The Internet of Things (IoT) has been called the second great age of the Internet, although neither President Obama nor the Romney campaign have ever mentioned it. While our government remains silent, both the EU and China actively fund research projects, deploy IoT technology and create policies to govern it, raising the specter that we will be forced to buy vital technologies from abroad.

First, some background, since the business public is still largely unaware of the term Internet of Things, let alone the radical transformation it will bring to every aspect of our lives within this decade.

IoT is the concept that the same Internet that links humans can also link things – smartphones, computers in cars, industrial sensors and household appliances. Some say it became a reality in 2008 – the Internet now links more “things” than people – and IBM estimates that 1 trillion things will be networked by 2015!

That will in turn allow a wide range of innovations:

  • Healthcare will become a continuous patient-doctor dialogue.
  • Transportation will flow smoothly because vehicles sense each other’s presence and adapt accordingly -- if Google’s prototypes are brought to market, cars may actually even drive themselves.
  • Machine-to-machine communication will streamline assembly lines and supply chains.

In addition, IoT experts say it is the last, best hope to address massive global problems such as energy needs and global warming.

American firms are pioneering IoT innovations such as IBM’s Smarter Cities program or Vitality, Inc.’s prescription jars that tell your doctor if you took your pills. But they are threatened by state-supported Internet of Things projects underway in the EU and China. 

IoT in China

Nowhere is it more of a priority than China, where Premier Wen Jiabao called it an economic development priority in several speeches and in one case offered the formula Internet + Internet of Things = Wisdom of the Earth.

According to consulting firm CCID, the total value of China’s IoT industry last year was nearly $41 billion. CCID reported wide-ranging applications: “intelligent” industry, logistics, transportation, medical treatment, agriculture and environmental protection and the smart grid for electricity. The government routinely includes IoT elements such as sensors in public works projects such as bridges or high-speed rail, so structures will report when they need maintenance.