco career I led the business development for the Americas so I spent a lot of time in Brazil preparing it to host the 2014 FIFA World Cup. So we would work with developers and service providers to prepare these stadiums and the surrounding towns for being a good host for the soccer world cup and all of the technology that it brought with it. The irony here is that as the CIO of the city of Chicago I was on the committee that pitched to the International Olympic Committee about Chicago hosting the 2016 Olympic Games. The idea here though was that we would use technology for environmentally and socially sustainable development in these cities, working with real estate developers.
Around late 2012, then CEO and chairman John Chambers started focusing on building this new industry called at the time “internet of everything”, but it’s basically IOT. Because I was sitting right at the crux at technology in public sector in major cities I was asked to lead the global market development for IOT for public sector. And again I worked in 40 global cities in those 5 years with Cisco in 19 different countries. The idea is that technology is not there for the technologies sake, technology is there to solve a business problem. Each city had its own set of challenges that we used technology to solve. The idea was economic development and solving problems in government efficiency and improving customer service and that’s exactly what we are doing now here in the state of Illinois. So at Cisco we also created a dedicated a $150M fund for IOT investment opportunities in 2013, and that ultimately led me to Hyde Park Angels which I joined in 2014.
P: Well, we were lucky to have you join for sure, and I think that as the listeners process this, the one thing that you weren’t able to capture in your background description is that you really led Chicago to be among the top 3 smart cities in the country. Am I correct?
H: Yes, that’s correct. I pioneered the smart Chicago program which became the national model for the rest of the cities in the U.S.
P: So Hardik you really are kind of the grandfather of all of this IOT technology in these cities; what are your favorite problems to solve with technology?
H: You know technology has as tremendous power if it is applied in the right manner. My favorite, because I’ve spent a lot of time in the public sector, is healthcare, urban tech, education, and transportation are the four areas where I see a tremendous possibility of efficiency gains through a use of IOT. If you asked me to choose my favorite problem to solve, it would be solving generational problems in these sectors.
P: If you look at problems that you are solving, what do you think is the most important to solve first?
H: There are many of those Pete– it’s very hard to pick just one. Prioritization happens with multiple different factors. If you think about healthcare that’s where our country spends probably the most money after defense, but outcomes really aren’t that great. That’s happening because we are collecting a lot of data, we have great medical breakthroughs that we have seen on the equipment side and medicine side, and we haven’t really been able to use all of that data and build analytics on top of it to start solving longer term problems.
P: From a CIO perspective from the state of Illinois, what have you seen either Illinois or other states do in the IOT arena that has been transformational?
H: For the federal government, the biggest one has been in defense, but for civilian use the biggest one has been transportation. Various state transportation departments have seen significant use of technology in our roadways. This is because traffic remains one of the top five issues that every governor or mayor grapples with. Another thing is vehicular safety that remains on the top of everybody’s list. Then, with automated and self-driving vehicles coming, you need to have robust communication happening between the road and the vehicle so you can direct it in the right direction. So a prime example of that in Illinois is the I-90 is outfitted with a ton of sensors that all can communicate to self-driving cars in each individual lane to tell them how fast they need to be going and the like. The data is also collected by the state government to analyse and even push out to the federal government.
P: Wow, we’re seeing a lot of progress. Are we seeing that in all of the other states as well? What are some statistics to give us a sense of how far we’ve come and how far we need to go?
H: Michigan is the leading state there, but California is not far behind. When it comes to states, technology is generally not the issue; it’s the regulations that are the issues. Those states that are forward thinking in fixing the regulatory environment for the upcoming technology always end up taking leadership positions. One of the very fast growing technologies is blockchain, and on the surface doesn’t look like it’s connected to IOT but it’s going to absolutely change how IOT works and how security and trust is going to work within IOT. Illinois is establishing ourselves as a leader in blockchain; for example, we are the number two state in terms of activity that is happening in blockchain, second to Delaware.
P: It’s great to hear that our state is out in front in a number of those initiatives. So you definitely have had the experience to look at what has happened historically in this area. What do you think the top one to three trends that are going to happen in the next five years that are going to transform the way we view the world?
H: The key trend is use of data. This is really going to change as we integrate IOT and can make real-time use of all of our data. There is a company called Hologram which is making it easier to connect your sensors, there’s Xaptum which is not only connecting your sensors but also providing you a very secure pipe for your enterprise. IOT security is going at the chip level, so the issues that you’re seeing around hacking your devices are going to go down significantly because developers are building this technology. On the other hand what you’ll start seeing is the use of artificial intelligence and can be put in things like drones or even put back in the original sensors and start making some real-time decisions on its own without human intervention.
So you’ll see a positive circular loop of efficiency creation through real-time data collection, analytics, and AI, and that’s going to be used in other specific industries to gain efficiency. The rate at which technology makes significant changes to our society is much faster than it used to be, and we’re not used to changing that fast as a race. The key thing is, yes technology is going to change the world around us, the question is, are we going to adapt ourselves to start changing to that pace?
Newer learning models will also have to adapt as time goes on. The whole K-12 model that we all know and have been through is also going to be impacted significantly. We’ll still have K-12 and College but we’ll have to have a lot more continuous learning, and so I think we’ll see a lot more platforms that support that coming up.
P: These insights have been fantastic, and one thing I’ll touch on as we sum up is it sounds like the Internet of Things is here, the future is that all of the critical industries as we know them from healthcare to transportation to manufacturing will all transform, the feedback loop from the data is going to evolve with AI driving it. Based on our conversation, it sounds like we got about 20 years worth of knowledge in 20 minutes.
H: One thing I would add is that most of the researchers project anywhere from 16% – 32% CAGR growth in the IOT market, so it is a very robust market to invest in right now because it’s still growing. I’d say IOT’s time is now.