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TECHNOLOGY

The Internet of Things – from hype to reality

The Internet of Things

Sensors in elevators that alert government agencies to public safety risks; data from school bags to keep children safe; garbage trucks with the smarts to save cities money… The Internet of Things (IoT) will change everything. That is the conventional wisdom. We set out to look for evidence of this change in the government. How fast is it coming? Is it real? And our findings were mixed – sobering, but also encouraging.

On the plus side, we found government agencies keen to apply IoT to improve their business environment or reduce the burden on businesses while simultaneously increasing compliance. On the downside, very few IoT initiatives have been scaled beyond pilots, the business models to sustain IoT infrastructure are under-developed, and the policy landscape is woefully inadequate. There’s significant potential but it requires systematic, informed work by the government, private sector, and civil society.

Why the report

IoT has drawn significant attention lately from businesses and policy makers. Reports tout billions or even trillions of interconnected devices and their potential to alter every economic activity, and governments and private sector are keen to either seize the opportunity or protect existing advantages.

The private sector has made headway but our conversations with government policy makers, even in advanced economies, reveal a few gaps:

  • Knowledge – most government agencies are still relatively unfamiliar with IoT and its relevance to their immediate functions.
  • Translating the “hype to reality” – many were unsure about how to implement initiatives that included an IoT component; there seems to be a thirst for a “toolkit” to get them started.
  • “Lessons” from peers – most agencies expressed a keen desire to learn about initiatives in other governments, what had worked or hadn’t, and how that might affect their plans.

In our report (Internet of Things – the new government to business platform), we provide a basic definition of IoT which we hope is generally applicable and emphasize that the IoT landscape includes not only devices but also networks, and analytics.
 
Main findings

In the report, we highlight experience derived from actual work on the ground – drawn from examples in Germany, Canada, United Kingdom, Estonia, Kazakhstan, India, Japan, United States, and the United Arab Emirates. Like many other disruptive technologies, IoT is only just beginning to be a part of government services and our findings reflect its nascent character:

  • It’s still early days for IoT – we found numerous initiatives with an IoT component but almost no scaled applications even in advanced countries.
  • Policy/regulations have not caught up – most policy is still national, not local. It is also often restrictive. Most pilot applications have not yet fully considered the full range of either the opportunities or the risks associated with IoT implementation; in most cases, jurisdictions have taken a “wait, do, and learn” approach.
  • The business models are still evolving – many pilots are still experiments and lack a long-term funding model.
  • Skills and knowledge are a major gap – thinking digital is essential to truly utilize IoT, and most government agencies and the private sector lack the requisite managerial and technical skills (especially analytics).
  • Data is the key – data management is at the heart of IoT but most jurisdictions are still struggling with basic issues around collection, access, management, and valuation.
  • Infrastructure is a major barrier – IoT-specific networks are still poorly developed even in advanced economies.
  • Government has an important role to play – some of the best use cases for IoT deployment require public infrastructure and involve policy/regulatory issues; governments have a central role in the success (or failure) of such initiatives.
  • There’s no magic sauce but successful pilots do share common characteristics – the support of local leadership is crucial, and business models may be more local than global.


The IoT toolkit

IoT applications seldom exist in a vacuum. Most of the cases we studied were connected to a “smart” or “digital” initiative. That said, most interview participants stressed the need for an “IoT toolkit” that would let them approach these smart/digital implementations more systematically. We propose an initial framework on the following lines:

  • Leadership/policy – for IoT (and other digital initiatives), leadership must go beyond providing general support and actively look beyond old policy models that served governments well before the advent of the digital economy. Trade-offs between increased efficiency, reduced privacy, equality, and security require vision and implementation capacity.
  • Strategy and implementation – governments must make very specific policy, institutional, and infrastructure arrangements to successfully deploy IoT within their jurisdictions. Tools that we saw in action included –
    • “Sandboxes” that provided “living” conditions for IoT deployment and appropriate breathing room from existing regulations.
    • Coordination agencies that had the appropriate mandate and resources to deploy pilots and were not encumbered by prevailing bureaucratic silos.
    • Public-private partnerships that married the knowledge of IoT technology with expertise in delivering government services.
    • Local business models – one size of IoT definitely doesn’t fit all government agencies
    • IoT infrastructure – developed separately in many cases.
  • Capacity and engagement – standardization, skills, and engagement are essential for disruptive technologies to take root and we provide examples of several approaches.


Looking ahead

The report is a starting point to examine the actual progress governments have made in incorporating IoT within their functions. The toolkit is a provisional starting point for governments whose initiatives are still on the drawing board, but much must be done to close both the knowledge and implementation gaps. In the report, we recommend a few next steps and invite you to contribute further ideas.

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