Security firm says organisations must ensure that they can protect and verify the identity of every device.
The rise in connected devices will give hackers greater access to "life-endangering" threats than today’s viruses and malware, according to the latest research.
Security firm Intercede said while the Internet of Things (IoT) has the potential to enhance standard of living, it also introduces risks including threats and frauds that were previously immune before.
IoT refers to appliances enabled with sensors and assigned their own IP address that connect to the internet – thus creating a world where devices and machines can communicate with each other, interpret information and make intelligent decisions.
Allen Storey, product director at Intercede, said: "What I want five years from now is to be sitting in my self-driving car, watching my home baby-monitor on my smart watch, when my fridge tells me I have run out of milk and automatically directs me to the supermarket.
"But I want to be absolutely sure that it is my fridge, my car, my monitor and my watch talking to me. Embedded secure elements combined with device and person identity management can make this a reality; without it our fridges may be full of spam in a way we had not predicted."
The research comes not too long after a smart refrigerator was identified as a source of malicious emails.
The fridge was one of more than 100,000 devices such as smart TV sets, computers and multimedia centres that hackers broke into, according to a California-based security group Proofpoint.
Dr Chris Yapp, an independent consultant specialising in Innovation, Scenario Planning and Public Policy, worries about data privacy with intrusive technology from IoT.
"The difficulty is these sensors, they’re so cheap that once they’re out there, it will be almost impossible to retrofit them," he says.
"So if we put them out with very low levels of security and there’s billions out there, nobody is going to go around and upgrade them. So the thing is we need to understand if all the data about your health is actually visible to you, what protection will you want in order to be able to say I will share it with my doctor but no one else."
Intercede said that the best defence against hackers is to ensure each device has embedded security and an authentication process that verifies the identity of every device.
"A secure element embedded within it which can’t be copied or tampered with, and which can hold cryptographic keys that are unique to that one device," said Storey.
He added: "What is key to securing a world of connected devices is a big push to educate people, corporations and other organisations…the biggest change will come in the way that we need to think about security.
"This education should not be based on fear, uncertainty and doubt; instead we need a calm and collaborative approach to securing one of the biggest technological leaps forward in our lifetime."