IoT Report in the Polish Economy

Internet of Things – what is it? Examples of IoT systems

Both in everyday life and in various business sectors, it is not difficult to notice the growing expansion of electronic devices that are increasingly being utilized. This is made possible by ongoing miniaturization and decreasing production costs of these devices. The simultaneous, dynamic development of communication technology has led to the emergence of entirely new platforms and channels for data exchange. The combination of advancements in these areas enables the construction of next-generation IT ecosystems, in which devices communicate with each other without active human involvement.

The technological definition of IoT (short for Internet of Things) explains that it is a network connecting devices, either wired or wirelessly, characterized by autonomous (not requiring human involvement) operation in the areas of acquiring, sharing, processing data, or interacting with the environment under the influence of this data.

Examples of the simplest IoT systems may include sets of webcams, remotely opened door locks, or measuring devices that communicate with control devices via the Internet.

Complex IoT systems can serve, for example, in the construction of intelligent transport systems or systems for optimizing electricity consumption. The future of the Internet of Things is inextricably linked to the development of artificial intelligence (AI), the use of which will allow for faster analysis of data transmitted by electronic devices, as well as more effective utilization of the results of the analysis for purposes indicated by humans.

The report presents specific innovative IoT projects that are currently being prepared or have already been implemented. For example, a parking system is planned in a shopping center in Wrocław, which, through appropriately placed cameras communicating with other devices, can autonomously recognize vehicle license plates. The system will automatically open the barrier leading to the parking lot, and after the parking period ends, it will collect the appropriate fee in a cashless form. A mobile application connected to the system will continuously inform users about the charged fee. An example of an IoT project that has already been implemented is the ability to take advantage of an individual offer for liability and comprehensive insurance. The calculation of the due premium takes into account the safety of the driver's driving style through the analysis of data from measuring devices installed in the phone used for car navigation.

The report forecasts that by 2020, IoT will connect 28 billion devices worldwide. In the coming years, the amount of autonomous traffic, generated in the network by IoT devices without human involvement, will exceed the amount of traffic generated by people. The integration of IoT with commonly used devices, such as streetlights, traffic signs, cars, or clothing, will continue to accelerate.

The above cannot escape the attention of both government administration and business representatives. According to the forecasts presented in the report, 2020 will be a pivotal year for the adaptation of IoT in the economy. This means that domestic entrepreneurs have their last chance to join the technological race for the highest stakes. For example, the authors of the report predict that by 2021, more than half of the economic entities from G20 countries will modernize and open their industrial production control systems to IoT.

IoT Working Group

The Working Group that prepared the report presented by the Ministry of Digital Affairs was established in August 2018. It consists of 80 experts, including representatives of entrepreneurs investing in IoT-related products and services, as well as representatives from sectors of the economy whose further development depends on the implementation of IoT systems. Contributions to the report were also made by individuals representing industry chambers, the scientific community, trade unions and employer associations, as well as social organizations.

The purpose of the Working Group was to analyze the needs of the economy in relation to the application of IoT, identify the main barriers limiting the development of IoT, and formulate recommendations necessary for the proper development of IoT in Poland. The report identified sectors that will be particularly dependent on IoT systems. The authors of the report include the consumer market, the logistics/transport sector, and industry among them.

Separate chapters of the report are entirely devoted to the prospects for the development of IoT in various sectors of the economy, including finance and insurance, the construction of smart homes, healthcare, smart metering systems, telecommunications, transport, agriculture, and industry (manufacturing).

Barriers Limiting the Development of IoT

The Working Group identified the fundamental barriers to the development of IoT technology in Poland, including financial, legal, and organizational barriers. The analysis covered both the economy as a whole and obstacles specific to individual sectors.

