Advancing the Internet of Things in Asia

September 2017

The fourth industrial revolution is upon us. This revolution is led by advancements in digital technologies, specifically the Internet of Things (IoT).

“The total potential economic impact of IoT will be in the range of $3.9 trillion to $11.1 trillion per year in 2025,” according to a new ADB working paper, The Internet of Things in the Power Sector: Opportunities in Asia and the Pacific, citing the McKinsey Global Institute.   

Essentially, IoT deals with communication between people and machines, machines to machines, and machines to institutions, and vice versa. Its components include sensors, identified “things” on which these sensors are applied, programming algorithms, and communication equipment and networks (Figure 1).


The Internet of Things

Any IoT-enabled solution has the following capabilities: (i) mechanisms to collect data from varied source, its secured storage, analysis and decision making; (ii) usage of different forms of information communication networks to enable machine to machine, people to machine and machine to institutions flow of information; and (iii) services components for creation and maintenance of software and hardware to execute smart functions.

Since its inception through smart meters and smart thermostats, IoT and related digital technologies are now used in various infrastructure sectors such as urban development, energy, and transport. It can take the form of smart city, smart grid, intelligent transport, respectively. The central nervous system for the smart feature in these sectors is IoT.  

In urban development, IoT can be applied to ensure cities become livable, such that they are green, competitive, resilient, inclusive, and sustainable – especially in Asia and the Pacific, where urbanization is rampant and the need to shift it to a better trajectory is imperative.

In ADB urban operations IoT can be utilized in each of the identified urban solution pathways – water, nature, equity, resilience, and digital – to add value and innovation, and thereby further enhance development. Figure 2 below is a schematic representation of the interconnection between livable cities and the Internet of Things.


Capitalizing on Internet of Things can lead to smart, competitive, and livable cities

There are also more specific IoT interventions to support urban development, as seen in Figure 3. Such applications can vastly improve efficiencies of operations and services in a city, as well as greatly increase convenience and safety of residents.


IoT applications can enhance urban services and improve efficiency within a city

However, like any business and technological transformation, IoT faces many challenges. Based on the working paper (though focused on the energy sector), these are grouped into three primary categories: customer expectations (for urban for example, will the benefits and impact be limited or inclusive?); regulations (a framework will have to address cyber security, data privacy, and interoperability); and investments. “IoT implementation and rollout will require investment to unlock the monetary and social benefits,” highlights the report.

To scale up IoT, not only should the challenges be considered but also the strategic implementation. It should not be viewed as a mere technology initiative. Instead, there should be a road map to guide goals in the short, medium, and long term. This can then ensure any projects incorporating IoT will not be for vanity’s sake, which might squander the investment. The Internet of Things, if applied well, has the potential to be a great equalizer for the region.   

For more information on IoT and how it can inform project design, read The Internet of Things in the Power Sector: Opportunities in Asia and the Pacific.

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Arun Ramamurthy
Senior Public Management Specialist (ICT and e-Governance),SDTC

ADB's Vision of Livable Cities

ADB’s vision is to transform the archetypical chaotic, polluted, inequitable cities of Asia and the Pacific into a competitive, equitable, environmentally sustainable, and climate resilient urban centers—in short, livable cities. This will require a new approach to city development, including how ADB supports that development.

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