Some systems to manage water and power are getting smarter
Brendon Riley, chief executive of IBM UK, talks about the big changes that are about to hit the world all around us.
While the world continues to get smaller and more interconnected, something is now happening that holds even greater potential.
Our planet is becoming smarter.
It is now possible to infuse intelligence into the way the world works.
Many are wondering how a challenging global economy will impact life in the UK and beyond. We should look at this time as offering a unique opportunity to change the way the world works.
The financial turmoil has reminded us that we are all now connected - economically, technologically and socially. However, we're realising that just being connected is not sufficient.
In the last few years, global climate change, environmental and geopolitical issues surrounding energy, and the major pressures caused by the scarcity of our natural resources, have taken centre stage.
Critically, the digital and physical infrastructures of the world are converging. Computational power is being put into things we wouldn't recognise as computers. It's easy to embed sensors in all sorts of ecosystems, from hospitals to supply chains to natural systems like rivers. Almost anything can have a digital presence in a networked world.
All of this instrumentation generates new data, which advanced analytics can turn into insight - so better decisions can be made in real time.
This in turn leads to increased effectiveness - simply doing what works, faster.
Within our reach we have a platform for reform and a way to become more competitive.
Problems such as spending too much time in traffic, managing financial risk or finite resources such as water can now be approached in fundamentally different and game changing ways.
We have the intelligence, we have the instrumentation - so much of the computing and technical power is there. Those companies, countries even, that put this intelligence to practical use will be those that seize competitive advantage and emerge from the current turmoil as leaders.
This requires that we look at the world in a different way.
If you have a systems perspective of how the world works you can see a great many inefficiencies and in some cases malfunctions.
The whole issue of energy efficiency provides a very compelling and very visible manifestation of the need for the world's infrastructure to become more intelligent. The International Energy Agency suggests over half of the carbon savings needed to meet carbon dioxide stabilisation goals will come from end-user efficiencies.
On the Mediterranean island of Malta, power and water are intricately linked. The nation's electricity is generated entirely by imported fuel oil, while the country depends on electrically powered desalination plants for 55% of its water supply.
Riley: A smarter world means a better quality of life
In fact, 75% of the cost of water from these plants on Malta is directly related to energy production. Meanwhile, rising sea levels threaten Malta's underground freshwater source.
This presents a complex, interconnected series of challenges that require immediate attention to ensure that the country has sustainable resources for the future.
The Maltese national power and water utilities - Enemalta and Water Service Corporation - are making their country the first in the world to build a nationwide smart grid and fully integrated electricity and water system.
This system will be able to identify water leaks and electricity losses in the grid, allowing the utilities to more intelligently plan their investments in the network and reduce inefficiency.
In addition, 250,000 interactive meters will monitor electricity usage in real time, set variable rates and reward customers who consume less energy and water.
Thousands of intelligent sensors will be deployed along transmission lines, substations and other existing infrastructure to manage electricity distribution more efficiently and to anticipate problems.
All of this data can then be collected and analysed to help lower costs, reduce consumption and cut greenhouse gas emissions.
By addressing the issues of water and power as a system, the Maltese government can provide citizens with better information to make smarter decisions about how and when they use power - and the country can begin the task of replacing carbon-intensive fuel oil with renewable energy for the future.
Smarter systems in the world look like the net
In fact, the intelligent utility system looks a lot more like the internet than like a traditional grid.
This increased intelligence is also incredibly empowering for consumers. A smart grid allows them to become more involved with managing their energy use.
There are so many exciting and game-changing opportunities if you think about the world from a system perspective.
Not only does it herald the ability to improve the quality of life. It is inexorably linked to improving competitive advantage - a view expressed in the UK government's Digital Britain report released in January.
In the last two decades, we have seen our planet become smaller and "flatter". In the next two, we will see it become smarter.
We just need to open our minds and let ourselves think about what the opportunities could be. It's about changing how the world literally works.