8th decade of Indian economy is a bystander of transforming economy from villages and raw industries to digitization and IT industry. Augmented computerization and mobility have crafted a nation, where nearly everyone is carrying mobile and having online accounts. Next phase will definitely be to connect all of us in a cloud whether, industrial, commercial or smart living approach. Cleary IoT, M2M, IIoT are most dynamic trend influencing every aspect of Indian lives and hence we can say “IoT will be the driving Digital Economy Growth in India”. This article will elaborate more on Digital Economy of India and influences of IoT. Also, few Industry bodies will join us on this survey.
Digital economy refers to an economy that is based on digital computing technologies. The digital economy is also sometimes called the Internet Economy, the New Economy, or Web Economy. Increasingly, the “digital economy” is intertwined with the traditional economy making a clear delineation harder. The digital economy is the new productivity platform that some experts regard as the third industrial revolution. Digital revolution, also known as ‘The Internet Economy’ or Internet of Everything (IoE), is expected to generate new market growth opportunities, jobs and become the biggest business opportunity of mankind in the next 30 to 40 years. India comprising 15% of the world population, with a growth rate of 7 to 8%, could be the second largest economy by 2030. India’s new leadership considers the digital economy as a major growth enabler. When Prime Minister Narendra Modi strategically listed “Digital India” among the top priorities for the new central government, he delivered a resounding nod to the digital economy’s opportunities. The Department of Electronics & Information Technology of India published Internet of Things policy estimating IoT industry in India grow up to INR 940 billion, by 2020. Focus areas include agriculture, health, water quality, natural disasters, transportation, security, automobile, supply chain management, smart cities, automated metering and monitoring of utilities, waste management, oil and gas. Cisco estimates that all IoE pillars – Internet of things, Internet of people, Internet of data, and Internet of Process for India have a value at stake (VAS) of INR 31.880 trillion (about half a trillion U.S. dollars) for the next ten years. From that INR 7.263 trillion is in the public sector and INR 24.616 trillion is in the private sector during the next decade. The estimated biggest opportunities are connected learning, smart grid, gas monitoring, and travel avoidance. The so-called “Payment” opportunity is listed with VAS of INR 1030 billion and “Connected Learning” is listed with VAS of INR 818 billion. The India opportunities are among two major groups: people/citizens with INR 1447 billion opportunity and cities with INR 5816 billion. Primary benefits of India’s public sector are increased revenue; reduced costs; higher employee productivity; improved safety and security; improved environment; enhanced citizen experience, and better health and well-being. Nearly 40 percent of the global value at stake will have new winners and vendors in the next decade. This major opportunity of the digital economy has the power to change the lives of millions of people of India. It could be an important vehicle for change and it could provide the opportunity for India to dramatically expand its role and influence in the global economy and become a powerhouse of digital innovation.
What Internet of Things (IoT) meant for The Digital Economy
The Internet of Things (IoT) is clearly a massive trend this year, and there has been a flurry of news about this technology after recent big industry events, like Mobile World Congress. Indeed, there isn’t a lack of predictions around this, over the last few months in particular that the IoT will continue to expand, propelled by the ubiquity of user-oriented computing. In the coming year IoT will be replicated both in industrial and in operational contexts, as it will be the focus of digital business products and processes. Embedding technology will participate more deeply into products and our way of life will create touch points for users everywhere, and this will form the foundation of digital businesses in Europe. The IoT will continue to be the biggest trend in the tech industry, and will have the most significant impact on consumers and businesses operating within the Digital Economy in India. The evolution of internet in recent times has led to more devices being connected to each other. In future, these devices are expected to generate majority of the internet traffic. The interaction of these devices with each other and other static non-intelligent objects is termed as “internet of things” (IoT). To ensure such interaction, mobile technology is expected to play a transformational role in the future. M2M is a subset of IoT and refers to machines communicating with the application infrastructure using network resources for purpose of monitoring or control, either of the machine itself or the surrounding environment. Additional services, along with M2M services, which involve physical world to merge with digital world together, form IoT. IoT is fast becoming a reality globally. The use of connected devices and systems to leverage data from a range of physical objects is growing rapidly, transforming societies and economies in many new ways. Technology and services revenue from IoT are expected to expand from US$1.3 trillion in 2013 to US$3.04 trillion in 2020 with a compound annual growth rate of 13%. By the end of the decade, nearly 30 billion connected devices are estimated worldwide, with all regions experiencing growth. The upside represented by IoT remains highly promising — with use cases as diverse as home automation services, logistics tracking, pay-as-you-drive car insurance and much more. Partnerships are a key success factor for these emerging IoT