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IoT applications

The Nobel Prize laureate in economics Ronald Coase in his highly influential essay "The Nature of the Firm" (1937) tries to figure out on what conditions should we expect firms to emerge, because in fact "production could be carried on without any organization (that is, firms) at all". He considered the conditions under which it makes sense for an entrepreneur to seek hired help instead of contracting out for some particular task. To answer on this question he introduces the concept of transaction costs.

Imagine vehicle purchase: try to buy a car for parts, and calculate how much money and time you will spend just to assemble all the components in your garage.

Nowadays the idea of reducing transaction costs has become firmly established. Production, logistics and retail actors over the past 50 years have already done a lot to automate their work. However, with the rise of robotics and machine learning this task becomes relevant again. The question is, is lights-out manufacturing truly realistic?

There are already some examples of machine-led manufacturing. Using robotics allows them to operate unsupervised for up to 30 days at a time, hire a small number of staff to oversee quality assurance, to reduce downtime. But also there may be some limitations. One such limitation is setting up the interaction of many related elements (control systems + robotics + IoT + clouds + API to human).

In 1948 a professor of mathematics at the MIT Norbert Wiener published one of the most seminal works "Cybernetics: Or Control and Communication in the Animal and the Machine". He used the term "cybernetics" as self-regulating mechanisms for the first time and, so, this publication is considered a recognized Cybernetic birthday.

Norbert Wiener speaks about viability of interdisciplinary science approach. For example he drew the parallels between automated control systems and challenges of scaling and complexity increasing of human society.

So, in other words, the cybernetic approach can be applied equally to psychotherapy, biology and automated navigation. It is based on the function of the system, how the individual actions are controlled and how the individual nodes interact with each other.

Taking into account Ronald Coase's and Norbert Wiener's publications, following up the development of Industry 4.0, we can consider using CPS as an economic agent, while designing robotized services. To regulate the size of the CPS and adapt to the changing needs of the individuals we can use market mechanism.

And what’s so scientifically interesting, taking as a basis the idea of the restrictions imposed by the market on the size of the firm, we can say that the limit of the increase in CPS will always be determined by the market and nothing else is required for this.

Robofirms are an ideal representation for cyber-physical systems. They are a fairly autonomous unit capable of providing services to both humans and other robots for money. As a result, the robot economy appears to us to be a general set of CPSs that provide services and goods directly to the market.

In conclusion, we would like to mention questions that remain open from a global point of view. What is the goal of robots?

In fact, the economy of people is often associated with the conscientiousness of performing tasks within the framework of the contract, the desire of the parties to achieve a result, the opportunistic and altruistic behavior of the individual in society. All of these principles are hard to apply to the robot economy. What are the motives of the robot economy? It's an open question that we need to research and discuss in society for better understanding and applying robots.

For the start we suggest to look at Mises's work "Human Action: A Treatise on Economics" (praxeological approach) and at early article by Norbert Wiener "Behavior, Purpose and Teleology" (teleological vision).

Praxeology inspires us with interesting ideas about human behavior without direct dependence on the purposes. This gives us the opportunity to work on the processes of the economy of robots conditionally as with a black box without delving into the ultimate goals. At the same time, teleology poses a challenge to explain causes.

We hope that somewhere at the junction of the works of Mises and Wiener, a point for further development of the robot economy may be found, not just as a protocol of interaction between people and machines of a praxeological nature, but taking into account the teleological elements of building interspecies communication.