China might not be where we’re expecting it to be. Indeed an interesting fact can be found in this document. It describes an interesting move made recently by the Chinese government. The title describes perfectly the content: “The Development Program of Internet of Things in the Twelfth Five Year Plan Period”.
When I discovered that I was completely amazed. How a government like the Chinese one include in its policy the development of the Internet of Things? China is more famous for its focus on manufacturing and copycatting than on R&D. Is it a bold and visionary move, a political one, a misunderstanding, or a mix of all the previous?
Before trying to answer to this question let’s take a deeper look on the “The Development Program of Internet of Things in the Twelfth Five Year Plan Period”.
The document starts by acknowledging the importance of the Internet of Things (IoT) in the global economy and particularly in China as well as its strategic role for the development of China. It will give the country a competitive advantage over other economies and place it at a higher rank than it is today. “The Decisions of The State Council of People’s Republic of China on accelerating and fostering the development of strategically important new industries”, has taken effect in 2011 and will last until 2015, when the IoT industry will be mature enough to grow by itself.
The Chinese government recognises the early stage of this technology but also its potential huge growth in a near future thanks to industrial and technical applications. It “shows glorious visions of the future” to use their words.
And this is where everything start to make sense. RFID (Radio Frequency Identification) is a huge industry in China, it is worth 10 billion of Yuan or 1.6 billion U.S. Dollars and they posit that more than 1,600 companies are dedicated to the Research, the development, the production, and the application of sensors. This is a number way higher than most countries in this world (including Germany, France, the UK, and the Europe in general). The total output of sensors is around 2.5 billion units and after bragging about how there communication system is the biggest (censored?), and most technologically advanced in the world, the document tells us that the IoT market in China is closed to 200 billion Yuan or 32 billion U.S. dollars.
They provide us with many applications of the IoT currently in place in China, from medicine to transportation through energy and environmental protection. The range of usage is pretty wide and it’s planned to get wider in the following years. As an example, the Chinese government is supporting the application of the IoT in various sectors such as the protection of the environment by using sensors in factories, or devices to track energy wastes, but also in logistics to enhance efficiency, and in medicine by using more and more IoT in hospitals to monitor patients vital signs in the long run. Another interesting thing is the usage of IoT for food and drug traceability. A question remains: do they really use them? This would need further investigation and way more time than I have for me to answer.
So far it seems that the applications of IoT are mainly low level, we do not see Chinese versions of Nest, or Withings and Ninja Blocks or any other customers-oriented devices. It is clearly a challenge for the government and it wants to find a remedy to this bottleneck by putting its hands in the corporate bowl to foster innovation in this field, and to scale IoT to the mass market.
I am a fierce defendant of the free market and free allocation of resources toward the most efficient investments so I don’t think the focus on the IoT by the Chinese government will revolutionise this growing field but what I do believe is its power to give a great deal of publicity to the Internet of Things movement. It will surely draw attention from all over the world because when a giant like China steps into something, it certainly shakes a big part of it. So to answer the initial question this move is probably a way for the government to jump in a business they think will be pretty huge in the following years. Will they foster innovation? Probably but it won’t be a quantum leap. Revolutionary products are gonna come from private companies and genius entrepreneurs. China is still a manufacturing giant supported by its government and will remain so for many years.