IoT Barriers for Small Businesses: Risks and Implementation

Introduction and Theoretical Framework

The purpose of this study is to develop timely and informed answers to a series of guiding research questions and subquestions in order to identify the risks and barriers associated with Internet of Things (IoT) implementations. These types of studies are important today because the IoT is changing the manner in which companies of all sizes and types operate, and current trends indicate that these implementations are increasing exponentially. The IoT allows conventional computer-based networks to incorporate data collected from everyday objects to provide real-time analyses, and new applications for these technologies are being developed every day. Indeed, there are already more mobile devices in use around the world than there are people, and most authorities agree that IoT deployments will continue to increase well into the foreseeable future.

The review of literature is critical to establishing the current scope of innovation related to the IoT as well as its potential for expansion, especially into use by small and medium-sized enterprises (SMEs). This chapter describes more fully the study's guiding theoretical framework — the Unified Theory of Acceptance and Use of Technology (UTAUT) — followed by an overview of the Internet of Things and an analysis of current trends affecting its proliferation. An examination of the risks associated with IoT implementation is then followed by an analysis of other barriers that prevent IoT adoption by small businesses.

The theoretical/conceptual framework used in this study was originally developed by Venkatesh, Morris, Davis, and Davis (2003) by integrating a number of disparate elements from previous models to create a more accurate approach to understanding how and why technology-related decisions are made by organizations today. The Venkatesh et al. (2003) theoretical model draws on key elements from eight previous theories or models in order to produce a more robust overview of how different motivational factors affect the technology-related decision-making process, and to identify how and why end users actually use different technologies.

The rationale supporting this more comprehensive model included identifying similarities between earlier models that could be applied in novel ways to gain fresh, applicable insights relevant to the uptake of new technologies. This comprehensive model was termed the Unified Theory of Acceptance and Use of Technology (UTAUT), which was regarded as highly relevant for the purposes of this study. The topics selected for the questionnaire described in chapter 3 were based upon the UTAUT and were designed to explicate the respective levels of technology acceptance and willingness to adopt innovations by stakeholders. Moreover, there is a growing body of research that confirms the effectiveness of the UTAUT model for guiding future technology acceptance-related analyses (Venkatesh et al., 2003), including acceptance levels for the adoption of the IoT.

The use of the UTAUT model is also highly appropriate for this study because individual acceptance levels of information technology (IT) have been a key focus of many studies concerning new technology implementations to date (Venkatesh, Thong, & Xu, 2016). Furthermore, the UTAUT draws on a growing body of scholarship supporting the notion that, in order to enhance acceptance levels of new technologies, individuals must first have the opportunity to gain hands-on experience with them (Venkatesh et al., 2016). In this regard, Venkatesh et al. (2016) emphasize that "there is also research on technology adoption by groups and organizations that holds the premise that one must first use a technology before one can achieve desired outcomes, such as improvement in employee productivity and task/job performance in organizations" (p. 328).

Four key factors comprise the UTAUT model: (1) performance expectancy, (2) effort expectancy, (3) social influence, and (4) facilitating conditions, as well as four moderators — (1) age, (2) gender, (3) experience, and (4) voluntariness — that can facilitate the analysis of behavioral intention to actually use a new technology, generally in organizational contexts (Venkatesh et al., 2016). An analysis of the accuracy of these four key factors in predicting new technology acceptance levels showed that performance expectancy, effort expectancy, and social influence all accurately predicted behavioral intention to use a technology. Likewise, various facilitating conditions and behavioral intention influenced actual technology usage (Venkatesh et al., 2016).

Other researchers have also used the UTAUT model to examine the effects of the above-stated four moderators on new technology acceptance levels and found that the model explained more than three-quarters (77%) of the variance in respondents' behavioral intention to use a technology, and more than half (52%) of the variance in actual technology usage (Venkatesh et al., 2016). In sum, the UTAUT model provides a useful conceptual framework for developing timely and informed answers to the following guiding research questions and subquestions:

RQ1. Why do SMEs view implementing and using IoT as a risk?

RQ1a. What are the barriers (real or perceived) to implementation of IoT?

RQ2. How are IoT security risks and business risks related?

RQ2a. Under what conditions would SMEs adopt IoT implementation?

RQ3. Why is the IoT applicable and beneficial in an SME context?

RQ3a. What evidence is available to indicate that IoT will benefit SMEs?

Overview of the Internet of Things

The game-changing nature of the Internet is well documented and countless studies have examined the ways in which these technologies have changed how people learn, live, work, recreate, and shop (Bok, 2014). Tens of thousands of new applications are introduced to the marketplace each year, and current signs indicate that these trends will continue well into the foreseeable future (Haghshenas & Richards, 2016). In other words, the Internet is here to stay — at least until the "next big thing" comes along to replace it — and software engineers and IT professionals are hard at work exploiting these technologies even further, including using cloud-based technologies and sensor-equipped devices to collect, aggregate, and analyze a wide range of data in real time.

