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Countermeasure Research about Developing Internet of Things Economy

A Case of Hangzhou City

Jianfeng Li, Zuqing Huang

College of Economics and Management China Jiliang University, Hangzhou, China,, AbstractThis paper summarizes the strategic paths, technology
paths and application status quo of development of Chinas Internet of Things, analyzing the development status quo of Internet of Things in Hangzhou, putting forward Hangzhous such countermeasures of developing Internet of Things economy as: establishing Internet of Things technology zone, establishing industrial incubating bases, setting demonstrative projects of promotion and application of Internet of Things technology, accelerating promotion and application of Internet of Things technology and etc.. Keywords-Internet of Things; strategic path; technology path; countermeasure

Xiangbing Wang
Business School University of Shanghai for Science and Technology Shanghai ,China Nowadays, the typical application includes wireless remote automatic meter reading systems in water and electricity industry, digital urban systems, intelligent traffic systems, dangerous source, home monitoring systems, product quality supervision systems and etc.[3], as shown in Table 1.
TABLE 1. Application classification MAJOR APPLICATION TYPES OF INTERNET OF THINGS User/Industry Infrastructure of public utility Machine manufacturing Retail Chain industry Quality supervision industry Typical application Carbon copy of automatic water and electricity meter Intelligent parking lot Environmental monitoring Elevator monitoring Goods information tracking Vending machine Product quality supervision and etc. Medical monitoring Centralized monitoring of dangerous sources Monitoring of street lamp Intelligent traffic Intelligent power grids and etc. Traffic card New payment Intelligent home Industry and building automation and etc. Polices positioning monitoring Positioning monitoring of logistics vehicles



Aug. 7, 2009, the Premier Wen Jiabao pointed out in the inspection of Wuxi sensing network engineering technology R&D center: In national significant and special science and technology projects, China shall accelerate advancing the development of sensing network and shall establish Chinas sensing information center or perceptible China center as soon as possible. The sensing network is namely the Internet of Things and it is predicted to be the third wave of worlds information industry following the computer, Internet and mobile communication network. A. Concept of Internet of Things Internet of Things means a giant network formed by combining various information sensing facilities such as RFID devices, IR sensors, global positioning systems and laser scanners with Internet, aimed at connecting all objectives with network to make systems automatically identify, position, track, monitor and trigger relevant events in real-time[1]. From its functions, the Internet of Things is the information network connecting objects and having comprehensive perception ability for objects and credible conveying and intelligent treatment ability for information. The Internet of Things is featured as comprehensive perception, credible conveying and intelligent treatment[2]. B. Application of Internet of Things The Internet of Things is applied very widely in daily family individual application and industrial automation application.

Data collection application

Automatic control application

Medical care Machine manufacturing Construction Infrastructure of public utility Family Individual

Daily facilitation application Positioning application (Connect positioning function) Traffic transportation Logistics



A. Foreign development status quo Recently, global major developed countries and regions have established informationization strategies related to Internet of Things, hoping to breach the physical limit of Internet by the

Project 71071146 supported by NSFC. This paper is sponsored by Key Universities Research Institute of Humanities and Social Sciences in Zhejiang ProvinceStandardization and Intellectual Property Management. 978-1-4244-8694-6/11/$26.00 2011 IEEE

Internet of Things, realize ubiquitous Internet of Things and simulate the economic growth[4]. The US Intelligent Earth plan: In late-2008, IBM put forward the concept of Intelligent Earth, suggesting adequately utilizing the new generation of IT technologies in all industries, embedding and equipping the sensors in various objects such as power grids, railways, bridges, tunnels and highways everywhere all over the world to make the sensors generally connect to form Internet of Things, then integrating the Internet of Things through super computer to make human capable of managing production and life with more fine and dynamic modes to finally form Internet + Internet of Things = Intelligent Earth[5]. Obama Government has given the active response saying in the economic incentive plans, we will also invest the broadband and emerging technologies, which is the key for the USA to reserve and reconstruct competitive advantages in the new era. EU Action Plan of Internet of Things: June of 2009, EU Commission announced Action Plan of Internet of Things, realizing connecting such articles as books, autos, household appliances even food to the network to ensure EU play the dominant role in constructing new Internet. EU thinks this action plan will help EU to benefit from Internet transformation. Meanwhile, it also puts forward such challenges it will face as privacy problem, safety problem and individual data protection issue[6]. Japanese i-Japan Plan: Aug., 2009, Japan has put forward updated states informationization strategy-i-Japan Strategy 2015 following the e-Japan and u-Japan. The essential of the strategy is to largely develop E-government, E-local corporation, and promote the electronic medical care, health and education[7]. The government hopes it can exploit the new industries supporting Japanese mid-term and long-term economic development and largely develop environmental technologies, intelligent traffic systems and some other significant projects with green information technologies as the representative technologies through executing i-Japan strategy. B. Development status quo and problem analysisi of domestic Internet of Things In the brand new industry of Internet of Things, China has ranked in the worlds top position in technology R&D level[8]. Moreover, China has become one of the dominant countries establishing international standards together with Germany, the USA and Britain. China has lots of products and patents with independent intellectual property rights in sensor, communication, network and some other realms. China specially established EPC global China in April of 2004 in order to support the EPC promotion in China. June 8, 2010, Chinas Standard Combined Workgroup of Internet of Things was established on June 8, 2010, which will change the separate and incompatible situation of Chinas Internet of Things standards, strengthen topping design, overall planning and coordination and will accelerate establishing standard systems of Internet of Things with resource share, interconnection, intercommunication and unified criterion.

