Europe needs smart policies for smart things

The Internet revolution is not over, but it is changing. Its first wave brought billions of people online to connect and communicate through email, websites, social networks and other platforms that allow consumers to work, conduct commerce, learn and meet. The next wave will bring online billions of machines and devices that will make our lives easier, our commerce more efficient and our cities smarter. But unless policymakers play their part, the benefits will come too slowly and at too high a price.

Most of these connected devices – the new Internet of Things (IoT) – will be buried out of sight deep within factories, farms, warehouses, transport networks and utilities. Using sensors, warehouse shelves will know when they are nearly empty and send for more stock. Bridges will know when they are developing structural problems and will call maintenance crews for repairs. Waterways will warn environmental regulators about spikes of toxic algae. Cars will communicate with each other and the infrastructure, allowing traffic lights to be dynamic and warning people of impending collisions. Indeed, by 2020, there will be an estimated 26-50 billion connected devices worldwide. They will turbocharge the world’s productivity, adding up to $11 trillion in value per year by 2025.

The opportunities are particularly significant for Europe, where the public sector has already pioneered a number of initiatives for using the IoT that have become case studies for the rest of the world. The Spanish region of Asturias, for example, has launched a programme that will use unmanned aerial vehicles to detect floods, fires and other risks. When the drones detect rising water levels in waterways and reservoirs, they will automatically trigger an emergency alert to warn the public about the risk of flood. Paris has installed sensors on trees to detect damaging bacteria and on city streets to optimise maintenance. The cities of Cologne in Germany and Eindhoven in the Netherlands have launched traffic control initiatives  using sensors on roads, railways and bridges to alert motorists of congestion or accidents. Europe’s proposed eCall initiative then promises to assist motorists involved in collisions anywhere in the European Union by using devices installed in vehicles to automatically contact the emergency services and send them crash details with GPS coordinates.

These examples hint at the enormous benefits that the IoT can offer. But to maximise these, Europe needs a comprehensive strategy encompassing not only investment within the public sector but also a wider programme to ensure there is no lag in the adoption of the technology by the private sector and consumers.

Europe should begin by building aggressively on its leadership in the public sector. Policymakers at every level from Brussels to city managers should seize flagship municipal initiatives as blueprints for more effective public services. The potential for the IoT is so closely tied to such areas as health, environment, transportation, defence and land and city management that the possibility of gaining significant benefits in the near future is actually stronger in public services than in the private sector.

European policymakers then need to take responsibility for removing barriers to the widespread adoption of the IoT. In particular, they should encourage the private sector to agree to common standards. The British government’s Technology Strategy Board, for example, provided £8m for an industry working group called HyperCat to develop an open standard for the IoT and reduce the need for additional software for facilitating data sharing with newly-connected devices. Likewise, it’s critical that the European Commission works to develop more continental radio spectrum markets and work to free up additional spectrum that the billions of wireless IoT devices will need.

Governmental R&D investment can play a role in speeding up the development of the IoT. It should not be forgotten that government-sponsored R&D helped smartphones, search engines, genomic sequencing and, of course, the Internet get off the ground. Government funding should of course not seek to crowd-out private investment; it should be complementary, seeking to advance research in areas that benefit the market as a whole.

Lastly, Europe needs a regulatory environment that does not unnecessarily limit IoT adoption. Anxiety that European companies will not play a major role in providing technology and services for the IoT, or unsubstantiated fears about security and privacy, should not guide regulation affecting the evolution of technology in Europe. Seeking to promote ‘national champions’ rather than the technology itself is likely to lead to inferior or overpriced technologies. And pre-emptively imposing strict privacy regulations on the IoT, like notice and opt-in requirements, will raise costs and slow down adoption.

Europe’s policymakers have already shown that they can think boldly and imaginatively about bringing citizens the benefits of the Internet of Things. They now need to consider what smart policies are needed to ensure they deliver on their promise.