According to IDC, Asia Pacific is set to become the frontline for the Internet of Things (IoT). With a large number of government initiatives driving demand, the number of things connected is expected to increase from 3.1 billion to 8.6 billion by 2020, creating a US$583 billion market opportunity. eGov Innovation speaks with Dr. Rishi Bhatnagar, Global Head of Digital Enterprise Services at Tech Mahindra, on the opportunities that IoT will bring to Asia, overcoming the barriers to IoT adoption and what governments can do to support its growth.
What is the current state of IoT adoption in Asia and how does the region compare to the rest of the world?
IoT is proving to be a promising technology and we are seeing growing traction towards its adoption. According to market research, Asia-Pacific will be the frontline for IoT with 8.6 billion things connected, creating a US$583 billion marketing opportunity by 2020 (IDC). There is an increased investment in sensors by companies and developers in this region with an estimated number of 26% likely to be working on IoT projects, which is ahead of North America at 23%, South America at 22% and the EMEA region at 17% (Evans Data Corporation). Convergence of technologies including Analytics, Cloud, Mobility, Big Data along with falling sensor prices and exponential social media adoption are instrumental in driving IoT adoption in the region. Even governments are showing an interest in IoT and the Government of India has declared its 100 Smart Cities vision which is a $45-50 billion opportunity in India over the next 5 years.
What benefits and opportunities can IoT bring to Asia?
One advantage that IoT can bring to Asia is increased productivity for businesses. As IoT gains traction in Asia, the number of businesses’ touch points with their customers have also grown significantly. According to IDC, 1.3 billion of the world’s total workforce are expected to be on mobile by the end of 2015, with 80% of this number coming from Asia Pacific. Given this massive growth in mobile adoption, businesses have access to a new source of customer data gathered from mobile applications that they can draw customer insights from. By using the right analytics tools on this new set of data, businesses can improve their efficiency and be more flexible in responding to customers and capturing opportunities in the market. This can help businesses become more agile in responding to market changes and help bring the customers experience to greater heights.
The introduction of IoT technologies in the healthcare sector has significantly impacted healthcare solutions and improved the efficiency of operations within healthcare organisations. This provides the market with a stronger standing to fight issues such as infectious diseases in the region. According to Frost & Sullivan, the Asia-Pacific region will see a US$160 billion opportunity in the areas of digitisation, decentralisation and democratisation of data in the healthcare sector by 2016. The evolving healthcare IT landscape will give Asia an opportunity for improved healthcare services and bring about cost savings through innovative procurement models and increased efficiency.
Other sectors in Asia that can potentially stand to benefit from IoT are manufacturing and logistics. Based on research by McKinsey, IoT in manufacturing has the potential to generate savings of up to $3.7 trillion per year by 2025. With the region moving from agriculture to manufacturing, IoT investment in the manufacturing sector can offer various opportunities for businesses. Technologies such as embedding sensors and Bluetooth to cargo can enable intelligent tracking in freight management that provides manufacturers with information such as environmental conditions, location and temperature on their freight. Another example of smart technology in manufacturing includes using sensors to monitor the conditions of machines in industrial plants so that companies can be alerted when maintenance is due. Such technology can save companies the cost of unnecessary maintenance and preventing unplanned breakdowns in production due to faulty machine parts.
Apart from businesses, consumers in Asia can also stand to gain from IoT via increased connectivity. In the Southeast Asian region alone, Internet users are reported to be amongst the most active in the world. According to We Are Social, users in The Philippines, Thailand, Vietnam, Indonesia and Malaysia spend an average of over 5 hours a day online. Improvements to connectivity brought about by IoT technologies such as the rollout of 2G, 3G and 4G networks and high speed broadband networks can give consumers the opportunities to gain new information and insights.
What are some of the use cases of IoT that can potentially be brought into Asia?
IoT adoption in the B2B & B2C segment is increasing with growing demand in verticals such as manufacturing, healthcare, retail and smart cities from road traffic management to building energy, parking, security and surveillance. Some of the noticeable use cases are:
- Energy and utilities organizations to reduce power theft and line losses with Smart Energy Management
- Automotive industry for connected cars and analyzing driving patterns
- Agriculture sector for water and waste water management, water quality and assets monitoring
- Healthcare sector for telemedicine, assisted care and remote coverage
- Manufacturing industry to track and monitor high cost assets
- Municipal councils for home automation and pre-paid metering
What are some of the barriers to IoT adoption in Asia and how can they be overcome?
