CC BY
41
https://doi.org/10.29013/ESR-20-11.12-72-78
DangMinh Tuan, PhD, CMC Institute of Science and Technologyy
Vietnam Nguyen Xuan Ha, PhD, Hanoi University of Science and Technology,
Vietnam Nguyen Huu Xuyen, PhD, National Institute of Patent and Technology Exploitation, Vietnam E-mail: huuxuyenbk@gmail.com
GERMANY'S POLICIES ON DEVELOPING IOT (INTERNET OF THINGS) TECHNOLOGY MARKET AND LESSONS FOR VIETNAM
Abstract. Developing the internet of things (ioT) technology market will create of an IoT ecosystem, allowing organizations to connect, control, use IoT devices, and to be important implications for the socio-economic development of nations. Vietnam is a developing country with great potential for application IoT technology to serve the formation of technology roadmap, a roadmap for technological innovation in manufacturing industries, contributing to promote economic growth based on science, technology and innovation. With the method of field research and the use of secondary data, the paper will give lessons about Vietnam's IoT technology market development policy on the basis of learning from German experiences. The paper is part of the research results of the topic "Construction technology map and technological innovation roadmap in developing and applying IoT in Vietnam", code: BM.40.DA/19.
Keywords: IoT technology market, IoT development policy.
1. Overview of the IoT market to each other via the Internet, users can control all
According to the International Telecommuni- their objects over the network with just one smart cation Union (ITU, 2015), the IoT is a global in- device. Characteristics of IoT such as: The ability to frastructure for the information society, delivering communicate anytime, anywhere, anytime; the abil-cutting-edge services by connecting both real and ity to locate devices; the device's ability to exchange virtual based on existence of information, its interop- information via the Internet or internal LAN. With erability. Through the exploitation of identity, data the development of IoT, it will allow to connect to collection, processing and communication, IoT sys- everything, monitor everything, control everything, tem provides the services for many different types find everything, and manage everything. of application, and ensuring security and privacy. According to Rand Europe Research Firm From there, the IoT can be considered as a trend of (2016), by 2020 there are an estimated 24 billion technology and a development trend of society. IoT IoT devices in the world. Total investment in the IoT is understood that when everything is connected sector in the coming year 2025 will reach 14 trillion
US dollars. According to Boston Consulting Group (2016), the Internet of Things market will reach 267 billion USD by 2020. The three main users of IOT devices, including governments, businesses and consumers. These market groups are expected to contribute mainly to the IoT market.
- For consumers: 5 billion IoT devices are installed by 2020, consumers spend about 900 million USD on IoT, and forecast capital investment in this market will be 400 million USD to 2020.
- For governments: there will be about 7.7 billion IoT devices installed by 2020, costing about 2.1 billion USD and 4.7 billion USD in investment.
- For the enterprise market: about 11.2 billion devices will be installed by 2020, at a cost of 3 billion USD and 7.6 billion USD for investment.
According to Business Insider Intelligence (2018), by 2020 many basic economic industries will increase investment in the IoT ecosystem with the total investment in IoT solutions estimated at 6 trillion USD. In particular, manufacturing industry will increase investment by 35% in the use of smart sensors.
- Transport industry will have more than 220 million connected cars by 2020. Route-tracking sensors are installed on shipments and shipments to minimize costs, while increasing the efficiency of the network. In addition, IoT robots such as Amazon's Kiva robot help reduce warehousing costs, manpower and cargo damage issues.
- Agriculture sector: An estimated 75 million IoT devices will be sold to the agricultural sector by 2020. These devices mainly senses in the soil to monitor acidity, temperature, and other factors to farmers increase yields.
- Oil & gas and mining Industry: An estimated 5.4 million IoT devices will be used in oil fields by 2020. These devices are mainly Internet-connected sensors used to provide information. In energy sector, energy companies in the world are trying to meet the rapidly growing global energy demand, and to do that effectively, they'll install 1 billion smart metering devices by 2020.
- Insurance industry: The leaders in the insurance sector believe that by 2025, the IoT will revolutionize the insurance industry and 74% plans to invest in IoT development and application.
