The Industrial Internet of Things (IIoT) is the application of the Internet of Things (IoT) in the industrial sector. Compared to the sluggish consumer goods market, the industrial application of the IoT now appears likely to materialize more quickly. As the world's largest manufacturing country, China is well-positioned to lead this transformation.

Industrial Internet of Things (IIoT) is experiencing a surge in investment, with the Chinese market potentially providing a key entry point. 

my country's Internet of Things (IoT) development has already established a solid foundation in technology, industry, and applications, and is showing positive growth momentum. According to data from the Ministry of Industry and Information Technology, my country's IoT sales revenue reached over 600 billion yuan in 2014. In recent years, the compound annual growth rate of my country's IoT industry has exceeded 30%, fully demonstrating its strong development momentum. CCID Consulting predicts that by 2020, the overall scale of my country's IoT is expected to exceed 1.8 trillion yuan.

Investment in the Industrial Internet of Things is booming.

Startups are bringing digitalization and the IoT to asset-rich industries such as manufacturing, logistics, mining, oil, utilities, and agriculture. Consequently, IIoT startups have attracted investor attention. For example, in the third quarter of 2016, enterprise IoT platform C3IoT secured $70 million in Series D funding; connected car insurance company Metromile received $50 million from China Pacific Insurance; IoT network security provider BatBlue Networks secured $14 million in Series B funding; and industrial robot manufacturer Clearpath Robotics just completed a $30 million Series B funding round.

The share of IIoT in IoT investment transactions has fluctuated. In 2012, the Industrial Internet of Things (IIoT) accounted for 35% of IoT investment deals, but by 2013, that share had fallen to 26%. Since then, its share has continued to grow. In 2016, the Industrial Internet of Things (IIoT) accounted for 39% of IoT investment deals (as of the third quarter), with 154 of 394 deals related to the IIoT.

The Industrial Internet of Things (IIoT)'s share of IoT investment has been growing. In 2012, the IIoT accounted for only 36% of IoT investment, falling to 26% in 2013, and has continued to grow since then. In 2016, the IIoT accounted for 40% of IoT investment (as of the third quarter).

China Leads the Industrial Internet of Things Boom

The Industrial Internet involves factory machines and industrial products, enabling them to communicate with each other and their surroundings. This market is potentially much larger than the consumer goods market. China, with its millions of factories and billions of machines, manufactures the vast majority of the world's electronics, including the numerous sensors and other electronic devices that will form the backbone of the IIoT. China already has more connected things than any other country, and the number is sure to soar. Furthermore, the government is keen to upgrade its manufacturing base, creating abundant conditions for breakthroughs in industrial IoT applications.

GE, the world's largest industrial company, opened a "Digital Innovation Workshop" in Shanghai in July this year and signed agreements with China Eastern Airlines and China Telecom, establishing a partnership with telecom equipment giant Huawei. GE isn't the only company to see China as a potential hotbed for the Industrial IoT; major technology companies like Siemens, HP, Honeywell, and Cisco are also flocking in.

But Chinese companies have their own plans, hoping to dominate the global market with Chinese "national standards." China Mobile, the world's largest mobile communications company, has established its own Digital Innovation Workshop—the "Cellular IoT Open Laboratory." Local expertise is another advantage for Chinese companies. Sany Group, a manufacturer of construction equipment, began connecting factory floor machines to the internet in 2008 and subsequently began installing sensors on excavators and cranes for real-time monitoring and improved operational efficiency. Huawei, similarly focused on quality and affordability, will enter the field of sensor applications based on Chinese standards.

As the IoT ecosystem matures, demand for Industrial IoT applications is growing, and the development of Industrial IoT in my country is shifting from government-led initiatives to application-driven development. As for the current development status of my country's industrial Internet of Things, there is a big gap compared with developed countries. It is necessary to solve the most basic design and manufacturing capabilities as well as the problem of intelligence. Therefore, the vast majority of enterprises in my country still need to start with the upgrade of some infrastructure.