1The gain in ground by IoT applications can be witnessed in several fields of social activity, from the most personal (domestic animals, health) to the most industrial (supply chain management). The wide range of applications already present is an indication that the trend is now well established. The weight and economic interest of some applications are boosting investment in research and development and encouraging long-term deployment of IoT uses. Moreover, due to its very general characteristics, the IoT is driven by major changes in society, such as more convergence, more network communication and more information systems, the increase in mobility and the development of autonomous socio-technical environments centred on individuals, as well as the strengthening of traceability and of the processes used to control individual activities. The IoT underlies both a consolidation of tools for simulation and modelling and the improvement of performance in physical reality, as a result of new opportunities for manipulating, treating and improving real identified objects.

2In the first case, it builds bridges between the world of the Internet and the real world by connecting objects and the information pertaining to them (identification, location, current state). In the second, it prolongs the promise of the Internet and of existing information systems by replacing observation and data capture with the integration of objects themselves into the network. This type of convergence has various designations (augmented reality, communicating machines and ubiquitous networks), thus demonstrating the variety of ways in which the Internet of the Future is developing.

3To understand the prominence of the IoT and the issues thereof, let us turn to some of the salient traits which indicate this shift towards the Internet of the future. Rather than linger on strictly economic and technological points, which will be examined later, we will focus here on a few characteristics of contemporary society. It is essential to bear in mind that the Internet of the Future comes within the framework of an already established socio-technical trajectory. The new directions taken show the influence of some of the initial orientations of the Internet which have had an impact on current infrastructure and configurations. For several years to come these choices will guide developmental orientations, governance structures and the uses of the IoT.

Boost for the economy

Reconfiguring the Internet and telecommunication sectors

4The IoT will no doubt have lasting effects on the reconfiguration of the Internet and its associated services, owing to the expanding role of search engines, the development of electronic intermediation, and the portability and interoperability of the different applications which reinforce related economic and developmental dynamics. Existing applications in fact show how some radically new activities – in the security and health service sectors for instance – can develop.

5In this time where telecommunications equipment and traditional connections have probably reached saturation point in developed countries, the IoT requires heavy investment to support research and development, to improve chips, sensors and readers, and to create and disseminate new services. These investments and developments are made at State, company and individual level ; they should represent a strong boost to Internet growth. In terms of use and technologies, the development of these innovations is evident in both the Western world and in emerging countries. From this point of view, they represent a strategic axis for telecommunications operators. The expansion of applications associated to the IoT could contribute to the increased promotion of high bandwidth architecture (Ultra Broad Band) ; however its furtherance is still uncertain due to questions being raised concerning the means of promoting new networks, and to the nature of the applications that could enable their deployment. In the context of wide-scale usage throughout the world, it could also pose serious bandwidth problems – which might be eased by the flows of connections and their redundancy. On this point, the case of China is interesting : 73 million users – that is 29 % of all internet users – connect themselves via their mobile phones, and this figure has grown much more than connections via laptops¹.

The contribution of new services to the industry in general

6Nonetheless, although the contribution of the IoT to industry or to consumers is highlighted intentionally, it is essential to stress that one of the reasons why the IoT excites such interest originates no doubt first and foremost from the fact that it may be a major development opportunity for industry and the economy at international level.

An opportunity to reduce the North-South divide

7Not only could the IoT represent a boost for development in European economies and, more widely, in those of the Western world, but it could also prove to be a means of reducing the North-South divide through creating opportunities for renewed cooperation with emerging countries. The IoT is in a position to offer new solutions to issues specific to emerging countries, or to countries whose administrative institutions are insufficiently solid. By opening the way to new forms of information automation and tracking systems, it could represent a substitute for poorly consolidated management, governance and coordination processes. The IoT could find unforeseen opportunities for growth in these countries, as already shown in the case of other technologies of information and communication, such as email and the mobile phone.

8This development could easily be backed by international organizations since several of their areas of intervention are directly relevant to the applications considered. This is the case of healthcare and prevention against the potential dangers of counterfeit medicine ; it also applies to the improvement of water management and the anticipation of climatic and geological risks. These are not random examples ; each corresponds to current experiments or existing solutions.

Table 4 Distribution of RFID applications by major societal area

Chart 1 RFID projects by application type

Table 5 RFID applications in the private and public sectors

One of the new challenges of international competition

9In this area, the large volume of Chinese investments (not only in technologies, but also in the processes of standardization) is noteworthy. This indicates clearly that, on the one hand, strong economic factors are associated to the IoT in this fast-growing country, and on the other, that this technology is also considered to be, in itself, a medium for development.

10A synopsis from the OECD² highlights more generally the importance of the potential RFID chip market and its current growth rate, which is both strong and rapid. However, it points out that it is difficult to give accurate data on the impact of this technology. This is due to the fact that it is not only still an emerging technology, but also that there are no aggregated impact studies related to different countries. Depending on the sources, estimations of the RFID solutions market vary from a few hundred million to several billion euros. Few detailed reports exist, but those carried out, particularly in Germany³, confirm the breadth of the impact of the IoT in terms of productivity, in addition to the wide variety of situations prevailing in different markets.