service propositions. Go-to-market approaches for such initiatives remain flexible, with operators considering offering such services either directly to customers or via white-label platforms. Currently, the Indian M2M market is at a nascent stage but offers high growth opportunities. Enterprises have realized the incremental benefits of M2M and have gradually started adopting these solutions. M2M solutions have already started gaining prominence in industries such as utilities, logistics and automotive and are in early deployment stages. Research by NESS (SES) into early adopters reveals that there is an average of 7.5 devices connected to the Internet in one household compared with an average of one device per household ten years ago. Devices are now connected in a variety of different, more interesting ways including: 25% via a smart watch, 9% to the TV, 15% to a games console, 1% to a vacuum cleaner and 6% to the washing machine. Despite the fact that IoT is recognized as the biggest trend to come, privacy is a big area for concern around all of these connected devices. 80% worry about it, yet only 23% take high-level precautions. Gartner, Inc. forecasts that 6.4 billion connected things will be in use worldwide in 2016, up 30 percent from 2015, and will reach 20.8 billion by 2020. In 2016, 5.5 million new things will get connected every day. Gartner estimates that the Internet of Things (IoT) will support total services spending of $235 billion in 2016, up 22 percent from 2015. Services are dominated by the professional category (in which businesses contract with external providers in order to design, install and operate IoT systems), however connectivity services (through communications service providers) and consumer services will grow at a faster pace. “IoT services are the real driver of value in IoT, and increasing attention is being focused on new services by end-user organizations and vendors,” said Jim Tully, vice president and distinguished analyst at Gartner. Aside from connected cars, consumer uses will continue to account for the greatest number of connected things, while enterprise will account for the largest spending. 4 billion connected things will be in use in the consumer sector in 2016, and will reach 13.5 billion in 2020.
IoT to birth a $200-billion digital economy
It took 10 years for India to get her first 10 million users and another decade to hit the first 100 million. Then, the pace quickened. The next 100 million users came in three years between 2010 and 2013, and the third 100 million took only 18 months. Internet users crossed 300 million in December 2013. The athlete has hit his full stride now. We are adding five million new users a month and that should take the user base to 500 million by 2018-19, says Rajan Anandan, managing director, Google India. A digital population of 500 million could transform India’s economy, business landscape, governance and society beyond recognition. First, internet growth could spawn an economy worth $200 billion from internet related activities, according to Boston Consulting Group (BCG). This is a four-fold increase from where we are today and the growth will come in just three years. Says Alpesh Shah, partner BCG: Every second Indian will be an internet user by 2018. The biggest growth will come in e-commerce, which will expand almost five-fold, while education and healthcare via mobile internet will expand internet use. Second, it could catalyze entrepreneurship and wealth creation. Global investors are already chasing Indian startups. Former Skype chief operating officer, Michael Jackson, is looking to invest in internet startups in India through his $300 million venture fund Mangrove. I’m bullish on India’s internet economy. With 500 million users it will be the size of Europe. There are challenges like low bandwidth, but that won’t prevent the upcoming internet tsunami, says Jackson partner, Mangrove Capital Partners. Third, internet growth will also lead to massive job creation. About 4 lakh people now find direct employment because of the internet. This will expand to 20 lakh by 2020, BCG estimates. India’s internet economy could eventually create 65 million jobs and increase per capita income by 29% as more people come online, according to a Deloitte Consulting report titled ‘Value of Connectivity. Connectivity will impact businesses and improve socioeconomic indicators. Fourth, governance will improve, with or without politicians. E-governance transactions increased from 0.5 billion to 1.7 billion between 2013 and 2014, according to etaal.gov.in, which tracks internet transactions. Most expect India will have 500 million people online by 2018. Industry experts expect as many internet users by 2018. BCG is more bullish, with a target of 583 million users by 2018, almost all of them mobile internet users. While studies make for a rosy outlook with promises of eliminating poverty as the internet economy expands, there is a lot to consider. At 300 million users, most of the English-speaking population is already covered. The next wave of growth will have to come from vernacular users. Internet access is expensive, and out of reach for most such users. Quality of connectivity could pose a challenge to access bandwidth-heavy apps in healthcare and education or even watching movies and shopping. As expected companies will also be the world’s largest narrow band country as most people can’t afford broadband data plans. With 300 million users we have covered India, but Bharat is yet to get connected. Growth could plateau unless public, free Wi-Fi happens in sync. Not getting them online, leading internet thinkers believe, will be as much a loss to those that are online. To continue connecting the world, we have to connect India. More than a billion people in India don’t have access to the internet. That means they can’t enjoy the opportunities many of us take for granted, and the entire world is robbed of their ideas and creativity.
