Dan Chung: The Internet of Things Boosts Worker Safety and Profits
July 31​​, 2019​​​
​The Internet of Things (IoT) is a rapidly expanding collection of technologies that, among other things, has potential to improve the efficiency of warehouses and manufacturing plants while also saving lives and preventing injuries by improving workplace safety. The technology consists of a broad variety of sensors, artificial intelligence and other types of software linked together by the internet or local communication networks. It facilitates the collection and analysis of huge amounts of data to improve business processes including worker safety.

Worldwide, 2.4 million employees die annually from workplace accidents, according to the International Labor Organization, while in the U.S. employers pay $60 billion annually in disability payments, according to Liberty Mutual. Even fatigue is a quantifiable problem, representing $136 billion a year in health-related lost productivity in the U.S., according to the National Safety Council. More specifically, a U.S. company with 1,000 employees can expect to lose more than $1 million each year to worker fatigue.

Firms are therefore developing IoT technology to reduce workplace accidents. The technology includes a variety of wearable devices that monitor worker biometrics, such as vital signs and fatigue, as well as environmental hazards including toxins, flammable gases, excessively loud noise, electrical hazards and temperature extremes. The devices attach to workers’ clothing, safety goggles, helmets, boots and other equipment in the workplace. Business personnel then analyze the data these devices gather, often with the assistance of real-time artificial intelligence to spot trends or other developments that might be warning signs of an accident or a potential risk to an employee. The goal is to prevent accidents. Moreover, unsafe practices or conditions in the workplace can be discovered and employees can receive additional safety training.

In addition to the social value of improving safety with IoT technologies, companies benefit from reducing the substantial costs associated with disability payments and lost productivity resulting from workplace accidents. For investors, the strong potential of worker safety technology illustrates how innovation is permeating diverse industries and creating attractive growth opportunities for companies that supply semiconductors, software and other technology associated with IoT and other types of safety devices.

The science for improving wearable safety technology is rapidly growing. In one example, researchers equipped 25 participants with motion sensing devices worn on wrists, hips and ankles. By analyzing individuals’ body movements, the researchers were able to spot changes in workers’ behavior that signaled fatigue. The issue of fatigue is already being addressed elsewhere, with Nokia’s manufacturing plant in Chennai, India, providing its employees with the “Smart Cap” that measures electric activity in the brain and sends alerts to workers’ smartphones when it detects fatigue.

Honeywell International, which provides wearable safety technology, maintains that digitally connected workers can slash safety incidents by 20% while boosting worker productivity by 30%. The company estimates that connected worker safety technology is a $26 billion market. Employers appear to be ready to adopt the technology. In a survey of safety professionals last year​, slightly more than half of respondents said they were in favor of using wearables and another 27% said they have at least some interest in using the technology.

Other companies are developing additional types of non-wearable safety devices including technology that can help prevent accidents involving heavy equipment and workers. These devices include cameras that allow operators of tractors, front loaders and excavators to view blind spots and radar that can detect workers when visibility is poor due to darkness or dusty conditions such as in mines.

At Alger, we are always excited about the ways digital technology is transforming our lives and business operations while creating attractive investment opportunities among companies that are leading their industries by embracing innovation. As I hope I have illustrated here by focusing on just one application of IoT–workplace safety–the technology has the opportunity to be pervasive in virtually every industry and to create growth opportunities in many areas including—but not limited to—the foundational technologies in software, semiconductors, robotics/automation and other technologies that drive and support the ongoing digital revolution. ​​​

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Liberty Mutual, Nokia and Honeywell represented 0.00%, 0.00% and 1.64% of Alger assets under management as of April 30, 2019.​

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