28 July 2015
China and Wider Asia Set to be Ground Zero for Looming IoT Revolution
The Internet of Things is set to rewrite the rulebook for everyday living across a wide variety of areas. According to exhibitors at the Internet of Things (IoT) Asia 2015 Conference and Exhibition, its impact will be felt most keenly in China.
A revolution is coming, at least according to the speakers and exhibitors at Singapore's Internet of Things (IoT) conference and exhibition. This particular revolution is also set to be dominated by the economies of Asia and, most particularly, by China. The IoT will be at forefront of this paradigm shift, which will see everything – from streetlights to buildings to wearable devices – exchange information over the web. Ultimately – according to the experts – this will cut waste, improve efficiency and even save lives.
Overall, healthcare is seen as the key growth area, something driven by the changing demographic across Asia. As the continent's middle classes expand in number, family sizes are shrinking while, at the same time, the elderly require a higher level of care over a longer term. Inevitably, this is fuelling the market for health-monitoring wearable devices. Another spur to growth is coming from the rise of smarter buildings and cities, while the demand for connected manufacturing is also beginning to take off, as pressure mounts to reduce energy consumption and cut pollution.
There are some obstacles, however. Mindsets need to change and old systems need to be discarded in order to fully unlock the potential of this new highly 'disruptive' technology. At the same time, information privacy and the danger of hacking remain a concern for many.
Speaking at the event, Charles Reed Anderson, Associate Vice-president, Head of Mobility and IoT, for IDC Asia-Pacific, a Singapore-based market intelligence company, revealed the latest projections for the growth of the sector. He said: "The number of things connected in this region will increase from 3.1 billion at present, to 8.6 billion by 2020. The value of the Asia-Pacific market, excluding Japan, will increase from US$250 billion, to US$583 billion.
"The IoT market has matured considerably of late, with large government projects across the region. This is particularly the case with China, which is committed to building 200 smart cities. By 2020, China is expected to dominate both regionally and globally. Within Asia, China will comprise 59% of the market while, globally, one in five connected items will be in China. Within the region, the next most significant markets are South Korea, India and Indonesia.
"The top six uses of IoT will be smart grids, manufacturing, asset management, smart buildings, emergency services and digital signage. The top five verticals employing IoT will be governments, utilities, manufacturing, healthcare and retail. This can vary considerably from country to country within the region. China's top three, for example, will be manufacturing, government and healthcare. I'm particularly excited about the prospects in the healthcare sector, with Asia set to add a billion middle class people by 2020.
"In terms of concerns likely to inhibit IoT growth, the big three issues here are capital expenditure and operating costs, as well as security and privacy issues."
Such concerns, however, are likely to be offset by a number of clear benefits. Dr Kerstin Geiger is the Senior Vice President for Industry Value Engineering for SAP Asia Pacific Japan, a Singapore-based software provider. Highlighting the likely financial and environmental benefits, he said: "IoT will help make us more insightful and enable us to run our world better. Just by incorporating IoT into street lamps, we can cut their CO2 emissions by 50-70%. In agriculture, crop yields could increase by 67%, and prices could be cut in half. In manufacturing across the globe, we could see as much as US$500 million in savings. In retail, shrinkage could be cut by up to 50%."
Tobin Alexander, Japan and Greater China Vice-president for Discrete Industries at SAP Asia Pacific, sees the opportunities for businesses coming in three main areas. He said: "IoT can drive improvements or innovation in a product, optimize the value chain or enable the implementation of new business models. Harley Davidson, for instance, lost 40% of its customers after the 2008 Global Financial Crisis. It then set about re-engineering how it made bikes. The results were startling. They cut costs by 7% and increased margins by 17%."
Dr Richard M. Sorley, Executive Director of the Massachusetts-based Industrial Internet Consortium, a non-profit industry association, believes that many enterprises are not ready for IoT. He said: "Traditional enterprises often lack Internet thinking, even in this day and age.
"I was talking to several electrical engineers who work for the main US power companies. They were thinking of installing thermometers on various nodes on the power grid in order to track, in real time, how the grid was doing, with a view to improving efficiency, predicting failures and so on. They felt, however, that the data demands were going to be too massive. I calculated just how much data would need to be sent. It was just 2Mb. A day. And this was in 2012.
"IoT is about preparing for disruption. It is about looking for opportunities, rather than just thinking about what worked before."
