Most people welcome smart automation of 'mindless' tasks, such as lights that work based on sensing human presence in the room and dishwashers that automatically turn on during cheaper tariff periods and when fully loaded.

But most people wish to remain in control of their lives and have the final say in making choices.

Few want a pizza automatically ordered this weekend just because they happen to be at the same location and having broadly similar conversations on Facebook and Twitter as when one was ordered for each of the past three weekends.

The concept of a smart home is one which makes us us smarter and more empowered, rather than just making things smarter. Most people have two major concerns regarding smart homes. The first is that they fear connected devices will enable firms to collect by stealth even more data about themselves and their behaviours, thus infringing on their 'right' to data privacy.

The privacy fear

There are clear worries about digital visibility and exposing our personal data – the fear of firms knowing too much about us and using, sometimes abusing, that knowledge for commercial gains.

There is also the unwelcome and already much loathed situation where we are constantly bombarded with an ever increasing barrage of offers and recommendations of products or services that we neither need nor want.

The second is that they fear the loss of autonomy and homogenisation of choice and behaviour. Having smart appliances do everything for us – from automatically switching to our favourite television channel at a given hour and determining the right mix of detergent and conditioner in our washing machine, to suggesting what we should wear today based on information from our diary and the weather forecast.

The smarter, more empowered 'we' will be made possible by the Hub of All Things (HAT), which is both a personal data warehouse and a multi-sided market platform[1]. Smart sensors embedded in multiple home devices and appliances, as well as placed in appropriate and strategic places within the home, collect personal data that represents our 'quantified selves'.

The data collected is different from secondary data generated by companies, such as supermarkets (through our loyalty cards), e-tailers (through our online buying and browsing behaviour), programme streaming providers (through our watching behaviour) and internet giants (through our search and browsing patterns). This is siloed, vertical data on a relatively small part of our lives, but to which we are not usually accorded access in return.

Power over our data

The HAT, on the contrary, creates a repository of data about us, generated by us and, most importantly, owned by us, so that we can apply our own data onto new services and offerings.

Because the personal data collected is in essence highly contextual, and because we own it and control how it should be used, it becomes valuable for trading with companies in exchange for highly customised and personalised products and services that better meet our needs.

For example, contextualised data that integrates how much (e.g. five tubs a week) and which brand of yoghurt we consume (Alpro), when and where we consume (usually during Eastenders and in the living room), what we do at the time of consumption (usually while also watching television), how frequently we replenish the stock in our refrigerator (once a week) and what other food products we usually consume (dairy-free and organic products) can be mashed with demographic/household data.

But they are all on our fingertips; we decide if we would like to share it with the likes of Tesco, Sainsbury, Alpro, Müller, Netflix, Amazon, Google, Aviva, Barclays, or even our own GP.

Striking the balance

The HAT therefore augments digitally sophisticated smart homes by empowering the individual to participate in the 'personal data economy', make better everyday decisions, and generate smarter monetary and time savings.

As the HAT is obviously a very appealing concept to individuals and households, its adoption is widely anticipated to dramatically escalate once launched, thereby creating huge network effects. Birmingham City Council is already embarking on a 18-month £485,000 project to trial the HAT with volunteer households and individuals[2].

Smart homes are creating opportunities for both business and individuals. Connected and intelligent devices make our lives easier, more productive and more delightful; data owned by individuals preserves privacy, put us in greater control of our lives and enables us to make better and more autonomous decisions; a market for exchange of data and commercial offerings can emerge, leading to innovative business models and new markets; and we are all incentivised to generate more data with confidence.

  • Working on the Towards a Smarter Society report in partnership with Samsung UK, Charles Levy is a Senior Economist at The Work Foundation and David Wong a Researcher at the Big Innovation Centre. Follow the links for Part 1 and Part 3, Part 4, Part 5, Part 6 and Part 7 of the report.

References: [1] The Hub of All Things is a project led by Professor Irene Ng of the University of Warwick. See http://hubofallthings.com/. [2] See "HARRIET's high tech HAT to help make Birmingham a Smart City"