Few people in the world are as acute as Joi Ito when it comes to spotting macro IT or business trends. And one trend that the newly appointed director of the legendary MIT Media Lab has seen coming for a long time is the Internet of Things, where almost every object imaginable ― from computers to cars, from phones to fridges, from medical equipment to items of clothing ― will become connected to one vast digital network.

This, Ito believes, will create massive potential for innovation and unprecedented value-creation; yet, to his visionary mind, it has been entirely foreseeable since the birth of the Net four decades ago. In his typically low-key manner, he describes it simply as “the marching forward of the Internet on a very predictable and long-term path.”

As unconventional as it is varied, Ito’s résumé places him among the world’s entrepreneurial and intellectual elite. Born in the US to Japanese parents, but educated at an American school in Japan, he dropped out of university (twice) and spent time as a club DJ in Chicago and Tokyo in the early 1990s. Then he caught the Internet bug and was involved in the launch of Japan’s first commercial ISP, quickly followed by Japanese Internet start-up Digital Garage.

A decade later, he became an early investor in a broad portfolio of Silicon Valley start-ups, most notably Twitter, Flickr and Technorati, and spent three years on the board of Internet regulator ICANN. Since that time, he has barely stopped traveling: these days he circumnavigates the planet once every month or so, his main stopping-off points being the US, Dubai and Japan.

This outstanding track record, combined with a truly global viewpoint and an impressive network of contacts, led to Ito’s appointment ― despite his never having graduated ― as head of MIT Media Lab, one of the world’s most highly regarded and innovative academic institutions.

Since it was opened as an offshoot of the Massachusetts Institute of Technology in 1985, the research-focused school has been responsible for innovations as diverse as messaging protocols in the early days of the Internet, electronic ink (used in e-readers such as Amazon’s Kindle), and a prototype folding electric car for city use.

Things that think

In his new role, the Internet of Things sits high on Ito’s agenda. The Media Lab’s “Things that Think” consortium is its largest, and includes backers such as ICT vendor Fujitsu, Bank of America and consumer packaged goods group P&G. It is, in the organization’s own words, “inventing the future of digitally augmented objects and environments.”

For Ito, this is the next, logical step for the Net. “The Internet was really a philosophy of trying to make open standards so that things would interoperate, and the Internet of Things is just an extension of that. Everything was already starting to talk to each other, and now it’s all starting to come together into one network. We’re taking the communications protocols, standardizing them and making them accessible so we can now do things like ‘big data’ and better communications.”

This will lead to widespread transformation for business and society, he says: “Quantitative differences end up with qualitative change and so the IoT will fundamentally change the way we do things.”

The biggest opportunity for businesses, he believes, lies around the vast amounts of data that will be produced and the value this can create for everything from supply chains to new product development. But the key is to be able to handle that data ― and the increased complexity it brings ― in a way that leads to value-adding innovation.

He likens the challenge to the advent of widespread Internet adoption by the public in the 1990s. “From a company’s perspective, if you didn’t understand the Internet, you weren’t going to be very competitive,” says Ito.

“Similarly, if you don’t understand big data, you’re no longer going to be competitive. Understanding how to work in a relatively chaotic, open system with tremendous amounts of data is now essential. And it’s not just the data guys. Everybody needs to understand their role in this ecosystem.”

Not least, the CIO, he argues. “The challenges of being a CIO in this environment are much bigger,” he says. “The role used to be a lot of MIS [management information systems] stuff, and buying the packages offered by the likes of SAP or Salesforce. But now it’s a completely different world where CIOs need to have a lot more internal capability.”

Managing complexity

Learning to manage such growing complexity in large corporations will be key to survival, Ito stresses ― otherwise they will find themselves under threat from smaller, nimbler competitors. A big part of this, for all leaders, will be to decentralize decision-making to create more agile, faster-moving business units that function more like start-ups.

“Central planning doesn’t work in complex systems,” he argues. “The world has become so complex and so fast that sitting around thinking about whether to do something often costs more than actually doing it.”

He throws out an example from his own experience of what he refers to as “Lean” start-ups. “You can build a minimum viable product [Silicon Valley-speak for one that is not necessarily perfect, but good enough for customer testing] for just about any Internet consumer service for $30,000. And the average executive retreat probably costs $1 million. So the trick is to empower people to innovate at the edges ― and then figure out what are the successes and failures. Planning is overrated.”

Ito believes technology leaders have a do-or-die role to play here, and hands out a stark warning: “Any CIO of any company should be figuring this out. Because the other part of the story is that Internet companies like the Googles and the Facebooks are coming to a sector near you real soon. You can no longer assume your competitors are the people who are already in your space.”