Although there are different IT platforms currently being used for these computing purposes, one of the main contenders for many businesses at present is the Internet of Things (IoT). According to An and Wang (2018), "After the Internet and mobile communication network, the Internet of Things has become an important trend in the development of information technology, greatly promoting the reform of the information industry in the world" (p. 2386).

The IoT can be applied to virtually anything with the right type of sensor (An & Wang, 2018), and the quality and extensiveness of the data collected is dependent only on the respective processing speeds of the host computer network and the sensors used in a given configuration (Davis, 2017). These attributes mean that the IoT can be applied by small businesses in innovative ways to achieve and sustain a competitive advantage, especially in an increasingly globalized marketplace (Schaffhauser, 2018).

Some of the most important features of IoT applications include the fact that conventional mobile devices — such as smartphones, various types of personal computers, video systems, and other handheld devices — as well as objects that have traditionally not been viewed as amenable to network integration can be incorporated into computer-based networks in meaningful ways. As Kaushik (2019) points out, "In the context of Internet of Things (IoT), the things may be anything like cell phones, iPods, mobile devices, resources, services, education, people, animals, any physical objects etc." (p. 2).

Moreover, the IoT has made it possible to create and even remotely control so-called "smart buildings" as well as a myriad of other everyday objects, using radio frequency identification (RFID) tags and other sophisticated sensor devices. In this regard, Cubo, Nieto, and Pimentel (2014) report that "the Internet of Things is a technology based on the interconnection of everyday life objects with each other, applications and database data" (p. 14071). In fact, the combinations of devices that can be combined in a given IoT network appear to be infinite, and the utility of these technologies is limited only by the imagination of end users (Tucker & Bulim, 2018).

It is also important to point out that the IoT is not an abstract concept existing only on a software engineer's drawing board, but is rather transforming the manner in which companies of all sizes and types manage their information technology resources. As Cubo and colleagues conclude, "This new Internet has led the evolution of the Ubiquitous Web 2.0, integrating physical world entities into virtual world things, as some initiatives are already addressing" (p. 14072). Although precise figures are unavailable, it is reasonable to posit that the number of IoT deployments has increased exponentially in line with the proliferation of mobile devices together with powerful sensing devices that can be fitted to virtually any type of consumer product or artifact (Banham, 2016).

Many of the same attributes that make the IoT a valuable resource for businesses of all sizes, however, are also the attributes that create security risks for its implementation and administration (Banham, 2016). For example, a study by Celik, Fernandes, Tan, and McDaniel (2019) noted that recent innovations in IoT technologies have made it possible to interconnect billions of devices in ways that not only facilitate the aggregation of data but also enhance the ability of organizations to respond to changes in consumer preferences and demand. New applications for IoT technologies continue to be developed on a near-daily basis, and most authorities agree that the IoT represents the "next big thing" in information technology for the foreseeable future (Cassidy & Nandaraj, 2019).

Notwithstanding these significant benefits, Celik and associates (2019) also emphasize that "IoT is now pervasive — new applications are being used in nearly every conceivable environment, which leads to the adoption of device-based interaction and automation. However, IoT has also raised issues about the security and privacy of these digitally augmented spaces" (p. 1). Even the U.S. Department of Defense has taken notice of these trends and has stressed the need for additional security measures for potentially vulnerable IoT networks, most especially those that support the nation's energy grids. According to Cassidy and Galio (2019), "The internet of things is the network of web-enabled objects and devices in society that are able to collect, transmit and exchange data. In recent years, the Defense Department repeatedly has emphasized the need to bolster cybersecurity standards and policies for these systems" (p. 63).

In their haste to jump on the IoT bandwagon, however, some small businesses may fail to take into account the numerous challenges, obstacles, and risks involved in implementing and managing these technologies in real-world settings, most especially in view of recent and current trends in the use of mobile and other devices that comprise an IoT network.

Current Trends in IoT Proliferation

Around mid-2015, the global population of human beings was outpaced by the number of active cellphone subscriptions, based on data from the World Bank and the United Nations' International Telecommunications Union (Murphy, 2019). There were more than eight billion active cellphone subscriptions as of end of year 2018 versus a global population of 7.7 billion (World population clock, 2019). Of these subscriptions, the International Telecommunications Union estimates that approximately 5.3 billion are mobile broadband subscriptions (Murphy, 2019). Although these figures do not mean that every person on earth has at least one active cellphone subscription — many consumers in affluent nations have more than one — they do underscore the enormity of the current trends fueling interest in IoT implementations.

While the proliferation of active cellphone subscriptions has slowed somewhat in recent years, the growth of the active subscription rate continues to outpace the growth of the global population, so these trends will likely remain consistent for the foreseeable future (Murphy, 2019). The number of mobile devices globally was projected to increase to a staggering 16.8 billion by 2023. Given the complexity of many IoT networks and the importance of their contributions to organizational success, it is apparent that small businesses must take the risks involved in implementing these technologies into account from the outset.

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