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Economy of Things – a technology and business evolution

Economy of things

Are platform monopolies an inevitable variation of the tragedy of the commons in today’s digital economy? Or could decentralized systems balance their power, strengthen the cooperative behavior of incumbents to better serve customer needs, and form the basis for an Economy of Things with new cross-industry and cross-domain value networks and business models?

Economy of Things
Game-theoretic analysis of markets without (left) and with (right) network effects showing a tendency for monopoly formation and ensuing market failure in the latter case. For further details see Herd, B., Scharmann, N., & Phelps, S., “Towards the Model-Based Analysis and Design of Decentralised Economies of Things” 2018

An economy with an Internet of Things

Bosch products are increasingly connected to the Internet of Things and we are driving participation in the digital economy. As a company that produces great products, the question of how these “things” play a role in a digital economy is of fundamental interest.

Bosch Research leads the effort to answer this question with the “Economy of Things” project, which is interdisciplinary at its core with active participation from many Bosch units in the mobility, energy, consumer goods, logistics, and IT domains.

Three objectives for the Economy of Things

We are focusing on three objectives to usher in a new digitalized economy.

The first objective is to decentralize and balance the power of today’s platform monopolies. This will in turn strengthen the cooperative behavior of incumbents to better serve customer needs in Bosch domains.

The second objective is to evolve technologies. We can develop smart things fluent in the relevant technology and required organizational abilities, but also industrialize complementary new services that enrich established product-based business models.

The third objective is to innovate. We will contribute to new cross-industry and cross-domain value networks and business models when possible – to enable the Economy of Things.

Distributed ledger technology

Decentralization and the good governance of decentralized systems will be core capabilities to master in building an Economy of Things. One of the technologies that may play a central role is distributed ledger technology (DLT). Blockchain is a well-known example of this technology.

If IoT is 'digitizing the physical world', then the Economy of Things represents the 'liquification of the physical world'.


We are preparing for the technology-readiness of decentralized systems based on DLT, multi-agent technology, as well as game theory and mechanism design.


The contributions of Bosch will build cross-industry and cross-domain value networks that generate new business models in an Economy of Things.

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Research Updates

Keep up to date with the latest ideas and impulses from Bosch for an Economy of Things.

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Nik Scharmann

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