Presently, the key technologies of Internet of Things have been widely used. Nowadays, the RFID is mainly used in Etickets, entrance guard management, storage, transportation, logistics, vehicle management, industrial production line management, animal recognition and some other realms. The central government has also listed the RFID into the 11th FiveYear Plan and relevant departments have spent lots of funds in implementing worlds biggest RFID project at present (change the second generation residents ID cards). Different regions have also actively implemented such projects as traffic onecardthrough, campus one-card-through, electronic ID card, animal management, safety detection of liquid gas steel cylinder, university students electronic ticket-purchase falsificationprevention systems. The most of the above-mentioned applications are only the rudiments of Internet of Things and they havent formed a giant network. Nowadays, Chinas Internet of Things is still in industrial starting period of scattered application. There are still large differences between Chinas Internet of Things and largescale of industrialization promotion and the problems of the following four aspects exist mostly. 1) Large difficulty of industrial amalgamation: The development target of Internet of Things is to promote the deep amalgamation between information technology and other industries. This kind of amalgamation will be involved in enterprises business flow change, mechanical equipment modification, personnel post adjustment and etc. and it will suffer large resistance inevitably. 2) Scarcity of unified technical standard: The Internet of Things is mainly the application crossing industries and realms. The application features and users demands are different in various industries without unified standards and criterions, which leads high costs of exploitation, integration, deployment and maintenance of Internet of Things to restrict the scale application of business of Internet of Things. Chinas Standard Combined Workgroup of Internet of Things was just established and various works havent begun yet. 3) Scarcity of sustainable commercial modes: The industry chain of Internet of Things is complicated and it is involved in such many parts as terminal manufacturers, application developers, network operators and end users. The distribution of benefits for various parts is difficult and it is difficult to realize win-win, which leads non-sustainability of commercial modes and requires innovation and diversification of commercial modes. 4) Unsound policy environment: With the generalization of application of Internet of Things, more and more information about the states safety, enterprises secrets and individual privacy will be involved. The laws and regulations ensuring information safety and individuals privacy are expected to be issued to enhance the supervision of information application.



A. Analysis for strategic paths of industrial development of Internet of Things The industrial development of Internet of Things shall suffer such three phases as key application phase, scale application phase and universal application phase, as show in Figure 1.

cooperation perception and wide aggregation. The three stages will fuse with each other gradually and different hierarchies of demands will be satisfied through technology development, as shown in Figure 2. The main features of information aggregation stage are: Converge information distributed in multiple regions and collected by adopting multiple perception technology means. Converge the perception information to the business application systems through mobile communication network, intently execute treatment and share of information and supply information application services. The key technologies expected to be breached include: design and realization of sensors, shortdistance wireless transmission technologies, low power consumption technologies and etc..

Figure 1. Strategic paths of Chinas industrial development of Internet of things

Key application phase: explore the key application realms in industrial informationization and social informationization with leading enterprises in relevant industries as the enterprise leaders. Drive technology innovation with application innovation to primarily form rational industrial situation and industrial value chain. The industrialization breakthrough of top enterprises leading key application is the key in this stage and the success of this stage is very important for the prospects of the industrial development. Scale application phase: With the evolution of technology, further expand depth, scope and scale of informationization application of Internet of things, notably improve informationization shares of application of Internet of things and form the development situation of amalgamation and interaction between Internet of things industry and traditional industries. Universal application phase: Establish universal information service systems adaptive to the social development demands and perfect industry chain and industry layout of Internet of things in Chinas urban and rural regions to establish Chinas important position in global industry development of Internet of things. B. Analysis for technology path of development of Internet of Things industry As per the features in Internet of Things technology level, user requirements, system maturity and some other aspects, Chinas evolution routes of Internet of Things technologies can be divided into three stages including information convergence,