Internet of Things: Automating the Industrial Economy
Fully leveraging low-cost, low-energy sensors and devices that make up the Internet of Things can help unlock savings in terms of power consumption and total system cost. IoT enables sensors and end devices to directly communicate with enterprise infrastructure to provide in-context data awareness around system functionality. IoT technology is helping manufacturers sell more products, and bundle additional services with each sale thanks to enhanced business analytics. The end-to-end control and insight delivered by IoT to all levels of industrial processes can greatly expand the industrial economy. Intelligent devices, ubiquitous Internet connectivity and growing IT infrastructure are combining to uncover and drive new business opportunities. As manufacturers increasingly automate their processes and machines, they become an important and growing segment of the Internet of Things (IoT). This term is used to define a system in which the Internet is connected to the real world via ubiquitous sensors and devices. The vision of IoT is to integrate diverse sets of data from physical sensors and the rest of IT to enable analytics that can anticipate events, issues and other needs. As a result, the system as a whole can have a view of what’s taking place at any location and point in time. This leads to a set of connected systems that could greatly reduce waste, lower costs, and eliminate loss for just about any human-machine or machine-machine activity. Deploying a smarter manufacturing infrastructure based on IoT methods allows businesses to build and maintain a wealth of knowledge across manufacturing, control and business processes. For example, immediate access to plant-wide information provides factory managers with enhanced environmental condition monitoring capabilities. At the same time, readily available asset information can optimize factory production performance and process control to help managers gain a competitive edge in market production. All the while, real-time data—used as part of a feedback loop—can be used to improve quality, drive out inefficiencies, and ensure human safety at all levels. A timeline of innovations in industrial processes shows an increase in productivity and quality with each milestone. We’re now moving through Industry 4.0, the automated industrial economy, where IoT is helping to increase efficiencies through deep insight, reduce system failures with predicative analytics, drive new business through discovery, and cut costs by uncovering waste. At the intersection of today’s industrial automation requirements and the rapidly emerging IoT technology wave, no other platform today is better positioned to enable an end-to-end automated industrial economy strategy than Oracle Java Embedded. Given its ability to run on a wide range of devices, from mobile and embedded systems with limited CPU and memory, to servers with immense power and capacity, Java is meant to power a world of compute resources with ubiquitous connectivity. Java-powered devices in this ecosystem will communicate with each other and with people via sensors and controllers, gathering data and ultimately being able to understand and control events in real time.
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The automation of industrial processes involves industrial control systems, which usually include supervisory control and data acquisition (SCADA) systems, or other distributed control systems (DCS). They communicate over secure channels to computers controlling remote equipment that can be distributed geographically. A typical SCADA system integrates a sensor tier to acquire data from physical machines and other components; a control tier with industrial controllers to interact with the machinery and sensors; and a supervisor tier with human-machine interface (HMI) systems to monitor and control the entire automated process. According to research by Berg Insight, both the number of devices and the amount of data collected is increasing end-to-end in industrial automation systems. This is driving the need for additional control and management systems for these devices, as well as new analytics to find hidden value in the data collected. Ten years ago there was a marked difference in the cost of technologies used in industrial controllers. But with the commoditization of processors, memory, embedded software, and communications, the cost differential has become insignificant for new offerings from all vendors. Still, the traditional processes used within many manufacturing organizations to enable bespoke, customized applications don’t scale efficiently.
IoT Speeding Ahead On Digital Economy Highway
Key priorities for realizing a “Digital Bharat”
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The draft IoT policy by DeitY aims to create a US$15 billion IoT industry by 2020
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Wireless access accounts for 92.6% of India’s internet subscribers
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DeitY has formed a joint task force with an aim to produce 500 million handsets by 2019
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Total operator outlay in March 2015 spectrum auction: INR1,099 billion
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83% of India’s current demand for handsets met via imports
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In FY14, India telecoms debt stood at INR2,500 billion, higher than industry gross revenue of INR2,339 billion
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The sale of mobile handsets to cross 300 million by the end of 2015
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Government intends to build 100 smart cities in India, with investment of INR480 billion over the next five years
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India ranks 125th in the world in terms of fixed broadband penetration
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18MHz, the average operator spectrum holding in India is amongst the lowest globally
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INR1,130 billion, the approximate outlay for Digital India program
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The Twelfth Five Year Plan projects investments of around INR94 billion in the telecom sector
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Export of mobile handset from India expected to fall to zero in 2015
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Job creation by Digital India: 17 million direct and at least 85 million indirect
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USOF contains INR356 billion in unutilized accumulated funds
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150,000 additional towers required to provide pervasive mobile connectivity and bridge availability gaps
Mr. MN Vidyashankar, President, IESA
IoT will transform companies and countries, opening up a new era of economic growth and competitiveness.
