What challenges to look out for now the ‘era of connected things’ has quietly arrived

 In China, the number of connected things has surpassed connected humans as the internet of things (IoT) proliferates.

In China, the number of connected things has surpassed connected humans as the internet of things (IoT) proliferates. Image: Unsplash/Bence Boros

Winston Ma, CFA Esq.
Adjunct Professor, New York University
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  • In China, the internet of things (IoT) has proliferated to the degree that there are now more connected things than connected people.
  • As the era of connected things has expanded into industrial applications and emerging technologies advance, several problems still need to be solved, including its rollout at scale.
  • Societal challenges, such as the infrastructure gap, personal data protection and e-waste, must be tackled head-on in the new era of connected things.

In August 2022, the number of connected “things” (mobile devices) exceeded the number of connected “people” for the first time in China.

According to the Ministry of Industry and Information Technology (MIIT), there were 1.698 billion devices connected to the internet of things (IoT) in China’s mobile network, surpassing figures for mobile phone users. That trend is accelerating.

In just a few months, 52.3% of all connectivity in China was represented by “things” (1.845 billion) by the end of 2022 (see Figure 1). Therefore, China will see more IoT-driven digital transformation in the coming years.

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Extending the digital lifestyle

In addition to the obvious extension of the digital lifestyle (for example, “smart homes”), the IoT development in industries (IIoT) could have broad applications in manufacturing, healthcare and public services. The IIoT may transform industries in the future by enabling businesses and consumers to monitor, analyze and control devices remotely.

Figure 1: The number of “connected things” in China surpassed “connected humans” in 2022 (Unit: 100 million)
Figure 1: The number of “connected things” in China surpassed “connected humans” in 2022 (Unit: 100 million) Image: Ministry of Industry and Information Technology

For example, China’s northern Tianjin port is looking to develop a “digital twin” in three to five years, aiming to fully automate all dock operations to cope with COVID-19-induced supply-chain disruptions and labour shortages. The port will work with communications technologies, artificial intelligence (AI) and autonomous driving companies to install software and sensors on autonomous vehicles, build up fast and reliable network connections and use wireless technology to guide robots at the port and vehicles on roads.

Industrial ripple

The same IIoT trend is also emerging in the world markets. Siemens, for example, considers IIoT the “spark for the IT-OT fusion,” combining information technology (IT) with operational technology (OT) – which monitors and controls industrial operations – to enable maximum transparency in a digital enterprise so that the data generated across disciplines can be used within and beyond company borders.

The development of the metaverse will accelerate the IoT trend. More than games and tokens, the metaverse and business sectors will integrate and form an “industrial metaverse.” For example, the Chinese e-commerce platform JD.com is working toward a “fusion” of its transaction network, warehousing and distribution network and service network to realize a complete chain of “digital intelligence,” according to a company blog post.

Problems of scale

Of course, many technical difficulties are ahead, such as scalability and interoperability. Cellular IoT also poses a problem, where connectivity is available worldwide but owned by disparate mobile network operators. Therefore, global IoT solutions need to create agreements with carriers worldwide; people and companies worldwide must have agnostic technologies to connect people, places and things.

For example, the latest telecom innovation, the so-called “Cat M,” is a low-power wide-area technology designed to support “massive IoT,” i.e. IoT on an unprecedented scale. Meanwhile, their technological standards must converge to establish common protocols and APIs to support enterprise applications.

But more importantly, three societal challenges emerge from the IoT era.

IoT’s societal dilemmas

1. The infrastructure gap

High-performance, reliable and secured digital infrastructure is a critical enabler of transformations. Countries like China, the United States and India are investing massively to accelerate their 5G network and cloud infrastructure rollout.

Meanwhile, emerging markets lag in digital infrastructure and around a third of the world’s population needs to be connected. Many “connected” people in less developed countries also cannot reap the benefits of internet connectivity due to barriers such as affordability and lack of skills.

Then, as the latest boom of AI like ChatGPT shows, AI runs on data and that correlation leads to a self-perpetuating cycle of consolidation in industries: the more data you have, the better your product; the better your product, the more users you gain; the more users you gain, the more data you have.

While we are acutely aware of the “internet gap,” where the lack of internet usage limits financial, health and education inclusion in emerging markets, we must also act now on the “AI gap,” where AI and the IoT revolution in industries will widen the gap among nations.

2. Privacy and security of personal data

With billions of connected devices collecting and transmitting sensitive information, the promise of IoT is only as good as the privacy and security behind it. The year 2023 may see an increase in automated attacks against home smart devices at scale due to the rise of devices worldwide.

As IIoT combines several technical elements such as hardware, software, data transfer and storage, network connectivity and more, multiple areas can be exploited to gain unauthorized access. For example, the healthcare industry might be seen as behind this digital trend but you want to have ultimate safety and trust.


3. Environment shock by rising e-waste

IoT has a looming e-waste problem. That is because most IoT devices have dangerous elements inside, ranging from heavy metals such as lead, mercury, cadmium and beryllium to hazardous chemicals like brominated flame retardants.

Even before the latest IoT boom, reports from the Global E-waste Monitor showed that the world generated more than 50 million metric tons of e-waste in recent years. The increase in smart wearable devices, smart cars, and more industry IoT devices will lead to more e-waste. If we don’t find a sustainable solution to recycle them, IoT will result in “the Internet of trash.”

Are we ready?

In summary, the next decade will see the merging of the physical, digital and biological worlds in ways that create considerable promise and potential peril.

Hundreds of billions, if not trillions, of new digital infrastructure, will be needed and implemented. The transformation of industries will far exceed the consumer internet boom we witnessed last decade and the e-waste issue may be amplified.

Finally, are we ready with sufficient data regulation, privacy protection and AI ethics for the new Internet of Everything?

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