Internet of Things Scale Application: Where are the roads?

The Internet of Things is an important engine for transforming the mode of economic development. The application of the Internet of Things is of great significance. The Internet of Things will effectively promote the deep integration of informationization and industrialization, optimize and upgrade traditional industries, and promote the strategic adjustment of economic structure and the profound transformation of development methods. The Internet of Things can be widely used in various fields of economic and social development. The application of social networks in social development, public services, urban management and people's lives will effectively improve the effectiveness of government management, infrastructure and urban management, and the efficiency of the use of resources and environment to achieve social public Service, people's life is smart, convenient, and green, and coordinated and sustainable development of the economy, society, people, and nature is promoted.

At present, a series of pilots and demonstrations have been carried out in China’s Internet of Things (IoT) application in smart grids, intelligent transportation, smart logistics, smart homes, environmental protection, industrial automation, medical and health care, precision agriculture and animal husbandry, financial services, and public safety. National defense military and other fields have made relevant progress. However, we should also note that China’s Internet of Things is still in the initial stages of development and some demonstration applications. It has not formed scale applications and it is a certain distance from developed countries. Only when the Internet of Things realizes scale application can it provide its technology and industry with a place to use it, and it can achieve the role of the Internet of Things as an important engine for economic and social development. So, what are the factors that restrict the application of China's Internet of Things? How to realize the scale of the development of China's Internet of Things is worth pondering.

Five factors restricting the scale of Internet of Things The large-scale application of China's Internet of Things faces five major constraints: cost pressures, long-tailed demand, market mechanisms, departmental coordination, and business models.

The high costs of products and technology solutions have restricted IoT applications. On the one hand, the key technologies and standards for IoT applications worldwide are still immature, and the prices of core products such as sensors that meet the needs of the Internet of Things are high, which restricts the scale of applications of the Internet of Things. For example, current sensor prices for some industries range from tens of thousands of dollars to hundreds of thousands of dollars, and the high cost makes it difficult to promote the use of IoT on a scale other than small-scale demonstration. On the other hand, some relatively mature IoT products do not have high absolute costs themselves. However, compared with the low-cost demands of industries such as agriculture and retail industries, the input and output of products and integrated solutions are still relatively low. Uneconomical, such as RFID tags are still too costly for the lower value of agricultural products.

The demand for Internet of Things (IoT) is highly tailed and there is no corresponding production method. The application of the Internet of Things needs to be deeply integrated with the production processes of each industry and enterprise. Therefore, the requirements are very different. In the current situation where the application, technology, and industrial standardization are not high enough, the individual needs cannot be abstracted as The common industry and business needs lead to the products, technologies, and solutions of the Internet of Things that need to be matched and customized according to each industry, every city, and even every enterprise. It is difficult for the Internet of Things products and service providers to achieve economies of scale, and the application market It is difficult to start large-scale.

The market mechanism for IoT applications is not perfect. The mechanism of factor price formation in some areas is not conducive to stimulate the internal motivation of the application of the Internet of Things. When the price system of resource allocation is distorted or non-market-oriented, it may lead to adverse effects on the application of Internet of Things, especially on the basis of some executive-led In the energy price system, the economic lever environment and production factor price system required by the Internet of Things have not yet been formed. Enterprises do not have enough incentives to use the Internet of Things technology to transform the production process and directly limit the scale of the Internet of Things.

Lack of strong cross-sector, cross-regional, cross-industry application coordination mechanisms. On the one hand, the internalization of IoT applications in some industries is obvious, and there is a certain degree of exclusion from the market forces outside the industry or enterprises. This is not conducive to the formation of socialized, commercialized IoT services and enterprises, and it also improves the market access of IoT services. Barriers are particularly detrimental to the entry of private capital. On the other hand, the coordination mechanism between different industries, different management departments, and different regions is not smooth, and the division of departments, segregation of industries, and local protection have caused difficulties in data sharing, resulting in the formation of isolated islands of service, making it difficult to promote the scale of Internet of Things development and playing an intelligent decision-making role.

