The Internet of Things (IoT) is a web-enabled sensor network that connects and exchanges data between computers, mechanical and digital devices, objects, vehicles, buildings, animals, and people using machine-to-machine (M2M) communication. Without human input or intervention, IoT can share information and then potentially act upon it, making the technology a valuable component of many common products, including the Amazon Echo smart home, Fitbit wearables, and the Google self-driving car.

Smart homes utilise IoT to automatically monitor and adjust thermostats, appliances, lights, and electronic devices. Wearables record and analyse human metrics for health or public safety reasons. Self-driving cars employ a variety of sensors, such as a lazer, radar, video, and GPS, to safely navigate roads without human drivers.

In addition to consumer products, IoT has business applications. In agriculture, for example, smart devices can track weather and soil conditions and manage irrigation systems. IoT technology can also improve supply-chain efficiency and optimise factory output, inventory systems, and transportation logistics.

With 23 billion connected devices, IoT products are more prevalent now than ever. The global market for this technology was valued at approximately $235 billion USD in 2017 and is projected to increase to $520 billion USD by 2021. In Southeast Asia, however, the IoT market still has a long way to go. In 2015, it was worth about $1.7 billion USD, as the adoption of the technology has only begun in recent years.

Is Southeast Asia ready for IoT?

As is the case with many industries, Singapore is leading the region in IoT technology. Smart Nation is a government plan to transform the city through technological innovation, including national digital identity, e-payments, and its bundled government services. Building an IoT infrastructure of smart devices and wearables, their Smart Nation Sensor Platform and Smart Urban Mobility programmes seek to reduce waste and increase accessibility for public services and transportation. For example, the government is deploying cameras, environmental sensors, and a connectivity infrastructure throughout highly trafficked neighbourhoods in order to improve security, monitor temperature and humidity, decrease congestion, and broaden the availability of services.

aerial photography of cityscape during night time
Thailand has become a thriving ecosystem for the startup and tech community

Compared to Singapore and other countries in the Association of Southeast Asian Nations (ASEAN), Thailand has lagged behind in improving productivity. Consequently, they are attempting to use IoT to bridge the gap. Thailand 4.0 is an economic model intended to promote economic prosperity, social well-being, human values, and environmental protection. It is focused on productivity gains in five of the country’s relatively mature industries (general automotive, intelligent electronics, advanced agriculture and biotechnology, food processing, and tourism) and the development of five nascent industries (digital, robotics and automation, aviation and logistics, biofuels and biochemicals, and medical hubs).

To support their economic plan, the government announced plans in 2017 to open an Internet of Things Institute. The country is also implementing a Smart Thailand project to bring IoT technology to e-commerce, e-education, e-industry, and e-government. Although the country’s IoT spending was only approximately $60 million USD in 2014, Thailand ranked highest in exploring and implementing IoT solutions among ASEAN countries. The country’s spending is forecasted to grow to $1 billion USD by 2020.

In Malaysia, the government has been highly supportive of IoT measures. In 2015, they announced the National Internet of Things Strategic Roadmap, which would employ IoT technology to increase national income by $11 billion USD and create 14,000 highly-skilled jobs. In addition, the 2018 national budget included approximately $46 million USD for smart classrooms. Government-backed Malaysia Digital Economy Corporation and local incubators are working to bolster IoT products made in the country. With these combined efforts, the potential economic impact of IoT in Malaysia is projected to rise to $2.3 billion USD by 2020.

Singapore Twin Tower
Malaysia’s iconic city landscape

Other governments in Southeast Asia are beginning to incorporate IoT technology into their policies. In Indonesia, Jakarta, Bandung, and Makassar have smart city initiatives that include lighting solutions and public services accessibility. In Vietnam, the government opened an IoT lab that provides tech startups with free services and resources. Overall, although the Southeast Asian IoT market is still in its infancy, it has immense potential and is predicted to reach $7.5 billion USD by 2020.

The path forward for Southeast Asian IoT

In order for the IoT industry to thrive in Southeast Asia, governments will need to continue supporting adoption through both financial and non-financial means. For example, security ranks as the greatest hurdle to higher adoption rates in Thailand. Whether the threat is hackers, companies that want to illegally use users’ personal data, or breaches in critical public services and utilities, governments will need to enact policies to ensure the security and privacy of IoT infrastructures.

Another regulatory challenge will be to create open standards for IoT providers. In 2014, for instance, Singapore formed a committee to solidify guidelines for IoT architecture, interoperability, security, and data protection. Since then, the country has published four standards for the deployment of sensor networks. Vivian Balakrishnan, Minister-in-charge of the Smart Nation and Digital Government Office and Minister for Foreign Affairs, has also stressed that IoT platforms need to be modular in order for businesses to adapt to rapid technological changes.

IoT providers will need to conform to these governmental standards, as well as adjust their product offerings to fit the specific needs of each Southeast Asian country. Businesses, especially small- and medium-sized enterprises, will also need to begin implementing IoT technologies in small but potentially scalable ways.

Ultimately, IoT in Southeast Asia is not as advanced as the rest of the world. However, the region has demonstrated significant economic growth and technological adoption, especially in recent years. With a supportive ecosystem of government policy, open-standard technology providers, and proactive businesses, the IoT market in Southeast Asia has the ability to make great strides ahead.

Article last updated 4 December 2020