A common issue affecting all entrepreneurs is the imprecise or inadequate legal framework. The report noted that issues related to IoT have been dispersed across many legal acts without maintaining coherence (including GDPR, the Telecommunications Law, sector-specific regulations concerning confidentiality, and the Act on the National Cybersecurity System). Furthermore, according to the authors of the report, the existing legal provisions regarding the collection, storage, use, and sharing of data limit the development of IoT in Poland, particularly due to the lack of adaptation of current legal regulations concerning intellectual property to the needs arising from the specifics of new technologies.

Another common barrier affecting all sectors of the Polish economy is the lack of targeted and specialized education at higher education institutions. Currently, only a few universities have organized specialized courses related to IoT. According to the authors of the report, this may result in an inability to meet the growing demand for qualified personnel. They indicate that the insufficient number of specialists in the market who possess the relevant competencies in matters related to IoT, such as legal aspects or privacy protection, forces entrepreneurs to take actions under conditions of high business risk or to slowly develop competencies within the enterprise. Due to these difficulties, many businesses abandon innovative projects, focusing on their core activities.

Other barriers include:

• the lack of specifications for IoT solutions for public institutions, which complicates the execution of public procurement for the public sector; the problematic necessity to provide restrictive warranty conditions in public procurement offers was also pointed out, which increases the costs of potential repairs and maintenance, especially in cases of large distances between devices forming the IoT system,
• the absence of a national IoT certification scheme,
• the lack of a registry of prototype solutions, which limits knowledge exchange among market participants,
• issues with ensuring interoperability and openness of IoT systems.

Recommendations of the Working Group on the Internet of Things

The report emphasizes that it is crucial to build and disseminate a financing mechanism for the implementation of innovations, particularly in medium and developing enterprises that would be interested in piloting IoT projects, and in the event of a successful pilot – implementing new technology on a larger scale. Given the business risk of implementing IoT solutions, the recommendations include the necessity of establishing a fund aimed at securing the financial liquidity of entities that produce or implement innovative electronic devices used in IoT systems.

Significant for the development of IoT is ensuring security, which in practice is associated with the need to create appropriate certification procedures, serving as an effective and economical mechanism for confirming the appropriate quality class of IoT devices, as well as their compliance with relevant standards: cybersecurity and mutual communication. The authors of the report indicate that it is essential to establish a national certification body or to assign certification-related tasks to an existing institution. The proposed mechanism should be consistent with the certification mechanism provided for by the GDPR.

Regardless of the above actions, the Working Group mentions the necessity of actively supporting entrepreneurs who provide IoT solutions by public institutions in their recommendations. Such support would include, among others:

• effective technological diplomacy, carried out in cooperation with the business environment,
• promoting collaboration between large organizations and entities that are just entering the market of innovative solutions (start-ups),
• participation in creating a network of cooperation between Polish entrepreneurs and global entities investing in Poland in the development centers of their own IoT products and services.

The last, seventeenth chapter of the report contains specific recommendations regarding the proposed legal changes and the preparation of practical research and development projects. The Working Group pointed out the necessity of inviting the relevant ministries of state administration to undertake a detailed analysis of the proposed legal changes, including, among others, the Telecommunications Law, the Public Procurement Law, the Entrepreneurs' Law, as well as regulations concerning the protection of personal data.

Some of the proposals will require changes to the existing legal regulations, while others may be implemented after developing appropriate guidelines or recommendations (so-called soft law), which will increase the certainty of transactions for participants in the IoT market, which is still in the initial phase of dynamic development.

Summary

The published report should be assessed as a positive outcome of the cooperation between the business environment and the Ministry of Digital Affairs. The document should draw the attention of Polish entrepreneurs to the potential for the development of the Internet of Things and the new opportunities provided by modern technologies. An additional merit of the Working Group's work is the identification of the main barriers to the development of IoT in Poland, as well as proposals for removing the identified obstacles. Further actions undertaken by the public administration in collaboration with business representatives should be closely monitored by all interested parties wishing to join the race for a favorable position in the market of this new sector of the economy.