Lack of a replicable, sustainable business model. The question of "who pays bills" will still be applied to the Internet of Things. At present, the development of the Internet of Things in China is basically driven by the government and a few large state-owned enterprises from top to bottom. The government is dominant and the market power is insufficient. The lack of interaction between supply and demand, and the enthusiasm of market entities are not high, and the profit model is still being explored. The link between government-led demonstrations of public applications and market mechanisms has not yet been established. There are no successful models for sustainable development after the demonstration.

A multi-pronged, three-dimensional interaction can advance the five constraints that should exist for the scale of China's Internet of Things. We believe that in the process of advancement, different entities such as government, enterprises, and industry associations should be involved in industry supply, demand stimulation, and departmental coordination. The multi-dimensional interaction between the cultivation of market environment and the exploration of business models.

To ease cost pressure constraints, the state should increase financial support and subsidies to increase industrial supply and stimulate user demand. In order to stimulate support for industrial supply, it is necessary to introduce measures for the identification of Internet of things products and services as soon as possible, and increase its fiscal and taxation policies. Supporting efforts, such as: grading equipment and equipment, appropriately shortening the depreciation period; deducting deductions from R&D expenses for public design platform fees; and exempting business tax and corporate income tax on income from IOT-related technical consultation and technical services. For investment key laboratories, one-time taxation is provided for expenses; Internet of Things companies must refer to integrated circuits and software companies, and their related products and services are exempt from the tax. In stimulating the needs of industry users and direct consumers, the state should implement special funds for the Internet of Things and establish a diversified investment and financing system. The study will focus on special funds and supplemented by government subsidies to explore ways to support innovative companies and directly subsidize consumers. The use of interest subsidies, guarantees, etc., to guide all types of social funds to support traditional enterprises to apply IoT technologies and products, integrate existing private industry investment funds, and encourage the establishment of Internet of things venture capital institutions and industrial investment funds.

Give full play to the power of non-governmental organizations such as industrial alliances, and achieve interaction with relevant government departments, expand the channels for IoT applications, make full use of the positive role of the Internet of Things industry alliance, encourage regular product exchange meetings, and select brands on the list. Holding the 100 Best Internet of Things selection activities to provide a stage for corporate innovation. According to recommendations of industry associations or evaluations by third-party agencies, the government can increase the government’s first subscription in the areas of urban management and public services, and expand new subscription channels for Chinese localities without violating international rules. The growth of networking companies provides opportunities to advance the scale of application of Internet of Things.

Improve the market mechanism and break the non-technical barriers that hinder the development of the Internet of Things. First, gradually introduce private capital in key industries of the Internet of Things, carry out pilot reforms of state-owned enterprises, prevent competition through the use of competition regulations to prevent the further consolidation of information and resource monopoly, and promote the application of Internet of Things. The socialization and commercialization of services will nurture third-party service companies in the Internet of Things. Third, it will improve the operation of the Internet of Things and factor price mechanism. It will gradually establish a market supply and demand relationship, resource scarcity, and other areas in key applications of the Internet of Things, such as smart grids. The price formation mechanism of environmental damage costs; Fourth, moderately open information sources, break down industry barriers, and under the premise of ensuring national strategies and national defense security, appropriately open relevant sources of government information to promote the development of the Internet of Things information service industry, for example, wisdom. Cities are entry points and open up information such as social security information, weather information, and traffic information.

Explore business models and cooperation memorandum for innovative IoT cross-industry applications Explore the integration between government-led demonstrations of public applications and market mechanisms, realize the sustainable business model after demonstration, and solve the problem of “who pays for orders”. Establish the principle of “who will open up and who will benefit”, establish a memorandum of cooperation, and organize departments and industries that actively open up information sources in the application of the Internet of Things, and incorporate fiscal and taxation policies and consumer subsidy policies, and explore the value-sharing between different industries. mode.