Governance

Change in scale resulting from the emerging use of RFID chips in everyday life

11From a technical perspective, the importance of the current outlook for the Internet of the Future can be explained by the development of miniaturization technologies, together with the reduction in costs associated to nanotechnologies, and above all, the various options for use offered by integration with information systems via the Internet. Although these perspectives may appear groundbreaking, they are not completely new. The first RFID chips were designed as early as the Second World War, and emerged in their modern form in the 1980s, before the Internet began its massive spread. The increased integration between physical objects, information systems and communication networks may account for these fundamentally new current developments and their results, which are often overshadowed by a narrow focus on their technical properties (frequency, power supply, etc.).

Emergence of new uses and the need for new arbitration

12This informational dimension obligatorily leads to a re-examination of the economic and technical balance associated to the IoT, and consequently, its governance. Complex questions are raised by the risks involved in the development of RFID. For instance, the protection of personal data is not only a matter for regulation through the setting of standards, but it also includes technical issues, such as the right to the “silence of chips” – that is, the possibility of deactivating them, or not. In addition it depends on the manner in which the information collected is stored. At the same time, however, the temptation to produce low cost chips in the near future may result in some players putting them into use before the development of reliable solutions for personal and industrial data protection.

13These questions are not new. The IoT runs the risk of a renewed focus on some of the more sensitive aspects of the Internet ; these that, in past years, already led to impassioned debates between different stakeholders. We will briefly present the main factors which pertain to business models of the Internet, its governance, and the protection of individuals.

The need to encourage rapid and wide-scale dissemination

14From an economic point of view, the success of the Internet itself raised two major types of problem with which the IoT might also be faced. The first concerned the possibility of ensuring sufficiently rapid dissemination and attaining an adequate critical mass to enable the simultaneous launching of applications at all the levels of a given industry. In this respect, the logistics of food retail distribution show that the capacity to disseminate technology throughout the whole supply chain is a determining factor in ensuring its durability and in reaping all possible rewards. This evolution implies that large investments may be made in order to support the construction of equipment, the development of large-scale applications and the capitalization of innovative companies. Speculation and the future collapse in investment are already to be feared if the expected economic return does not materialize, or if it is not as quick as anticipated. The second sensitive economic point concerns the separation that tends to be made between the needs pertaining to the management of infrastructures and telecommunications networks and the development dynamics of applications.

Additionally, the need to protect the neutrality of the network

15Reacting to the exceptional success of some companies such as Google, operators and access providers consider that this type of success should entail a contribution to the financing of infrastructures. Thus they tend to question what has been until now one of the founding principles of the Internet : its neutrality and undifferentiated processing of data. One must expect a similar question about the IoT to be raised shortly. Indeed, the latter can only widen the already existing gap between the business models at the core of infrastructures and those of users or domains of application, whether these are companies integrating the IoT into processes of production and logistics, or general public service suppliers.

The need for “multilateral, transparent, and democratic” governance

16The various forms of global governance of the information system represent another essential question for the IoT. Governance of the Internet is currently centred around organizations for technical standardization. This stems from the establishment of a consensus between operators and private players, and public organizations and user communities. The process, which, at the beginning, was envisaged to take place at a national level, has now been developed internationally. It assigns responsibility between different structures, each in charge of one component, such as interface technical standards, domain names, security and architecture development, etc. However, this type of governance has caused considerable controversy related to its effective degree of autonomy with regard to the most powerful countries and telecommunications operators ; and on the delegation of key Internet resources (the management of generic domain names, for instance) to private companies.

17Even more than the “traditional” Internet, the IoT brings into play strategic dimensions for economic and industrial activities, and therefore calls for reinforced forms of coordination and governance at national or regional level. Thus, while maintaining a lingua franca and the interoperability of the IoT, it is necessary to ensure a certain “regionalization” of the IoT to enable each State to exercise its prerogatives of sovereignty.

Guaranteeing the protection of individuals and companies

18The final major element in the governance of the IoT pertains to the protection of individuals and companies. The applications of the IoT regularly raise the question of privacy/personal data protection as they have a direct impact on the integrity of individuals, whether in their actions, the objects they handle, or their mere presence. This could lead to a dramatic rise in the difficulties already encountered on the Internet (traceability, interconnection of information, etc.), particularly where some recently developed applications are concerned (for example, social networks, research engines, mobile Internet). Over the past few years, reactions to the development of Digital Rights Management (DRM) and related regulation have revealed a growing will and capacity for control by users, and therefore an empowerment of consumers.

19Debates triggered by the IoT and the treatment of personal data may increase due to differences in the protection of individuals under varied legal systems : should priority be given to the protection of citizens from the action of governments or those of private operators ? Should the capacity to observe actions in the public space make information widely accessible de facto ? Technical configurations will be particularly determining in the way these questions are dealt with (by initiating the option of chip deactivation or of controlling data flow) but whatever happens, the answers will go beyond the purely technical.

20The quite legitimate focus on the issue of privacy must not overshadow a further essential dimension of data protection, relating to not only data on individuals, but also to sensitive data emanating from companies. Indeed, new problems have arisen regarding the integration of information on production processes or on the circulation of objects. Access to such information – even when it is partial – often has strategic value for rival industrial partners or those involved in trade relations. One can therefore wonder whether the protection of industrial data will now require the specific structuring of rules and regulatory organizations, in the same way that the possibility of cross-referencing individual databases led, in the past, to the creation of the French Commission Nationale Informatique et Libertés (CNIL) and its European counterparts.

21The following chapters aim to shed light on these different facets of the Internet of Things.