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While the consumer end of the Internet of Things has been hyped for a decade, the Industrial Internet of Things (IIoT) is likely to materialise much sooner. The IIoT market is also likely to dwarf the consumer IoT market. Industrial companies worldwide are well on their way to developing the IIoT, many with an eye on China. The world’s biggest manufacturing power has ambitious goals, and could be poised to take the lead.
By Boyden

While the consumer end of the Internet of Things has been hyped for a decade, the Industrial Internet of Things (IIoT) is likely to materialise much sooner. The IIoT market is also likely to dwarf the consumer IoT market. Industrial companies worldwide are well on their way to developing the IIoT, many with an eye on China. The world’s biggest manufacturing power has ambitious goals, and could be poised to take the lead.

Industrial giant General Electric is opening a global network of “digital foundries”, incubators focused on developing and commercialising digital machines using its IIoT software, Predix. This summer it opened a centre in Shanghai, and formed a partnership with Chinese telecoms giant Huawei. Germany’s Siemens held an event in Beijing to promote its own IIot technology. American technology firms HP, Honeywell and Cisco are also getting in on the action.

China is indeed fertile ground for building out the IIoT. It has legions of factories with billions of machines. It also makes most of the world’s electronics, including the sensors and other devices that will be used to get factory equipment and industrial goods connected. Chinese manufacturers also have the support of a government eager to upgrade the country’s manufacturing base.

“There are already more things connected to each other in China than in any country”, The Economist reports, “with the numbers set to skyrocket further”. Research firm IDC forecasts that the market for IoT kit in China will rise from $193 billion last year to $361 billion in 2020. Consulting firm Accenture predicts that implementing IoT in manufacturing could add up to $736 billion to China’s GDP by 2030.

With the benefit of local knowledge, Chinese firms are carving out their slice of the pie. The largest mobile-phone company, China Mobile, has established its own version of the digital foundry, called a “cellular IoT open lab”. Chief Executive Li Yue envisions getting as many as five billion devices connected by 2020. Sany, which makes construction equipment, has had connected machines on its factory floor since 2008, and continues to invest in the technology.

There are a few challenges Chinese companies will confront in their race to lead the world in IIoT. First, given the massive data loads involved, they will need to connect to an IoT cloud. In a weak economy, this could prove too costly. Further, existing Chinese factories are less technologically advanced than their American and European counterparts. Transitioning to advanced computer-controlled production and automation will require a bigger leap.

A bigger, overriding issue is that of standards. In June, a new protocol Huawei helped to develop, “narrow band IoT”, was approved as a global standard. Despite this step, there remains a lack of overall global standardisation. Jagdish Rebello of consulting firm IHS contends that China’s massive home market, with a push from regulators, could lead to domestic standards that dominate the global market. Technology and industrial firms in the rest of the world may beg to differ.

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