Though IoT tops the Hype cycle of Gartner’s emerging technologies, it is still in its nascent stage of evolution. Thus, the economies of scale required to bring IoT in the mainstream is a challenge. Another area of concern is lack of uniform standard. There are too many propriety standards and protocols in the industry today and interoperability is a big challenge. Scaling up security and data privacy is another area of deep concern. There are many points of vulnerability - 70% of IoT devices are vulnerable to cyber-attacks, nearly 1 million new malware threats released every day and today, cyberattacks account for approximately $1 trillion in global losses. Based on FireEye’s report, Asia-Pacific is 35% more likely to be targeted by advanced cyber-attacks as compared to the world. Another problem is that regulations in most of the countries are not keeping up with the pace of technology developments. Though governments have taken a cautions note of same and are introducing amendments, it has to be done on a fast track to make impact at the right time.
Across Asia, market fragmentation can be observed with countries having varying levels of maturity in terms of IT infrastructure and IoT development. While countries such as South Korea and Japan may be leading the region with high adoption of IoT technologies, less mature economies such as the Philippines or Indonesia are still catching up on this trend. Although adoption of IoT may be slower in developing countries, they could be going for a bottom-up approach and using technology as a solution to smaller state-specific issues rather than embarking on larger scale or nationwide projects. One example is the use of IoT to reduce traffic congestion in the city of Makassar in Indonesia, where CCTVs provide a ‘live’ video feed of traffic at highways and roads that tend to get congested.
On the positive side, the ecosystem required for IoT to jumpstart is getting in place such as exponential growth of technology start-ups, willingness of VCs to invest long term, dropping sensor costs, and increasing broadband penetration in emerging economies. The big brands have realised value of IoT for increasing efficiency in business processes and are coming forward for collaboration such as the AT&T, Cisco, Intel, GE, IBM forming Consortium. Neutral organisations such as the Institution of Engineering and Technology (IET) are working with industry experts and organisations to promote interoperability which will further bring down costs of IoT solutions for the benefit of masses.
What can governments do to support the growth of IoT?
As IoT starts to grow and take shape, the right network infrastructure needs to be in place to cope with the massive increase in traffic. A network that is secure, robust and agile is required to handle the high volume and intensity of new devices such as phones, displays and controllers that will all be connected and generating great amounts of data. Local governments are expected to start investing more in IoT initiatives and will make up more than 25% of external government spending according to IDC. Governments can do their part by investing in network infrastructures that are scalable and more flexible, which can ultimately help in managing this new demand.
The backbone supporting the growth of the industry, especially in developing economies, would be a good education infrastructure. Governments can help bridge the digital divide by building an environment that encourages innovation within the technology sector. This may include initiatives such as funding hackathons or competitions that could give birth to new ideas and collaboration opportunities. In order to boost IoT talent, government education funding is needed to fill the skills gap and address the need for knowledge workers. For instance, funding can be provided to help drive collaborative initiatives between public and private sectors which can nurture and connect academics and top students with leading IoT firms.
Cybersecurity would be a key issue when it comes to IoT development. To mitigate risks in the cyber space, governments can help lay out standards for privacy and data protection and ensure these measures are enforced. Governments can also step in to drive collaboration between public and private sectors to enforce security with new technologies such as wearables and M2M technologies. The involvement of local governments can help instill confidence in consumers to adopt these newer technologies.
What advice would you give to a cash-strapped government in Asia? What aspects of IT should they focus on first?
A successful smart city does not necessary need to be equipped with the newest and extravagant technology, but one that operates on initiatives that are sustainable in the long term. A cash-strapped government should look at developing the right models for long-term success of ‘smart’ initiatives. Therefore, technology investments have to make monetary sense to the city as well as its partners so as to be able to be deployed on a larger scale in future.
As governments develop smart city initiatives, a good guideline would be to address the most urgent needs of the city, first and foremost. For instance, for countries facing challenges in utilities management, integrating information technology with ‘smart utilities’ such as water, electricity, waste removal and traffic management can be integral to the country’s development. IoT can be a means to an end for governments tackling core issues such as electricity, healthcare, education, transport and water. A key to utilising IoT technologies is to ensure that it is guided by good governance and that the smart city strategies are modelled closely after the country’s development priorities, goals and policies.
Original article taken from: http://www.enterpriseinnovation.net/article/driving-iot-growth-asia-1907449576