Responding to the Fukushima nuclear disaster

When the devastating March 11 earthquake hit Japan, Joi Ito was in Cambridge, Massachusetts, attending a two-day interview for the role of director of the MIT Media Lab. Once it became apparent that the disaster had caused the Fukushima nuclear reactor to go into meltdown, he was concerned for his wife and friends in Japan and frustrated by the lack of public information about the levels of leaking radiation.

Desperate to find out more about the true picture on the ground, Ito reached out to several experts within his broad global network of friends and contacts. Within a day, he had put together a virtual team of dozens of people.

Immediately they started collating and analyzing what data they could collect about contamination levels, making it publicly available. “After about a week, we had a tremendous network of more than 150 volunteers,” explains Ito. “Within a month we had just about every kind of expert you would need in order to figure out what was going on.”

The next step for RDTN, as the network named itself (it’s now called Safecast), was to design an open-source blueprint for self-assembly Geiger counters ― including one that could be mounted on an iPhone ― to be used by volunteers on the ground in Japan.

“We created a mobile sensor network, so we could drive around, collect data and then aggregate it,” says Ito. “And we made sure the equipment didn’t end up in the hands of people who weren’t going to share the data ― because that was the important thing for us: that we shared the data.” This allowed the network to compile an online map of which areas were worst affected.

The RDTN volunteers soon started working in towns and villages in the disaster zone to help spot where radioactive dust was collecting 
in individual houses and then decontaminate them.

“These guys were welcomed with open arms,” says Ito. “And now they’ve started their own movement in Fukushima. They’ve said to us: ‘You’ve come from all over the world to help us learn about radiation and decontaminate. We now know how to do this, and now if this happens anywhere else in the world, we’re going to go and help, just like you’ve helped here.’”

Ito points out that this inspiring tale would not have been possible in pre-Internet days. “I had no specialized knowledge. But just by having that idea and having the Internet, by the time we were a month in we probably knew more about radiation and contamination than just about anyone who was speaking publicly. We were getting bashed by critics who were saying, ‘You don’t know this, you don’t know that.’ But every time we got bashed, we’d go out and find somebody who knew about it through our network.”

The rise of open hardware

As well as being an important demonstration of how to leverage the power of online social networks, and Ito’s brilliance at playing the role of enabler in such an environment (he is, for example, a skillful leader in the “massively multiplayer” online game, World of Warcraft), this story also highlights one of his latest interests: open hardware.

This, he believes, is poised to become every bit as influential a trend as open software.

By way of explanation, he draws another parallel with the experience of the Lean start-up: “If you look at the explosion of consumer Internet companies in Silicon Valley, it comes from the open Internet lowering the costs of distribution and communication, free and open source software lowering the cost of software development, and Moore’s law driving down the price of computing power. Developing a minimum viable product became so cheap that you could do it without real investment.

“In turn, that generated the ability to try everything and then invest in those things that add growth, rather than spend $10 million just to see if it works. That’s now happening in hardware.”

The drivers for this, he explains, are more transparent supply chains, more accessible manufacturing techniques and easier physical prototyping, thanks to the growing availability, and reduced cost, of technologies such as 3-D printing and laser-cutting. The result can be anything from the RDTN/Safecast Geiger counter to fast-moving commercial goods, or from automobiles to entire buildings.

Innovating at the Media Lab

Given this deep understanding of agile innovation, and the future direction it is likely to take, it’s little wonder that Ito impressed in his job interview at the Media Lab ― an organization that works in a similar way.

And he revels in this modus operandi. “At the Media Lab, we’re all about learning through construction rather than learning through instruction,” he enthuses. “We don’t sit around arguing about things or planning things. We discuss an idea ― and we build it. It’s very similar to the idea of the Lean start-up and agile development, but we’re not limited to software.”

This “build culture” helps the institution’s diverse range of corporate sponsors ― which contribute around 85% of its funding ― to quickly see how a seemingly left-field idea might be applied in the world of business.

“The translation from an academic idea to a layman’s version is quite difficult,” says Ito. “But if you can demonstrate it, it makes that translation so much easier. The ability to express something in a working prototype is therefore very important, so the rest of the world can understand it, and so we can quickly get feedback.”

Ito also believes it’s important for the Media Lab not to set out to solve specific problems, but instead to allow itself to be an “ideas factory” and let businesses themselves work out the “real-world” applications of what the academics invent. “A lot of companies get their value by seeing an idea at the Media Lab and then going back home and doing something differently,” he says.

Summing up this role played by the organization, he continues: “More and more of the real value in business comes through disruption rather than incremental innovation. And what we’re good at is showing things in a completely different ― and disruptive ― way. Our job is to give companies the context in which to turn our ideas into innovation.”

In short, rather like Ito himself.

Photography: Dan Burn-Forti