Data-Driven Development

Internet of Things: Data Is All Around

According to Swedish IT equipment manufacturer Ericsson, "things" connected to the internet will overtake devices used by humans in 2018. Cisco reckons some 12 billion devices will be connected to the internet by 2020 that talk to other devices or computers, up 20 percent a year from 2015 (figure 2.5, panel a). These so-called machine-to-machine connections form the heart of what is referred to as the Internet of Things (IoT), an interconnected ecosystem of sensors, meters, radio frequency identification chips, and other gadgets. Traffic from these things will grow at twice the rate they are being connected, or 40 percent a year from 2015 to 2020, from 1 exabyte per month to 6.3 (figure 2.5, panel b).

Machines have talked to each other for years over communication networks using electronic data interchange and other formats, largely to exchange financial information such as transactions from bank automated teller machines or companies ordering products or services from each other. The IoT expands scope, as the things doing the communicating are generally small devices and sensors tracking everything from utility use to automobile movements.

A report from the International Telecommunication Union (ITU) and Cisco argues that the IoT could be beneficial for developing countries, since it lowers the cost of service monitoring and delivery, allowing countries to gain in areas such as health and energy over a shorter timeframe than ever before. The ITU has formed a study group to enhance global standardization and collaboration on the IoT. One example is Ghana, where sensors are helping improve the vaccine supply by indicating whether refrigeration was affected during transport

The gap in IoT adoption is wide, according to statistics. For example, adoption of machine-to-machine communications, a subset of the IoT, varies tremendously in Organisation for Economic Co-operation and Development (OECD) countries, with Sweden and New Zealand ahead by some margin in respect to machine-to-machine connections per 100 people (figure 2.6). Sweden's telecommunication companies are striving to be leaders in Internet-of-Things services, and the country also has a sizable Internet-of-Things startup ecosystem. And a major reason for New Zealand's high penetration is that the main gas and electricity company has installed more than a million smart meters in homes and businesses across the country.

Figure 2.6 Machine-to-machine connections per 100 people, OECD member countries, june 2016

Many analysts see fifth-generation (5G) wireless technology as critical for the IoT because of its expanded data handling. According to one report, 5G networks can process about a thousand times more data than today's systems. Of particular relevance for the IoT is 5G's ability to connect many more devices (such as sensors and smart devices) than previous generations of wireless. A major milestone was reached in December 2017 when the first 5G specification was approved by the 3rd Generation Partnership Project and endorsed by many of the world's leading telecommunication equipment manufacturers and operators. The ITU's World Radiocommunication Conference 2019 aims to establish standards for spectrum management and harmonization for 5G.15 Some countries cannot wait, such as the United Kingdom, which earmarked some 3.4 GHz for 5G and auctioned it in March 2018. Operators in several countries have announced commercial deployments of 5G before the end of 2018.