Figure 2.Technology paths of development of China's Internet of things industry

The main features of cooperation perception stage are: Execute the collaborative works in various layers including perception, network and application driven by events, tasks and targets. The systems have the distributive, cross-layer and selfstudy collaborative treatment ability and supplies intelligent and accurate diversified information services. The key technologies expected to be broken through include: large-scale selfgoverning group technologies driven by tasks, seamless fusion technology of mobile communication network and wireless sensor network, lots of information treatment technology and etc.. The main features of wide aggregation stage are: The wide perception service converge the lots of information to create new information with application value, namely, the Internet of things is widely applied in various realms to realize the interconnection and intercommunication for any person, any object, any time and any location and trigger new application and service modes. The basic theories and key technologies expected to be broken through include: information aggregation theory, fuzzy control technology, wide heterogeneous networks,

artificial intelligence, bionics sensors, nanometer materials, biochips and etc.. IV. TECHNOLOGY DEVELOPMENT AND APPLICATION STATUS QUO OF INTERNET OF THINGS IN HANGZHOU

leading and worlds top grade Internet of things industry base and application demonstration city of Internet of things technology and striving to build the Internet of things industry to be the industry valued at100b yuan in 2015. Some enterprises and institutions settling in Hangzhou have successfully applied RFID technology in their operation and operation activities. For example, Hangzhou Cigarette factory has applied the electronic label recognition and reading-writing technologies in the production and operation decision-making management systems of cigarette and logistics turnover transportation. Nowadays, Zhejiang Tobacco industry has planned to popularize this experience and combine all cigarettes of tobacco business enterprises in Zhejiang by affixing the electronic labels to all cigarettes to effectively solve logistics transportation and management problems. For another example, Hangzhous new library has successfully realized wireless network coverage of the whole library and adopted RFID technology to execute business management and services. This technology has been adequately applied in literature-checking and accurate positioning of literature, which largely improves the management efficiency of literature. Nowadays, Hangzhou has possessed a batch of scientific research institutions and enterprises making good achievements in their respect realms and having scientific research and production ability. As per the incomplete statistics, there have been 80 enterprises directly related to Internet of things in late 2009 with the over RMB21b annual production value. Among the Internet of things enterprises, many listed enterprises having powerful influence in intelligent safety guard, traffic, medical care and power grid realms including Yinjiang Electronics and Dahua Technology also emerge. Hangzhou Jiahe Intelligent Control Co., Ltd. has been one of the leading enterprises in wireless sensing technology application research, shouldering the construction of Hangzhou Jiahe Intelligent Control New and High-tech Research Exploitation Center determined by Hangzhou Science and Technology Bureau. V. HANGZHOUS COUNTERMEASURES OF DEVELOPING INTERNET OF THINGS ECONOMY

Hangzhous technology research and industrialization application of Internet of technologies has started early. Nowadays, the industry chain system including the design R&D of key control chip, sensors and terminal facility manufacture and system integration of Internet of things and relevant operation services has basically formed. Hangzhous has ranked in the First Position of development of Chinas Internet of things industry. Hangzhou Municipal Committee and Government have attached much importance to the promotion function of the wireless sensing network construction for Hangzhou Municipal informationization construction. Hangzhou has successfully held the first session and second session of International wireless sensing network development forum in 2008 and 2009 respectively and this forum will be held in Hangzhou periodically every year, creating advantages for Hangzhou to develop wireless sensing network technologies. Hangzhou Government will also supply large support to construction of computer treatment center, one of the important cores in the framework of Internet of things. May, 2009, Microsoft China signed the three-year strategic cooperation memorandum with Hangzhou Government. One item of the cooperation memorandum is establishing Chinas first cloud calculation center-Microsoft (Hangzhou) Cloud Calculation Center in Hangzhou. Jan., 2010, China Mobile Hangzhou Branch established Internet of things industry league under the instruction of Hangzhou Economic Committee and Information Office, based on which, China Mobile Hangzhou Branch has also joined hands with Huashu Digital TV Media Group Co., Ltd. and some other enterprises to jointly establish Hangzhou Internet of Things Industrial Association. Nowadays, the association has had over 70 unit members. This associate is the first industrial association of Internet of things in the whole province. March, 2010, Hangzhou Government established Hangzhou Internet of things Industrial Development Work Leading Group to instruct the development of Internet of Things industry in Hangzhou. April, 2010, US Silicon Valley---Hangzhou Internet of Things Industrial Innovation Center has settled in the Hangzhous east software campus as per the agreement. Additionally, Hangzhou has also established strategic cooperation partnership with China Electronics Technology Group, Shanghai Micro-system and Information Technology Research Institute Chinese Academy of Sciences and some other units. A series of projects including Chinese Academy of Sciences Hangzhou Radio Frequency Recognition Technology R&D Center have been settled in Hangzhou. Hangzhou also plans to join hands with Hong Kong University of Science & Technology to jointly establish GangkeDa Internet of Thing Research Institute. Hangzhous Ministry of Finance planned to spend RMB10m capital in supporting the development of Internet of things industry in 2010, endeavoring to build the Hangzhou to be the Chinas

