When people discuss “smart” technology, they are often referring to devices that make their lives easier, such as the now ubiquitous smart phone. Within a few years, the smart phone had rapidly evolved. People now had a limitless technology in their hands that made their lives easier in many ways, from finding their way around a new city, to finding a new place to eat near their home. Since the swift onset of the smartphone, technology companies, and their millions of customers, have been searching for another brilliant new device. Could the next such paradigm shifting technology be something so bizarre as smart fridges? Or, more specifically, could the next transcendent innovation be a network by which various household appliances can communicate with one another? Perhaps the idea is not as far-fetched or trivial as it seems.

Often, the “next big thing” is a buzz phrase commonly used to advertise or pitch an attempt to prove the imminent usefulness of a newly discovered technology or device. However, the Internet of Things is the “next big thing” in more than just the idiomatic form of the expression; it is quite literally a limitless network that has already begun to permeate the everyday lives of people around the country.

So what exactly is this Internet of Things? According to Daniel Burrus, the CEO of Burrus Research, the Internet of Things describes a network of machine to machine communications that enables immense opportunities for efficiency and optimization by collecting data and adapting appropriately. However, in order to maximize the effectiveness of a network of smart machines, all machines need to adapt the technology at the same rate, leading to the rapid development of technology. This doesn’t mean that appliance companies are suddenly a wonderful investment opportunity. Rather, companies that develop the sensor and cloud technology used in smart technologies will become an intriguing future investment opportunity as all machines quickly adapt this new technology to avoid falling behind.

Decades ago, Joseph Schumpeter coined the idea of “creative destruction” as an essential facet of capitalism—the process by which the onset of new technology rapidly displaces old technology, and companies that are unable to keep up with the technological advances fail. According to Schumpeter, creative destruction was a double-edged sword. It was vital in providing entrepreneurs the ability to pierce previously impenetrable barriers of entry. However, the erosion of the market power of previously monopolistic companies could serve to destabilize a capitalist economy; hence the term creative destruction. Nowhere is this phenomena better evidenced than by the speed with which smartphones displaced other kinds of non-smart cell phones, and the resulting realignment of market power among cell phone companies and carriers.

So how about potential investment opportunities in this paradigm-shifting new technology? One prime example of smart technologies that learn and adapt to user experiences is Nest Labs’ premier product, the Nest Learning Thermostat, which adapts to user settings so that homeowners can drastically reduce the amount of time that they spend fiddling with the thermostat to find their ambient temperature for any particular time of day or season.

According to Daniel Kurt of Investopedia, Fitbit is another popular “learning technology” product, perhaps best known for the highly popular wearable health and fitness tracking devices. However, Fitbit has already seen major companies begin to slice into its market share, with technology titans such as Microsoft and Apple developing devices and software well equipped to streamline data about user health and fitness, and even craft healthy diet and workout plans for them based on their preferences and behaviors.

Given the volatility of the market for smart learning technology and devices that “talk” to one another, perhaps a worthwhile investment to make for the future may be in traditional technology companies with all-encompassing product lines, such as General Electric (GE) and Samsung Electronics. GE recently invested in a new 1 billion dollar enterprise called Current, through which they aim to target a rapid implementation of the Internet of Things. The hope at GE is that Current will integrate with homes seamlessly and manage both energy costs and energy conservation simultaneously, through smart analytics. Expectations are high—GE expects Current to reach five billion dollars in revenue by 2020, and the platform already has 500 million dollars of financing available for customers, according to Stacey Higginbotham of Fortune.

Companies such as GE and Samsung are spread broadly and are present in more realms than hardware and software stalwarts such as Apple and Microsoft. As a result, they are more likely to invest in technology to develop networks between their series of device lines in order to simultaneously enhance customer experiences and encourage them to purchase a large number of devices from a single company rather than look for the best or cheapest devices from a variety of companies. For example, why buy a fridge from GE and a thermostat from another appliance company when your fridge and your thermostat can communicate with one another to ensure your perishables are kept at the right temperature based on the temperature of the surrounding house?

Lastly, one way to take advantage of the coming investing of things bubble, which, with the potential to be the most expansive network since the internet, figures to have a large impact on consumers, would be to avoid investing in traditional hardware development companies, such as Qualcomm and IBM. Both of these companies are still world renowned for chip manufacturing. However, companies that invest in the software infrastructure necessary to maintain the Internet of Things will be far more viable options than the hardware developers themselves. As customers grow accustomed to smart devices which require less frequent setting changes, hardware companies that are as of yet unable to provide network services for their appliances will be forced to obtain the service from contractors with the necessary technology, even at a high cost, or face losing sales.

