IoT Developer Ecosystem Insight: Why Developers in Asia-Pacific and Western Europe Outnumber Those in North America

The IoT developer ecosystem has continued to expand as more organizations have begun to seek opportunities and efficiencies from connected products and services. Building a connected product is a difficult task due to the myriad of technical disciplines required to create an end-to-end solution, from electrical and mechanical engineering to computer science and product design. There has been no shortage though of advanced development kits, software platforms, and other technical tools that have lowered the barriers to entry. At the end of October 2016, Microchip Technology launched the first Federal Communications Commission-certified radio frequency transceiver and IoT developer kit, while Silicon Labs introduced a complete sensor-to-cloud development kit providing the hardware and software developers need to create IoT sensors. These join older development kits such as Intel’s Galileo and relayr’s WunderBar that have significantly enabled the Internet of Things. 

While these development kits are crucial at expanding the IoT developer ecosystem, there are other macro factors such as differing levels of corporate and government investment that are driving regional differences in IoT developer ecosystem growth. ABI Research forecasts that there will be 2.69 million IoT developers by the end of 2016, with 29% from Western Europe, 28% from Asia-Pacific, and 25% from North America. In 2018, the number of IoT developers in the Asia-Pacific region will surpass the number of developers in Western Europe, with North America still behind.

Germany’s “Industry 4.0” plan, adopted in 2013 is focused on using intelligent manufacturing processes in production. China’s “Made in China 2025” initiative was launched in a similar vein but is more broadly focused on including more sectors than just manufacturing. As early as 2010, Beijing had a national IoT center in order to conserve resources and drive efficiencies. More than 500 cities in China have smart city initiatives, and total investment over the next ten years will be approximately US$300 billion. Additionally, Chinese telecom companies such as Baidu, Alibaba, and Tencent have invested strongly in M2M connections, connected vehicles, and the smart home sector. These initiatives are part of a top-down technological conversion and have continued to drive the need for more IoT developers. 

While the US government spent US$8.8 billion in 2015 and has launched a number of projects, adoption outside of the defense has remained low. The value propositions behind these public sector IoT investments are clear, such as increased employee productivity, reduction in costs, and new revenue generation opportunities. Despite these benefits, the United States has lagged behind the rest of the world in the effectiveness of its federal investments. The United States Senate passed the Developing Innovation and Growing the Internet of Things (DIGIT) Act in April 2016, which seeks to establish a working group tasked with identifying proposals to drive IoT growth. The European Union had its own IoT Expert Group from 2010-2012 and released its conclusions in 2013.

IoT investment in the US is a bit more sporadic with no clear top-down goals. The lack of initiative from the US federal government stems from a desire to let IoT develop freely and openly, while not imposing any laws or regulations that would inhibit the natural growth of the market or stifle innovation. This has allowed other regions to take the reins and caused the US to fall behind. The US House Energy and Commerce Committee created a bipartisan working group to examine the IoT in May 2016, with a report to summarizing its activities to be released by the middle of July 2017. Rep. Peter Welch (D-VT), one of the working group’s creators, stated that “[a]s devices become increasingly interconnected, it’s important that policymakers get up to speed on this emerging technology, so that federal policy encourages innovation and consumer benefits, while protecting privacy and security.” This group is a step in the right direction for the US government, but more steps like it are needed to catch up.