Nowadays, the strategic path of development of Hangzhous Internet of things has been still in key application stage, which requires Hangzhous leading enterprises to firstly and successfully apply Internet of things technology to play the industrial demonstration role and lead industrialization breakthrough of key application realm. Hangzhou has still been in information convergence stage in technology path and it requires to joins hands with scientific research force of various scientific research institutions, colleges and leading enterprises to intently break through the key technologies expected to be broken through in information aggregation stage under the leadership of Hangzhou Government. Hangzhous network service supplier has played more significant role in developing modes, e.g. China Mobile Hangzhou Branch has established Internet of things industry league and has actively expanded Internet of things business. The following countermeasures are put forward through analyzing the strategic paths, technology paths and development modes of development of Chinas

Internet of things and combining the status quo and trend of development of Internet of things in Hangzhou: 1) Execute in-depth research and investigation, establish layouts. Hangzhous relevant departments shall join hands with Hangzhous colleges, universities and Hangzhou Internet of things Industrial Association and some other institutions to execute thorough investigation and research for enterprises and scientific research institutions which are engaging in relevant technology R&D of Internet of things in Hangzhou presently to comprehensively understand R&D, production and sales situation of relevant enterprises and make preparation for further issuing relevant policies. 2) Enhance policy and capital support and actively cultivate local Internet of things enterprise. Hangzhou shall establish guiding funds of Internet of things technology development to mainly endow enterprise to execute technology innovation. Hangzhou shall attract domestic and foreign venture capital to supply financing to Internet of things innovation enterprises in Hangzhou and cultivate a batch of Internet of things technology startup enterprises which have high return, independent Intellectual property rights (IPR) achievements and have good growth. 3) Establish Internet of things technology R&D science and technology zone, establish industrial incubating bases. The bottlenecks of development of Internet of things not only have technology problems, but more importantly also have market application problems. Hence, market demand is key factor of improving industry competitiveness. Hangzhou Internet of Things application demonstration zone and industrial incubating base can be established in Hangzhou Binjiang Region and Yuhang Region to supply one-stop services in capitals, technologies, talents, information, management and market to innovation of enterprises to attract domestic and foreign investment, encourage and guide Internet of things technology enterprises to gather in zone, promote scale development, intensive development and internationalization development of Internet of things industry. Meanwhile, Hangzhou shall actively apply for becoming the state-level Internet of things application demonstration city and build Hangzhou to be Chinas leading Internet of things industrial innovation base. 4) Set promotion and application demonstrative project of Internet of things technology, accelerate generalization and application of Internet of things technology. Hangzhou

Government shall focus on cooperating with large enterprises in public security, energy conservation and emission reduction, traffic logistics, electric power safety and some other realms to establish significant industrial demonstrative projects and shall popularize Internet of things technologies and products in public utilities and public services as soon as possible and finally build Hangzhous wide intelligent urban platform of Hangzhous Internet of things and largely improve the whole level of Hangzhous Internet of things technology application. 5) Accelerate cultivation and introduction of senior talents of Internet of things. Hangzhous Education Department can consider adding relevant specialties of Internet of things in colleges and universities and establishing sensing colleges when necessary. The new-established specialties or colleges shall cooperate with enterprises to jointly run the education, adequately utilizing existing enterprise resources to cultivate Internet of things market and talents needed by enterprises. Hangzhou shall exert the forces of Zhejiang University and other colleges to enhance cooperation with enterprises in technology R&D, scientific technology innovation, talent cultivation and some other aspects. Hangzhou can list the Internet of things sensing technologies into the universities practical training subjects and encourage university students and talents to return to China after studying abroad to come to Hangzhou to start business and develop Internet of things project. REFERENCES
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