According to industry expert John Greenough, the Internet of Things figures to rapidly become the world’s most massive device market and should not be underestimated. According to the Business Insider Intelligence Report, the Internet of Things will become the largest device market in the world by 2019. Additionally, this market will add over 1.7 trillion dollars in value to the global economy in 2019. Device shipments will also reach 6.7 billion dollars by 2019, with over 90 percent of the revenues flowing to the companies who have invested in the software and infrastructure necessary to maintain such a massive network.

There are a few who maintain qualms about the Internet of Things, citing a lack of security and privacy. However, the multitude of uses of the Internet of Things should mitigate most concerns. Similar to how sensitive data is not stored in the cloud, networks where security is of tantamount importance will continue to “hardwire” their operation. However, many services with a myriad of user interactions would benefit from streamlining those user interactions, especially where secure user information is not accessible to begin with.

Ultimately, investing in the Internet of things is an early proposition, although it is certainly worthwhile. Smart communicating machines are already beginning to shape consumer lives. When extrapolated to a larger scale, such as the development of smart cities that eliminate the hassle of transportation malfunctions, the Internet of Things could set off a ripple effect that drastically changes the ways cities utilize technology to make citizens happy.

iPhone 5 or Samsung Galaxy S3 is now the choice that many consumers are facing these days.

On one hand you have the iPhone: a sleek, refined product of American innovation, a phone touted by enthusiastic techies and laymen as simply the most revolutionary phone product to hit the market. On the other you have Galaxy S3, which generated enough excitement in its early stages of development for many to dub it the ‘iPhone killer’. It is an amalgamation of cherry-picked features, slight alterations, and excellent execution.

After a high-profile patent case, Samsung was forced to pay over $1 billion in damages for infringing upon a number of Apple designs and patents. Nonetheless, Samsung’s business model of essentially “playing catch-up” to Apple and improving on Apple’s designs ended up paying off. In Q3 2012, the Samsung Galaxy S3 beat out the iPhone 4S (an older model) to become the world’s best-selling smartphone.

At their core, the business strategies of Apple and Samsung Electronics represent fundamental differences in thinking and attitude. The anti-corporate culture of Apple, as embodied by the image of a barefoot Steve Jobs, versus the massive, South Korean conglomerate (chaebol) Samsung Electronics.

While much could be said about how individuals have shaped their separate corporate philosophies, and in turn their trajectories, perhaps we can take a look at the intellectual and academic environments in which these two corporations formed. Perhaps Samsung’s ability to copy rather than innovate is reflective of South Korea’s education system, which many say is top-notch but doesn’t nurture creative thinkers.

A recent study done by an education research firm, Pearson, places South Korea among the most well-educated countries in the world. Considering how well South Korean students have traditionally fared on standardized reading and math tests, the results of this recent study are certainly no surprise. In contrast, the U.S. is a middle-of-the-road country when it comes to education, despite its status as the leading economic power in the world.

Educational spending could be one cause of this achievement gap. According to the Center on International Education Benchmarking, South Korea spends 7.6% of its GDP on education, the second highest among OECD countries.  Intense schooling starts from the age of 6, culminating in the College Scholastic Aptitude Test, a high-stakes college admissions test that often determines one’s future financial, social, and personal success. The average Korean student attends regular schooling in addition to “cram schools,” private after-school academies that specialize in skills ranging from English and math to playing an instrument. Nearly 9% of children are forced to attend such places past 11pm.

For all the success that the South Korean system has produced, it has many flaws. Consequences of such a high pressure educational system manifest themselves in all sorts of manners including the abnormally high prevalence of youth suicides and poor social skills.

Furthermore, in such a system it is difficult to cultivate innovative and creative thinkers. Instead of valuing individualism and unconventional thinking, children are taught at a very young age that memorization and brute repetition will lead to good grades, admissions into prestigious universities, and a successful life.

Former South Korean minister of education, Byong-man Ahn, notes, “Students have no time to ponder the fundamental question of ‘What do I need to learn, and why?’ They simply need to prepare for the test by learning the most-effective methods for digesting tremendous quantities of material and committing more to memory than others do.”

The South Korean government is currently in the process of implementing reforms that it hopes will help foster creativity. Such reforms include reducing material students need to study and refining the ways teachers engage their classes. Interestingly enough, the government itself may be the cause of the educational system’s problems. The Ministry of Education develops a national curriculum that is then disseminated to nearly all of South Korea’s primary schools. The fact that educational reform is implemented from the top-down may discourage experimentation with more effective forms of learning, such as a switch to more hands-on activities and a greater degree of freedom for students to pursue their own academic interests.

Furthermore, while there is reason to be optimistic, such reforms may not be enough. In order to truly foster a nation of innovators and outside-the-box thinkers, South Korea may need an entire cultural shift. The social stigma against those unable to gain entrance into a prestigious university may be forcing creative thinkers to focus all their time on brute memorization, which in turn could push them into despair.

