Internet Of Things Needs Government Support

The US risks being left behind as other countries invest in ubiquitous computing. Here's a seven-point framework to bolster the US's support of IoT technologies.

Scott Amyx, Founder & CEO, Amyx+McKinsey

October 9, 2014

4 Min Read

standards, there is already a significant body of work established; it needs to be expanded to account for wearables and M2M technologies. Until the government steps in to set clear guidelines and the corresponding enforcement, supported by industry consortiums, the general public will distrust wearables and IoT.

3. Technologies: Establish R&D funds
The government can reinforce R&D investments to cultivate IoT growth, to concentrate on developing core technologies, and to create new markets. In addition, the government needs to maximize the investment effects by developing methods to strengthen the system that evaluates the relative value of R&D results and to establish management responsibility systems.

4. Talent: Support educational development
The Internet of Things will accelerate the knowledge economy. Its economic promise will warrant government education funding to boost IoT talent. This will help address the need for specialized knowledge workers in areas such as embedded systems, wireless networks, cognitive science, big data, robotics, wearables, and security.

Funds will support education, research, and collaborative public-private sector initiatives to nurture and attract top students and academics and to connect them with leading IoT firms and startups.

5. Demand creation: Incorporate IoT into LEED and construction permits and standards
Revisions to the building code and Leadership in Energy and Environmental Design (LEED) standards to require the use of M2M sensor technologies in construction and renovation can single-handedly secure the national demand part of the equation. Those standards can affect energy, transportation, communications, mining, oil and gas, and government civil engineering projects to create a massive demand economy. We are already seeing some movement in this direction, but much more is needed at the national policy level, which can then be implemented by the states.

The California Energy Commission recently updated its Title 24 Energy Efficiency Standards to require photosensors, occupancy sensors, and multi-level lighting controls, both indoors and out, making adaptive lighting the new standard in California. The California Energy Commission projects the non-residential standards alone will save the state 372 GWh every year.

The California Public Utilities Commission's Long Term Energy Efficiency Strategic Plan has also called for a 60% to 80% statewide reduction in electrical lighting consumption by 2020. This is on top of the goal to make all new residential construction net-zero by 2020, and commercial construction net-zero by 2030. Since lighting currently accounts for nearly 30% of California's electricity use, the extensive use of lighting controls is absolutely essential to meeting these net-zero goals.

This doesn't begin to account for efficiencies and savings of water and gas nor the monitoring of physical assets, such as bridges, highways, and skyscrapers for post-natural disasters, such as an earthquake, to evaluate structural impact and damage assessment through IoT sensors and systems.

Additionally, LEED standards, created by the US Green Building Council, can be updated to incorporate IoT technologies into new constructions and major renovations to further its green building goals.

6. Demand creation: Spur public-sector projects
As part of its fiscal policy toolbox, the US government should conduct cost-benefit analyses of pursuing public-sector IoT projects, so long as the political winds allow it.

Public-sector IoT projects work elsewhere in the world. South Korea implemented smart city initiatives to develop new residential cities near Seoul's outskirts. Under the comprehensive plan to build ubiquitous cities, the Ministry of Land, Infrastructure, and Transportation is striving to complete 73 city projects.

Similarly, the Chinese central government has selected 202 cities to pilot smart city projects to collect and analyze transportation, electricity, public safety and environmental data.

7. Financing: Loans, tax privileges, and subsidies
The US government can also consider special funds to optimize financing for the Internet of Things, such as infrastructure funds, loans, tax privileges, and other subsidies, while weighing programmatically the economic and social benefits against the investment costs. The key is to ensure that the parameters of government financial support are constrained by the oversight of an independent audit committee to evaluate the merits and management of programs. These tools can be dangerous, fraught with perverse incentives and unintended policy consequences, so they should be used with caution.

The Internet of Things faces significant obstacles that impede mass adoption. The US government can exercise leadership by partnering with the private sector to create a structured government policy to systematically nurture the next major growth engine for the American economy.

The Internet of Things demands reliable connectivity, but standards remain up in the air. Here's how to kick your IoT strategy into high gear. Get the new IoT Goes Mobile issue of InformationWeek Tech Digest today. (Free registration required.)

About the Author(s)

Scott Amyx

Founder & CEO, Amyx+McKinsey

Scott Amyx is the founder and CEO of Amyx+McKinsey, a wearables strategy agency specializing in smart wearables strategy and development. He writes for InformationWeek,, IEEE Consumer Electronics Magazine, and
IEEE Technology and Society Magazine, and he speaks at global conferences on wearables and the Internet of Things.

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