It’s not just our computers and smartphones that talk to the Internet: as the Internet of Things (IoT) spreads, our cars and power grids are becoming connected. There are even cows hooked up to the Internet by sensors which can alert farmers if they get sick or lost. Currently, the IoT is based on machine-to-machine communications between technologically advanced and relatively expensive things, such as smartphones, heart monitors and home appliances. Those objects use sensors to collect data which they then transmit to the Internet for storage, sharing or analysis.

The next generation of the IoT will digitize smaller, cheaper things that are generally high volume and low cost but important nonetheless. Whether they are pharmaceuticals, electronic components, industrial parts or food, these are things that travel through global commerce in quantities of billions but to which it would be too expensive or impractical to add a sensor.

Instead, these items will be given a data tag similar to a barcode or a QR code – the square grids often used on physical objects like packages and magazine ads that act as a bridge to the digital world when scanned with a smartphone. However, it isn’t practical to add a traditional printed barcode to things like gears, pills and circuit boards, so advanced materials, such as plant DNA or nano-scale symbols, will be used as markers, allowing for almost invisible tagging.

The unique identification codes will enable these items to be tracked as they flow through daily transactions, scanned along the way by sophisticated cameras, perhaps in smartphones that are powerful enough to detect minute differences in markings on manufactured or organic things.

This barcoding is actually a return to one-way information tracking; the items will not sense or receive data on their journey, unlike a smart car. But by digitizing billions of transactions, these advanced materials and detectors will add massive amounts of data to the IoT. The power of “big data” analysis can then be used to trace, for example, the path of an individual piece of food from farm to fork, pills from factory to bedside, or computer chips from foundry to medical device in a doctor’s office.

Imagine being able to authenticate the provenance of a glass of wine, not just the bottle, from the vintner to the table via the molecular fingerprint of the batch, blend and vineyard. Or, imagine a nurse scanning the barcode on their ID badge and a patient’s ID bracelet, and then scanning a cupful of pills before handing them to the patient. In a few seconds, that process would confirm that each pill was authentic, appropriately prescribed, of the correct dosage, did not adversely interact with any of the patient’s other medications and would remove them from the hospital inventory.

Yes, tracking and analysing these ubiquitous, high-volume items will raise new privacy questions and concerns, as did the first generation of IoT and every major technological advance before it. But society has historically found the right balance when harnessing new technologies, despite a few hiccups along the way.

More information is always better because it allows us to learn, analyse, educate and improve. We must meet the innovation imperative and continue to invent new technologies and materials in order to reap the benefits of the Internet of Things.

Read the Technology Pioneers 2014 report.

Author: Peter M. O. Wong is the Chief Operating Officer of TruTag Technologies, a World Economic Forum Tech Pioneer company.

Image: A pharmacy employee deposits pills into a pill counting machine REUTERS/Lucas Jackson.