--- Review of developments of the Internet of Things in China in 2009 and its future outlook
                                                 Wang Kun, Information Industry Research Center

I. Review of developments of the Internet of Things in China in 2009 and its future outlook
The year 2009 has been an eventful year for the Internet of Things in China. On August 7, Chinese Premier Wen Jiabao made an important speech in Wuxi calling for the rapid development of Internet of Things technologies. On August 26, the Ministry of Industry and Information Technology said it was closely following up developments of the Internet of Things and would attach great importance to related research. On September 11, the Ministry of Industry and Information Technology set up a working group on sensor network standardization. On November 3, Wen Jiabao delivered a speech at the Great Hall of the People in Beijing. In the speech entitled Let Science and Technology Lead China’s Sustainable Development, he once again stressed the great significance of scientifically selecting emerging strategic industries and called for unremitting efforts to make breakthroughs in key technologies for sensor networks and the Internet of Things. A series of actions taken by the Chinese government show that greatly developing the Internet of Things industry will become an important decision of strategic national significance for China in the future.

CCID Consulting’s research shows that the Internet of Things has a bright future in the fields of safe homes, power security, public security, health monitoring, intelligent transport, environmental protection and protection against intrusion into important regions, with a market size expected to exceed tens and even hundreds of billions RMB. China’s Internet of Things industry will reach a size of 200 billion Yuan in 2010 and 750 billion Yuan in 2015, with a CAGR of over 30%. This market looks brighter than the market of computer, Internet or mobile communications.

If the year 2009 can be said to be the starting year of the Internet of Things in China, 2010 will be the most vital year for its development. CCID Consulting’s research shows that “policy going first, technology taking the lead and demand driving forward” will become the main development model for China’s Internet of Things industry in 2010.

In 2010, the Chinese government will introduce a series of industry policies relating to the Internet of Things. Government departments including the National Development and Reform Commission and the Ministry of Industry and Information Technology may all introduce relevant industry support policies to speed up the development of China’s Internet of Things industry. Meanwhile, all provinces, municipalities and all industrial parks will also release their relevant supporting policies. Jiangsu Province and Beijing will be the pacesetters. As for technology and standardization, BUPT, CAS, NUPT, the Wuxi-based China’s Internet of Things Industry Research Institute and the China Internet of Things Standardization Organization are expected to make breakthroughs in Internet of Things standards and key technologies. In the next few years, industry applications will become the main driving force for the development of the Internet of Things industry. In its research, CCID Consulting has concluded that intelligent transport, city security and smart grid will be the key development fields of the Internet of Things in the next few years. These industry segments are all characterized by mature market, advanced technologies, great government support, broad prospects and huge investment opportunities.

II. Bottleneck factors restricting breakthroughs in China’s Internet of Things industry
As far as the current status and trend of China’s Internet of Things industry are concerned, there are both good and bad news. The Internet of Things has a wide demand for industry applications, and its potential market is also huge. One “good” piece of news for the development of the Internet of Things industry is that all government departments are positive about the industry. The “worrying” aspect is mainly that in the early stages of the industry there are still many factors restricting industry development.

Through its research, CCID Consulting has identified the following bottleneck factors restricting breakthroughs in China’s Internet of Things industry:
1. Establishment of a standardized system
Standard is a unified specification for any technologies. The Internet of Things is still in its initial stage in China. Even worldwide, no unified standardized system has been introduced. Establishment of such systems will become a prerequisite for the Internet of Things industry to develop.

2. Breakthroughs in core technologies of proprietary intellectual property rights
Core technologies of proprietary intellectual property rights are the fundamental impetus for the sustainable development of the Internet of Things industry. Technologies for the Internet of Things are emerging strategic technologies at the national level. Establishing national and regional Internet of Things research centers and grasping core technologies of proprietary intellectual property rights will be of vital significance to the development of the Internet of Things industry.

3. Introduction of proactive and feasible policies
Internet of Things technologies are emerging strategic technologies at the national level and are of great significance to national strategy and sustainable development. Introducing relevant feasible industry supporting policies is one of the key factors for breakthroughs in China’s Internet of Things industry. Particularly in the important industry application sectors of finance, transportation and energy which are vital to national economic development, policies orientation can exert a major influence on industry development. “Policy Going First” will be an important guarantee for the fast development of China’s Internet of Things industry.4. Active coordination and interactions between all competent industrial authorities
The Internet of Things has a wide range of application fields. There is considerable overlapping between many industry applications. However, such industries are respectively administered by different government departments. In the industrialization process, it is necessary to strengthen the coordination and interactions among various competent industrial authorities. This is the only way to effectively guarantee the smooth development of the Internet of Things industry. For example, it is necessary to strengthen cooperation between the competent administrative departments for radio and TV, telecommunications and transportation so that they can jointly push forward the establishment of IT-based and intelligent transportation systems.

5. Implementation of major special projects in key application fields
In order to push forward the fast development of the Internet of Things industry, it is also necessary to develop major special projects for key application fields, promote the R&D, application and demonstration of key technologies, and drive forward the sustainable and healthy development of the whole industry through an industry development model of “pilot work and key demonstration projects”.