Another key theme at IoT Asia 2015 was wearables. This was specifically with regard to fitness and exercise monitors, such as FitBit or Muse, the brain-sensing headband. Assessing this particular sector, IDC's Anderson said: "We will see a switch from basic, single function wearables, to smart, app-based wearables. In 2014, the region had 5.3 million wearables, of which a mere half a million were smart wearables. By 2019, there will be 42.5 million wearables, of which 24.5 million will be smart, accounting for one third of the global market."
Dr Julia Ge Yu, a Research Fellow with the Neural & Biomedical Technology Department at the Institute for InfoComm Research in Singapore, believes that, while wearables today are focused on lifestyle and fitness, they are moving towards medical grade use. She said: "Wearables have the potential for greatly cutting costs, while providing more rapid and targetted healthcare. I see three main categories for their use:
"Firstly, in general health, for example, in chronic disease management, age-related health and physical rehabilitation. Secondly, in professional sports, in order to enhance performance and reduce injury and fatigue – 70% of French national athletes, for instance, now use wearables. Thirdly, for use in the military, for example to reduce heatstroke and improve the speed and specifity of injury or wound treatment.
"Today, there are hundreds of thousands of health apps, but only about 100 have FDA approval. One challenge I see is that the rules on privacy and data sharing are far from clear."
Kenji Tan, Director of Strategic Business Development, Medical & Healthcare Solutions, Greater China & South Asia Region for ST Microelectronics, believes that the potential of healthcare IoT and healthcare wearables to be particularly huge in China. He said: "In China today, someone from a village may take as long as two days to travel to the nearest clinic. He may then have to wait another day to see a doctor and then only get a five-minute appointment. In light of China's increasingly aging population and its shrinking support base, the pressure will be on to provide better distributed healthcare."
Mili John Tharakan, Assistant Vice-president of Innovation for Welspun Global Brands, an Indian textiles group, sees wearables as set to quickly progress to the next stage. She said: "Wearable technology is set to deliver electronic components that will be thinner, stretchable, flexible and washable. These new properties will enable us to re-imagine the form and function of electronics, to go beyond gadgets and into fashion and smart home textiles. Textiles – and the pun is very much intended – will be woven into the fabric of our everyday lives, not just in the clothes we wear, but also in our homes and architecture. I call this the Internet of Textiles."
Aside from wearables, the other key area for IoT, of course, is smart building. Sudhi Rajan Sinha, Vice-president for Product Development at Johnson Controls, a Texas-based provider of intelligent operating systems, sees energy saving as the priority here. He said: "According to the International Energy Agency, one third of the world's energy is used in buildings. In developed countries, this goes up to half.
"Clearly, as energy resources dwindle, better managed buildings will make a huge impact. The amount of technology that now goes into a building is well beyond the remit of architects and electrical and mechanical engineers. Buildings are now like living things, with a life cycle that needs to be optimised at every stage. IoT systems can help customise the otherwise central and uniform air conditioning and lighting, according to actual usage within the building, note where energy leaks are occurring, and predict maintenance needs."
It's not just individual buildings that could benefit, however. According to Michael Holt, Chief Executive of ConnectedHealth and gridComm, two Singapore-based connectivity companies, IoT has city-wide potential. He said: "Some 40% of a city's electricity budget goes into just lighting the streets. Smart monitoring reduces costs, reduces manpower and maintenance, as well as predicting failure. The lights are a pre-built network for a city and sensors can be included to track traffic, weather, pollution, population movements, and so on, all in real time."
There are, however, a number of even more fundamental implications emerging from the rise of IoT, including changes in the way we work, consume and live. Rob van Kranenburg, Founder of the Internet of Things Council, a Netherlands-based think-tank, sees a number of challenges emerging in the years ahead. He said: "By 2020, as much as 25-30% of work will become obsolete. In white-collar roles, this will be down to semantic interoperability while, for blue, it will be more related to robotics.
"The nature of work itself needs to be redefined. Data – how it is collected, collated and used – is the new gold. Innovation will be even more critical and the trust of citizens will need to be earned everyday by governments. Growth will no longer be the sole indicator of economic activity. Instead, we will transition to a steady-state economy, one focused on stable populations, stable consumption, and sustainability."
Internet of Things (IoT) Asia 2015 Conference & Exhibition was held at the Max Atria at Singapore Expo Convention and Exhibition Centre, Singapore, from the 8-9 of April. Over 50 exhibitors across a variety of fields, including OEM and ODM, sensors, connectivity modules and mobile network operation, as well as a full programme of speakers shared their views with an estimated 2,000 visitors.
Ronald Hee, Special Correspondent, Singapore