Connected devices made possible by IoT represent a trend that is expected to completely change the way we live and work. IT, technology companies, start-ups and academia in India have played a significant role in driving digital innovation, and we see a future where the intersection of people, data and intelligent machines will have a far-reaching impact on productivity, efficiency and operations of industries in India along with the lives of her people.
There is a wave of optimism pervading in India at present with government impetus for schemes like ‘Digital India’, ‘Smart Cities’ and ‘Make in India’ along with an ever growing start-up ecosystem. The internet of things, IoT, has ceased to be a vision and is very much a reality, and the future is going to see greater innovation in the IoT space which will drive the digital economy innovation. Digitization, disruptive technologies and innovation will surely fuel growth with new opportunities in the years ahead. IoT envisions the entire physical world as a type of information system, through sensors and actuators embedded in physical objects and linked through wired and wireless networks via the internet protocol. Devices will communicate not only via the internet but also directly through the cloud. This will enable collecting data from physical things and applying actions in the real world. Connected devices made possible by IoT are here to stay, and IoT presents enormous opportunities across industry sectors and processes. The industrial Internet of Things, better known as Industry 4.0, has been heralded as the most efficient way to improve operational efficiency. In addition, companies will benefit immensely by seeing it as a tool for finding unexpected opportunities for growth. The future will see successful companies use industrial IoT to expand through boosting revenues by increasing production and creating new hybrid business models plus exploiting intelligent technologies to fuel innovation and transform their workforce. The potential to improve productivity and the supply chain is vast using cyber-physical systems. The Internet of Things has already set in motion the idea of a fourth industrial revolution, a new wave of technological changes that will decentralize production control and trigger a paradigm shift in manufacturing. Consider processes that govern themselves, where smart products can take corrective action to avoid damages and where individual parts are automatically replenished. The world of production is certain to become more and more networked until everything is interlinked with everything else, and logistics might lead this shift. Logistics companies and manufacturers in the automotive space are implementing IoT concepts to create automated and seamless transactions. We are already entering the era of the connected car, and by the end of the decade, the connected car will go one step further into smart communication solutions with car-to-infrastructure and car-to-car communication as part of traffic management and crash avoidance. The ability of machines to communicate with each other using IoT will usher in a new world order, increasing the interconnectivity between objects and devices. By 2020, the expectation is approximately 30 billion connected devices with a corresponding increase in connected devices per family. The efficient and optimal use of cloud computing and big data will simplify the complex monitoring and managing of communication devices, thereby improving interconnectivity. The adoption rate of IoT and machine-to-machine communications is tremendous in the fields of supply chain, retail, healthcare, residential and commercial buildings and transportation. The scenarios include identification and tracking, monitoring, integration control, business analysis, early response, efficient processes and service. Specific examples include healthcare (increase in remote patient monitoring services), agriculture (accumulation of soil analysis with environmental data and satellite), physical retail (ecommerce commerce connectivity across the manufacturer, logistic, retail, and consumer demand), and public safety and defence (help via sensor and monitoring of data). Today, smart grid, smart homes, smart water networks, intelligent transportation are infrastructure systems that connect our world in more ways than we ever imagined. IoT can help government build smarter cities in multiple ways. One method is through optimizing services related to transportation, such as traffic management, parking, and transit systems. Intelligent IoT enabled transportation systems improve capacity, enhance travel experiences and make moving anything safer, efficient and secure. The local police, emergency services and other government services can use these sensor networks with smart traffic management to gain citywide visibility to help alleviate congestion and rapidly respond to incidents.
