Smart Cars will speed up IoT Innovation

What is the IoT?

The Internet of Things (IoT) is a complex subject that has garnered an increasing amount of attention across the globe since Bill Joy first introduced the Device-to-Device (D2D) Communication at the World Economic Forum in 1999. If you work in the intellectual property or technology field, you are most likely already familiar with the basics of IoT.

We will be discussing several aspects of the Internet of Things (IoT) in the article below. First, we will provide a brief summary of IoT. Then, we will discuss how the technology market, patent trends, and government interventions will continue to influence it. The changes to the automotive industry will also be further examined to show why it will remain a segment leader in innovation for connected-devices.

According to Jacob Morgan in A Simple Explanation of ‘The Internet of Things’, IoT means “connecting any device with an on and off switch to the Internet (and/or to each other). This includes everything from cellphones, coffee makers, washing machines, headphones, lamps, wearable devices and almost anything else you can think of.”

The typical IoT system includes three components; sensors for initial data acquisition, data storage and processing used to allow service, and display interfaces (including secondary development) used in service applications. Simply put, IoT is a way to allow multiple components to interact within a network to provide valuable information to the user and multiple components for automated collaboration and enhanced decision-making between the components.

How Big is the IoT?

According to McKinsey, the IoT market includes as much as $6.2 trillion of potential economic impact by 2025. They believe the two key component technologies with the largest upside include low-cost sensors and RFID communication devices. McKinsey also says the total global economy in 2025 will be $90 trillion. This means that IoT will consist of roughly 7% of the entire global economy by that time.

Global economic growth has remained relatively stable over the past 5 years at around 3%. So, the impact of a highly connected IoT market will be crucial to driving new growth. According to PwC’s 18th CEO Survey, “81% of CEOs see the mobile technologies as being strategically important for their organization.” That is, research firms and CEOs both view mobile connectivity as a major variable in future market outcomes.

IoT Patent Trends

The global economic impact of IoT is not the only impressive area of growth it will bring. According to a Patent Landscape Analysis cited by the World Intellectual Property Organization, there have been more than 17,000 patents for IoT-related technologies in the last year. There are three broad patent portfolio categories for IoT that include: Networking, Computing, and Infrastructure.

The largest subcategory, in terms of total number of patents, is resource management. However, many of the segments overlap with each other when you look at the applications in which they are used. For example, smart cars incorporate resource management, transportation, entertainment, alarm systems, communication protocols, and more. Consequently, it is important to look at the segment applications together to make a holistic assessment of which technologies may provide the largest opportunity. This is a key concept for experienced intellectual property experts during the patent evaluation process. To learn more about Patent and Portfolio analysis, please visit our Intellectual Property page.

Government Influence on Technology

The primary goals of the Department of Energy (DOE) may not seem to have direct correspondence to the creation of technology patents. However, their most recent DOE Strategic Plan has proven to be an overlooked indicator of influence because the relationship between technology patents and the DOE’s list of objectives is obscure.

Those broad goals are to improve energy consumption and efficiency. However, if you look at the details, the DOE is requesting to partner with the private sector to decrease vehicle emissions, improve fleet management, and improve manufacturing facility efficiency. The only way these things can be done are by developing and implementing highly connected sensors, databases and system applications. At closer inspection, government influence requires a holistic view to read between the lines for the impacts on the tech industry.

Remember, the US DOE is only one example of this kind of influence. If you look at the OECD Report on Gross Domestic Spending on R&D, it becomes clear that governments around the world are spending heavily on influencing technology in their countries. Across all nations, governments are spending more than 2% of total GDP on R&D. The focus becomes understanding where this research and development will make the largest impact.

Smart Cars Are Setting a New Bar as Vehicles Get Connected

According to Gartner Research, there will be 25 billion connected things by 2020. And, 250 million of those things will be connected vehicles. “During the next five years, the proportion of new vehicles equipped with this capability will increase dramatically, making connected cars a major element of the Internet of Things (IoT).”

Connected vehicles mean detailed data for carmakers, insurance providers, and service repair shops. It also means that now high-tech companies like Google and Apple are a part of the competition. Many have overlooked the added revenue coming from the protection of the data created by smart cars. Of course, don’t forget that if cars are made to self-drive, the user needs something to do while sitting in the seat. That is where a whole new industry of entertainment options will begin to thrive as passengers pay to be entertained.

Manufacturers that produce connected cars must also become smarter. Advanced manufacturing is a growing IoT benefit for factories, and as Strategy& explains in one of their studies, “overall equipment effectiveness has increased by 24 percent, labor utilization by 10 percent, and throughput by 10 percent [using IoT].”

Putting It All Together

The DOE says they “will partner with industry to discover and promote advanced sustainable transportation technologies.” Arjan Schutte, on, says 100% of cars will be sold online by 2025. The WIPO says there are more than 17,000 patents for IoT already, and McKinsey says 7% of the global economy will be generated from IoT.

Connected vehicles will be manufactured, sold, and operated using IoT data. Smart cars will begin to be the main driver of the fastest growing segment of technology – the Internet of Things.

When you compare patent trends to government initiatives and new automotive trends, it becomes clear that the impact that smart cars will have on the globe is much larger than most realize.