There are high hopes around the world for IoT, which connects appliances, cars and even factory equipment through the internet. Many are looking to use data collected from these devices to develop new products and services, as well as to power technology like self-driving cars.
More than 50 billion devices are expected to be connected to the internet in 2020. Japan accounts for roughly 40% of the global market for sensors, which is a central component of IoT technology. Japan hopes also to play a leading role in the market for data generated by interconnected devices. While American giants like Google dominate in providing data-based services to retail customers, no efforts have yet been made in Europe or the U.S. to create a larger market that connects multiple exchanges for IoT-related data.
There are various business opportunities associated with this type of data. Companies could develop medical services based on physical data collected through wearable devices, for example. Supermarkets could also streamline their inventory based on the contents of their customers' refrigerators.
Because no one company can effectively collect IoT-generated data on its own, more are looking to purchase additional information from the outside. This could lead to a flood of competing exchanges on the market, which some believe will make it more difficult for companies to find the data they need.
Omron, a Kyoto-based manufacturer of automation equipment, Japan Data Exchange and other companies will launch an exploratory committee this fall toward creating a single market for IoT data. Hitachi, Nippon Telegraph and Telephone, Tepco Power Grid and NS Solutions are considering taking part in the effort as well.
Businesses must first obtain permission from their customers before selling personal information, like e-money payment histories. But there are no clear rules for data collected through the IoT. The committee will discuss this and other issues that must be ironed out before companies can smoothly trade such data.
If businesses can start selling such information, they will have an easier time recouping the costs of installing sensors on public transportation and infrastructure. Many were hesitant to make those investments because they did not think they could make up for those costs on their own. Allowing the trade of data could encourage the greater spread of IoT technology.
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