- Defense industry: estimated that spending on drones will reach US $8.7 billion USD by 2020, and 126,000 military robots will be delivered by 2020.
- Infrastructure industry: estimated that the world's major cities will increase spending on smart IoT systems from 36 billion USD in 2014 to 133 billion USD in 2019. This investment will generate 421 billion in economic value for major cities in the world in 2019.
- Housing sector: By 2030, predict that the majority of home appliances produced and consumed are IoT devices, especially from the competitive dynamics of major manufacturers to connect the devices made by themselves.
- Hotel industry: 31% of large hotels use smart door locks, 33% have smart room control devices, and 15% use alarm devices. Food and beverage industry, estimated that 310 million IoT devices will be used by food service companies by 2020, and most of these devices are electronic signs that connect and collect information in the department store chain stores and fast food.
- Health service industry: estimated 646 million IoT devices will be used in the healthcare industry by 2020. IoT connected medical care devices can collect data, process information automatically.
2. Research method
In order to lessons for Vietnam about the policy of developing the IoT technology market, the research team inherited the researches published in technology market development policy, IoT development policy. At the same time, economic cooperation policies between Germany and Vietnam through the website: https://vietnam.diplo.de/vn-vi/themen/wirtschaft to better understand the situation of cooperation between Germany and Vietnam, as the basis to recommend the suitable solutions for developing Vietnam's IoT market.
To be able to provide authentic lessons for Vietnam on the policy of developing the IoT technology market, the research team exchanged and interviewed some employees and managers in the German research institutions, and universities such as the German Aerospace Center (DLR - Deutsches Zentrum für Luft- und Raumfahrt e.V.), OTH Regensburg University, Technical Darmstadt University.
- Discussing with the DLR about applied research in the field of IoT applications, especially big data research, smart mobile devices, robotics, and Smart, automatic production.
- Interview some lecturers and managers of OTH Regensburg University: This is one of Germany's prestigious universities in science and technology, especially IoT application in the biomedical field. Here, the team surveyed the university's research, training facilities, and co-discussing the collection of data related to building IoT technology application profiles in the medical and environmental fields.
- Surveying and interviewing some lecturers of the Technical Darmstadt University. This is Germany's leading technical university. Here, the research team discussed cooperation on research and collection of data related to the application of IoT technology in the field of mechanics and electronics.
3. Research results
3.1. Policy to promote the development of IoT technology market in Germany
The German government has identified investment opportunities for IoT development as general trend of the world, so there have been changes in science, technology and innovation policies. The technology development strategy in the field of IoT in Germany has established medium-term development directions for IoT R&D and innovation of Germany, including: to consolidate S&T institutions, enhance innovation, and address global challenges to improve people's lives; IoT application strategy will be expanded into a comprehensive interdisciplinary innovation strategy, including technological
and social innovation to accelerate the delivery of results research into enterprises.
According to the OECD (2019), the hightech strategy with IoT has linked the various fields of innovation policy between interstates, universities and public research institutes. Germany also has strong international connections, with important initiatives underway to further enhance the performance of public universities and research institutes. In addition, to accelerate the process of research and application of IoT, Germany has a policy to accelerate the connection between the industrial sector and the scientific research area. IoT initiatives are implemented to enhance and improve collaboration between business and science. In addition to spending up to 2.98% of GDP for R&D and targeting 3% of GDP by 2020, the German government also has many policy solutions to promote the development of the IoT technology market and support business technology innovation, in particular:
- The Government encourages research and development activities in the field of IoT in SMEs and cooperatives through the creation of a favorable institutional environment, along with preferential credit policies. At the same time, it called on organizations, individuals and the Government to share funding for IoT research projects, technology innovation in the fields of business. To promote innovation, the Government provides a non-refundable grant to enterprises' research and development activities, especially projects aimed at creating IoT technologies and advanced technologies.
- Germany has formed many science and technology development funds, these funds operate not for profit. The advantages of these Funds are flexible lending to research and deployment activities in the field of new technology, high-risk IoT technology. The Fund Council is elected by the Fund's members and approved by the Government. Members of the Foundation are scientists, policy makers and representatives of the economic sector.