It may be years before South Korea can champion its own Silicon Valley. It would take nothing short of a complete revamp of education and a cultural shift that promotes individuality and iconoclastic thinking to produce an environment conducive to producing the Steve Jobs of tomorrow. But for now we all may have to make do with products like the Samsung Galaxy S3; effective but not groundbreaking.

Imagine developing and patenting the technology that allows a user to return a “sleeping” iPhone back to functionality. Apple did just this with its “slide-to-unlock” feature, a defining characteristic of the iPhone that users have come to love. Specifically, Apple was granted a patent by the U.S. Patent and Trademark Office for the diagrams that it had submitted, showing a white rectangle with curved edges that, when dragged to the right by the touch of a finger, unlocks the device and directs the user to the home screen. Over the years, more and more smart phones have appeared with very similar features. After all, all devices need some way to unlock, and there are only so many ways to achieve this. The unlock feature, however, is an example of what has caused a great deal of controversy and led to the emergence of a recent phenomenon regarded by many as the “Patent Wars.”

Certain Samsung phones allow a user to touch the center of a circle on the screen, and then unlock the device by dragging a finger to any point outside of the circle according to the user’s particular access code. In February, Apple filed suit against Samsung with claims that Samsung violated a series of its patents, including the slide-to-unlock feature. Apple and Samsung are currently engaged in a 20-lawsuit, 10-nation battle over this disagreement. Additionally, Apple has asserted claims against Motorola for alleged patent violations of similar nature. However, something unexpected happened earlier this year – a Swedish company called Neonode Inc. declared that it had already been granted a patent for a version of the slide-to-unlock feature. Apple had unknowingly been beaten to its own idea, and arguably should neverhave been granted its patent to begin with. Stories such as this have become a familiar trend as innovators continue to develop new technology each and every day. Can a fine line between patents, particularly in the smartphone industry, ever be effectively established?

The answer to this question is extremely unclear, and whatever solution that may exist will likely be difficult to find. Thousands and thousands of characteristics of smartphones such as the unlock feature of the iPhone exist as patents. In fact, Google’s chief legal officer, David Drummond, has expressed that up to 250,000 different patents may apply to a single modern smart phone. After all, companies have claimed the rights to the most minuscule of features, and often the distinction between these features is highly ambiguous.

Professor Scott Stern, who teaches at the Sloan School of Management at the Massachusetts Institute of Technology, is a patent expert who is well aware of the uncertainty involving patents of today’s technology industry.

“The trouble is that in this industry so often a patent is not a clearly defined property right, but a lottery ticket of uncertain value,” said Stern, who is convinced that this patent ambiguity unintentionally creates risk and cost. If patents no longer provide a guaranteed incentive to innovators, the enormous benefits of technology patents appear to be diminishing.

However, news of massive patent buyouts executed by some of the world’s largest technology companies has covered recent headlines. In 2011, Apple, Microsoft, and four other companies completed a $4.5 billion joint buyout of Nortel Networks, a bankrupt Canadian telecommunications maker. Google purchased Motorola Mobility for $12.5 billion last August, and Microsoft bought $1 billion worth of AOL patents in April of this year. The aforementioned buyouts value individual patents of each deal at $750,000, $400,000, and $1.3 million, respectively. These numbers are staggering. What use value do large numbers of patents bring to the arsenals of the world’s top technology companies, especially if patents are becoming increasingly difficult to distinguish from one another? What is causing this recent trend of massive patent acquisitions?

Historically, the main idea behind patents is to provide ongoing incentives for individual innovation. However, the original inventors of these ideas are largely forgotten in today’s world. Recently, the main premise behind the massive acquisitions of patents, particularly in the rapidly expanding field of smart phones and tabloids, has become increasingly geared towards security. Ownership of patents grants companies both a stronger legal and negotiating position when faced with the growing ambiguity of the world of technology patents. Loaded with large stockpiles of patents as a defense mechanism, companies have the increased capability to secure their products and defend against potential litigation. The potential for future innovation is also strengthened. The extremely high cost of eliminating these risks is thought to greatly outweigh potential future risks themselves.

It is difficult to say what the future may hold for technology patents. Interesting responses are already beginning to emerge. Just this April, Twitter announced that it will allow its engineering inventors to veto lawsuits against alleged infringers of patents that they develop. Under the agreement, Twitter cannot sue another company or person without the consent of the engineer to whom the patent was rewarded. This action may provide an effective model for companies to avoid expensive legal messes, such as those currently fought by companies such as Apple.

One thing is certain – too many technology patents remain vague and excessively broad. Michael Carrier, a professor at Rutgers School of Law, is correct when he states, “When you have companies spending hundreds of millions in litigation, something is seriously wrong with our patent system.” Patenting of technology products will continue to face struggles unless lawmakers scrutinize the recent troubling trends and develop an appropriate response.