MDEC sees opportunities in agriculture, manufacturing and transportation
THE concept behind the Internet of Things (IoT), that is, the interface between the Internet and everything else in the physical world, including gadgets, buildings, the environment, vehicles and all the way to cities, is not new.
Researchers have been trying to connect what the Global Standards Initiative defined as “the infrastructure of the information society” since the 1980s. It can also be described as a convergence of various technologies to enable the interactions to happen.
Resulting from this interaction, data is collected and exchanged. The information coming out of this data is valuable and many firms, including technology start-ups, are trying to leverage on it.
Part of what IoT is, is “big data analytics” and, if harnessed properly, means big money for many businesses, especially for those in consumer-related industries.
McKinsey Global Institute says in a report last year that IoT could have a total economic impact of US$4 trillion to US$11 trillion a year by 2025.
Most in Malaysia will not know it, but IoT pervades many areas of life.
For example, inside Nestle Malaysia Bhd ’s headquarters in Petaling Jaya, there is a room with a huge screen covering an entire wall that tracks key words related to the company’s products on the Internet.
The sales force social studio is where Nestle’s Malaysian digital acceleration team, which was set up in early 2014, analyses consumer trends specifically for the company’s social media campaigns and market research.
Michelle Yap, a member of the team, tells StarBizWeek that the tracking of the key words happens on real time. “We’ve conversation clouds for tracking keywords that go around Maggie or KitKat,” she says.
Yap says the company’s recognition of the potential advertising opportunities that comes from big data spurred the formation of the digital acceleration team.
But this is only one aspect of IoT, another is efficiency. The data collected is used to make businesses more efficient and better able to react.
Malaysia Digital Economy Corp (MDEC) chief executive officer Datuk Yasmin Mahmood decribes the impact of IoT thus:
“This fourth industrial revolution is going to impact people’s lives in unimaginable ways and this will happen through the convergence of the cyber and physical worlds”.
MDEC is the Malaysian Government agency tasked with rolling out initiatives supporting the digital economy and the development of the MSC Malaysia initiative, the platform used to nurture local technology firms and attracting investments from local and foreign sources.
Yasmin says the opportunity is going to come from solutions that can be used in farming, factories and transportation.
Given the prevalence of car ownership, several tech start-ups such as Atilze Digital Sdn Bhd, a unit of apparel maker Yen Global Bhd, and Omnimatics Sdn Bhd are concentrating on providing solutions in the transportation space. Both use technology to track vehicle performance.
Atilze chief executive officer Gerard Lim says those using the company’s technology has been able to save fuel costs of up to 30% while those using Omnimatics’s technology, says founder Raj Kissu Rajandran, will be able to save between 30% and 40% of maintenance cost for repairs as the device deployed will alert users on car performance.
The digital economy initiaves will also help support the Malaysian economy’s move up the value chain but Yasmin says a lot of the so-called old-economy firms are struggling to adapt as technology innovations move fast.
The potentialities of IoT aside, funding for tech start-ups remains a challenge, with Raj Kissu hoping for more funding opportunities.
Internet speed and affordability are still issues that plague the adoption of IoT.
“Internet connectivity is important to the digital economy as electricity is important for the industrial economy. It is critical that we quickly get up to the global average Internet speed,” Yasmin points out.
Another area that needs looking into is human capital. Yasmin says the country needs people who can create solutions, the so-called “digital makers”.
Lim believes that IoT will give rise to new players, industries and new jobs.
“There’ll be existing industries that will be disrupted,” he says, adding that those who want to survive can embrace technology and change the way they operate.