- The Government creates an institutional environment for technology innovation activities in en-
terprises by issuing policies to develop the technology market, and giving research and implementation organizations autonomy in technology development IoT technology. The research results are widely publicized on the internet, through which businesses can easily research and buy and sell technology products. The government does not play a direct management role, but provides information for the needs of researching and assisting enterprises, especially small and medium enterprises in the application of new technologies and IoT technologies in production.
- In the agricultural sector, the German Government promotes fruit and vegetable processing cooperatives through preferential policies on developing IoT technology in the agricultural sector, considering the cooperative economy as an important part of the national economy, contributing to economic growth and job creation. At the same time, the Government donates up to 70% of the funding for research and development projects of public research institutes, up to 45% of the funding for enterprises to actively research and improve human resources to creating IoT technology for technology innovation.
Box 1: Support policies for IoT research and application
Promoting the development of IoT technology is a priority policy of Germany, the technological foundation of the fourth industrial revolution.They can enable mobile sensors, connect to cloud computing, integrate with embedded technology, smart mobile technology, big data technology. The Government has many policies to support and sponsor universities, science and technology organizations, and enterprises when researching new technologies and IoT technologies. In Germany, a dual strategy has been issued to bring Germany to the forefront of Industry 4.0. This set of strategy includes two strategic belts built on the IoT platform: supplier strategy (Implementing Cyber-Physical Systems - CPS in production), and market strategy (marketing of CPS technology and products).
Source: Synthesis of the research team from worki Darmstadt University
Developing the IoT technology market is of great importance to the development of German universities and research institutes. The German government has established and developed value chains between companies and networks through broad integration. End-to-end digitization of the entire value chain of both the product and related production system, develop and deeply integrate flexible and reconfigurable production systems within businesses. For the supply strategy, the target is necessary to meet the equipment, techniques and technology for Industry 4.0, including robotics technology development; advanced material technology and 3D printing technology; Training experts and high-tech human resources. As for market strategy, it is necessary to conduct industrial standardization activities, including: establishing testing centers and issuing Industry
results at OTH Regensburg University and Technical
4.0 standards, applying technology of industrial 4.0 technology to key industries in the country (DLR, 2020).
In addition, Germany applies a policy of infrastructure assistance to research centers, which is shown in the form of a program, in which centers are funded up to 80% by the State (Federation 50%, State 50%). Regarding the cost of the structure and operation of the center, the state subsidies in the form of a program, in which the centers are funded up to 60% (Federation 75%, State 25%). In addition, Germany considers science and technology human resources an important factor and spends a certain percentage of its annual budget on training, at the same time the Government evaluates the importance of scientific research and develop technology activities to prioritize research in the future.
3.2. Policy to promote the development of the IoT technology market in Vietnam
Promoting the development of IoT technology market is one of the important contents shown in the Prime Minister's Directive 16/CT-TTg dated May 4, 2017 on capacity building approach to Industrial Revolution 4.0. The Ministry of Science and Technology has issued a list of key technologies of Industry 4.0 to implement Content 4, Section 7, Resolution 138/ NQ-CP dated December 31, 2017 of the Government on the Government Conference with province and the Government's regular December meeting (Decision no. 3685/QD-BKHCN dated December 3, 2018 of the Minister of Science and Technology).
In the past time in Vietnam, IoT applications have been researched and developed in the forms of automation such as traffic light control systems, automatic irrigation systems,... The foundation technologies of IoT such as delivery 6th generation network communication protocol, wireless communication, nanotechnology and sensors, storage and cloud computing, big data processing, information security and energy storage have also been achieved. certain results. Big companies in Vietnam have on research, deployment and application of IoT such as VNPT, Vingroup, and there were also many startups with IoT technology formed and initial successes such as Hachi, ArgiMedia, etc.
Regarding policies to support enterprises in the transition and application of IoT, Minister of Science and Technology - Chu Ngoc Anh (MOST, 2019) said about policies to support technology startups, including the National Technology Innovation Fund (NATIF) with the function ofpreferential loans, loan interest support, guarantee for loans, capital support for organizations, individuals and businesses to conduct research, transfer, innovate and perfect the public turmeric. According to the Minister of Information and Communications - Nguyen Manh Hung (MOIC, 2019), Vietnam's biggest advantage in developing IoT is having good telecommunications infrastructure, there are some strong telecom enterprises and capable
investment in national coverage infrastructure. On the platform of connection for IoT, Vietnam's strategy to 2020 basically each household in Vietnam has an optical fiber transmission line, each person has a smart-phone and 5G mobile infrastructure coverage, giving priority to IoT before.
