Internet of Things: A Key to Strengthening U.S.-China Relations

Jacko WalzIoT, US-China Relations0 Comments

Guest Post by Jacko Walz (NYU Shanghai Graduate, Incoming Schwarzman Scholar)

Arguably the most disruptive force entering the industrial sphere is the emergence of the Internet of Things. The Internet of Things refers to vast, interconnected networks of “smart objects,” which can collect and push actionable data. This transformation of the industrial sector is driven by the proliferation of smaller, cheaper, and more effective sensors. Robust software platforms also increasingly underpin the technology.

Predictions from Mario Morales of the International Data Corporation

IoT is a remarkably impactful development. It enables firms to enhance their efficiency by granting them access to vast quantities of data, allowing them to make informed business decisions. China and the U.S. stand uniquely positioned to take full advantage of the Internet of Things. They can forge a partnership that could revolutionize industry around the world, change the way factories operate, and provide consumers globally with cheaper goods.

IoT- China and America

China’s Advantage

photo from techcrunch.com

China maintains a distinct and globally dominant competitive advantage on the production of high quality sensor technology. Factories in China produce a mind boggling array of sensors including accelerometers, temperature sensors, and air quality sensors, sometimes for as little as mere pennies.

As China grows ever more efficient in its production of sensors, a vast amount of opportunities begin to emerge. The dramatic shift in the price of sensors, steered by Chinese ingenuity, has ignited an explosion in their use and capability. This is because the fixed cost of attaching a sensor to an object now approaches zero in some cases.

America’s Response

On the other side of the coin, the U.S. proves a fierce force in the development of cutting edge software, middleware, and cloud technologies. Juggernauts like Qualcomm and GE have put forth expansive IoT platforms that provide rich software solutions facilitating the utilization of collected data. This software is incredibly complex and demands an enormous investment in R&D; only the world’s leading technology providers – U.S. tech conglomerates like GE – are capable of developing such intricate platforms.

Problem-solving between the two nations

photo from imperialenterpriselab.com

China provides the world’s best and cheapest hardware, and the U.S. is unmatched in software. Clearly, the synergy between the two is obvious. However, as of now there has been significant friction between the two sides, putting the breaks on a widespread adoption of the Internet of Things.

U.S. platform providers are hesitant to adopt Chinese sensors, and Chinese sensor producers prefer to utilize domestically developed software. There is a considerable opportunity to be found within the cracks. Firstly, each country must leverage the advantage of the other and consequently accelerate the Internet of Things. This can drive what could be considered the next industrial revolution.

IoT- What is the true purpose?

Extensive adoption of the Internet of Things enables firms to unlock nearly infinite quantities of data. With this ability, they can make informed business decisions, pushing down costs and allowing them to identify new revenue generating opportunities.

The result of this will be a significant decline in the price of many goods, subsequently granting the average consumer increased control of their own economic situation. Lower prices of consumer goods due to IoT adoption could be the jolt needed to revitalize China’s flagging consumption levels.

Benefits of cooperation between U.S. and China

A formal partnership between the United States and China, with the defined mission of promoting and facilitating the adoption of the Internet of Things, would have a profound effect on global welfare and economic development.

Resurgence of the USCREP

Photo from thediplomat.com

This partnership would not be without precedent; policymakers on both sides could look to the existing U.S.-China Renewable Energy Partnership for inspiration. The USCREP was organized with the hope of driving breakthroughs in renewable energy technology, thus minimizing the countries’ impact on global warming, improving the quality of the environment, and ultimately promoting a safer and healthier world for everyone.

The U.S.-China Renewable Energy Partnership demands equal monetary contribution by both sides. The partnership also endorses the affiliation of related organizations in many sectors, ranging from governmental, to educational, to private businesses.

Capitalization of each nation’s competitive advantages

Likewise, a formal partnership between the United States and China can capitalize on their unique competitive advantages and accelerate the widespread adoption of the Internet of Things. This agreement could sponsor businesses relationships between software and hardware developers, research agreements between leading institutions, and increase funding bilaterally in an effort to promulgate the development and implementation of IoT technologies.

By leveraging the core competencies of the other, the two superpowers could accelerate adoption of IoT, improving productivity, driving down prices of consumer goods, and bringing opportunity to the world’s poor by providing them with heightened economic freedom.

A positive bridge to the long-term future

Photo from v.china.com.cn

The immediate benefits of a formal partnership will have great impacts on both Chinese and American businesses, as well as on the world’s poor. The partnership would also promote further cooperation between the two superpowers.

The first step towards facilitating collaboration between China and the U.S in the long term is to work together on projects where the two share a central goal. In this case, both parties would be able to reap the benefits of a business opportunity with globally advantageous externalities. These would concurrently bolster a precedent for cooperation across the Atlantic.

This relationship between China and the U.S. would stimulate further partnerships between the two countries. This includes the evolution of a powerful alliance capable of resolving many of the world’s most complex issues.

Thoughts?

What do you think about the Internet of Things? What are some other ways that can possibly strengthen U.S.-Chinese relations? We would love to hear your thoughts! Please leave your comments below.

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