Mr. Guru Ganesan, President, ARM India
India is eyeing a share of 5-6% in $300 billion global internet of things (IoT) industry in the next five years. According to Gartner, by 2020, Internetconnected devices are expected to number 26 billion. Worldwide, as the adoption and interest in IoT devices grows, Indian businesses too are at an early stage of realizing the full potential of IoT. The term “Internet of Things” was first coined to describe a setup where a computer is able to collect data or provide a service in the physical world via sensors, without any human intervention. ATMs are thus often considered some of the first IoT objects and they went online in 1974. So, if we broaden our look at this definition, it leads us to the conclusion that the Internet of Things is already all around us. From wearable to drones, anything which is connected and able to provide or sense data is part of this operational space. Owing to this idea, we perhaps will not encounter a sudden ‘IoT has arrived’ kind of moment. What we will instead witness, is a gradual growth of connected devices in all spheres and in all form factors. Based on the adoption in the world so far and the general acceptance of IoT there are two notes worthy trends which stand out. One, is the adoption of secure, inter-operable IoT platforms built on open standards. As IoT gets deployed many early adopters could look at piecemeal projects from various solution providers. These solutions may or may not allow for scalability, inter-operability and be able to provide a high level of security. Several of these providers could also rely on proprietary, closed standards for communication protocols which could make scalability and security much harder to attain. Unlike in the PC era, security in IoT cannot be an afterthought. It needs to be baked into it, right from the hardware/SoC level using technologies like Trustzone, into communication via protocols like TLS, and all the way to the server where the data can reside securely. This is where industry partnerships like mbed.com will gain momentum. These IoT device platforms bring together several companies ranging from embedded and cloud companies, component manufacturers, system integrators to OEMs as partners – all of who work together towards openness, standards, technology and services needed to accelerate innovation in IoT systems. Such industry partnerships ensure unparalleled inter-operability, scalability, management and trustable security. Second, is the growth of Industrial IoT several large business and small startups are still getting a feel for the size of this market, but many researches indicate that this could be worth trillions of dollars. Industrial IoT is a broad area and encompasses most sectors like power, transportation, logistics etc. IoT in developing economies like India will first gain growth in these areas since the benefits, from both a financial and operational space, are extremely high. Evidently so, some of the sectors which have started exploring IoT in India include manufacturing, transportation, retail, energy & utilities and supply chain & logistic sectors. For countries like India, which have already leapfrogged technologies in the past (Think car phone), Industrial IoT could be a game changer. The traditional route of sensing, communication & monitoring could all now be done at a fraction of the cost and timeline, as compared to what was typically needed in deploying such a setup. This means industries could be operational earlier and would require lower CAPEX and OPEX. IoT modules which can be retrofitted with existing systems will especially find many adopters as it reduces NRE and operational costs further. Examples of using connected devices for addressing cost-intensive industrial problems is all around us. In areas of shipping for example, delivery of even small packages to vessels passing by is high, since any such delivery involves undertaking a trip to or from the shore. The usage of connected drones is already being undertaken here for such deliveries. Solutions like these not only high cost benefits, but also improve turnaround time. Similarly, a few companies in the oil and gas space are also said to be working on improving monitoring for offshore grids and pipelines using IoT enabled pressure and flow sensors. To conclude, in India specifically, with initiatives like Smart Cities, government backed initiatives will probably be the first to open up early opportunities in this space. For example a trustworthy and secure ‘Smart Grid’ for monitoring transmission, distribution and regulation can reduce personnel costs, while also letting cities manage supply and demand. Similarly, the ‘Smart Water’ project can monitor quality and supply of drinking water across the city and help agencies deliver targeted solutions. What is for certain is that with its large pool of developers and talent, India will be able to be a crucial part of IoT’s growth.
Summary
Indian economy is going Digitalize and soon will be driven by technologies like, cloud computing, mobility, Internet of Things (IoT), social and big data. This tech will drive growth in the information technology-business process management (IT-BPM) industry. Forecasts for the fiscal year 2015-2016 for India show lowered growth expected in IT-BPM with revenues projected at US $143 billion. Yet, this could reach US $350 billion by 2025 due to new business models based on changing digital technologies. The value of digital technologies which estimates that they contributed 14 percent to total revenues of leading IT companies in 2015-2016. Further, a digitally skilled labor pool of more than 250,000 workers has been added to the IT-BPM sector. Digital mergers and acquisitions (M&As) jumped in volume and value by three times the previous year – crossing the US $2 billion mark in 2015-2016. Finally, India has become the third-largest start-up base in the world, home to over 4200 start-ups, aided by 150 plus venture capital and private equity firms, and more than 110 incubators and accelerators. Presently, the IT-BPM sector accounts for 9.3 percent share of India’s GDP, 45 percent of total services exports, and US $7 billion in foreign direct investments (FDI). The sector is also the largest private sector employer – 3.7 million jobs and 10 million indirectly employed.