As such, the Government ofVietnam is especially interested in institutional building and promulgating policies for the development of IoT technology. This is clearly shown through the Government's focus on developing information technology infrastructure, prioritizing the development of the digital industry, smart agriculture, smart tourism, smart cities, and promoting the innovative eco-start-up, education reform and vocational training, and training human resources to be able to absorb new production technology trends. In addition, in building policies to develop the IoT technology market, Vietnam also faces certain difficulties such as limited capacity, limited technological level and investment in R & D activities. Low funding for R & D activities accounts for only a very small part ofthe financial resources ofbusinesses. Therefore, developing the IoT market also poses many challenges for businesses and society in terms of developing legal and ethical IoT business models, privacy in data collection because IoT is not only developing in technology, but also must promote upgrading ofmanufactur-ing industries, accelerate the process of national digital transformation and build a smart society.
4. Conclusion
On the basis of the general research on the development of the IoT market and the policies to promote the development of the IoT technology market in Germany, it is possible to draw some reference lessons for Vietnam in the process ofpolicy finalizatio of research, application and IoT development, specifically:
Firstly, creating a favorable environment for IoT technology research and development, proceeding to support businesses in technology innovation and successful digital transformation. In general, Germany has created a favorable legal corridor for IoT technology research and development, technological inno-
vation through programs, projects and action plans by issuing preferential policies, tax incentives, credit through development investment funds, science and technology funds, innovation funds for each object.
Secondly, promote IoT research and support the development of IoT solution providers in Vietnam. Currently, Vietnam has a number of IoT solution providers such as: IoT Technology Services Joint Stock Company - IoT Group, DTT Technology Company, FPT Corporation, Konexy Company, Hachi Company, Rynan Smart Fetilizer Company, Mimosa Technology Company Limited, Microsoft Vietnam Company, Agricheck, etc. The application of IoT technology in general and the application of IoT technology will increase productivity and reduce costs. However, at present, the initial cost to implement an IoT solution is quite high, because there are not many enterprises producing hardware devices, the equipment is mainly imported from Israel, Japan, Germany, Thailand, and Taiwan (China). Therefore, in the coming time, in addition to encouraging the development of IoT technology providers, it is necessary to promote research and application of IoT to advance to master IoT technology in some necessary fields such as agriculture, tourism, education, transportation, smart building.
Thirdly, incentives for technology innovation and invention exploitation in the IoT field for digital transformation in enterprises (Nguyen Huu Xuyen, 2018). Tax, credit, direct support and training policies need to be further supplemented and improved. The State should have separate policies for businesses to invest, apply IoT technology of the fourth industrial revolution to strongly promote investment
in research and technology development, reception and mastering IoT technology, expanding production, contributing to improving the competitiveness of technology products applying IoT in the market.
Fourthly, supporting the training of technological human resources to serve the development of the IoT market, creating a premise for innovation in the enterprise. This is an important factor to support businesses to adopt, adapt and master technology; At the same time, Vietnam needs to focus on key science and technology fields, orient the development of IoT technology in order of priority in each stage with specific industries. From there, encourage businesses to adopt IoT technology through technology transfer from abroad, and support businesses to conduct research and deploy IoT technologies.
Fifthly, to form an ecosystem of innovation and entrepreneurship, which emphasizes the role of the state in creating conditions that support and promote the economic impact of the IoT industry in all sectors. Building the communication network infrastructure with the 5G generation, developing and unifying IoT standards, enhance security, safety and security for the Io T.
In addition to developing the IoT technology market, the State needs to increase investment in technological infrastructure development, and support businesses to improve their endogenous capabilities by encouraging the establishment of research and development departments in the enterprise. At the same time, the Government needs to create an innovative ecosystem to support small and medium enterprises and startups through cooperation with global partners through IoT technology incubators.
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