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In      Congressional Research Service
    hfIio rg the leg slative debate since 1914



Internet of Things (ToT): An Introduction


The Internet of Things (IoT) is a system of interrelated
devices that are connected to a network and/or to each
other, exchanging data without necessarily requiring
human-to-machine interaction. In other words, IoT is a
collection of electronic devices that can share information
among themselves. Examples include smart factories, smart
home devices, medical monitoring devices, wearable fitness
trackers, smart city infrastructures, and vehicular
telematics. Potential issues for Congress include regulation,
digital privacy, and data security as discussed below.

loT Characteristics
IoT devices are often called smart devices because they
have sensors and complex data analysis programs
(analytics). IoT devices collect data using sensors and offer
services to the user based on the analyses of the data and
according to user-defined parameters. For example, a smart
refrigerator uses sensors (e.g., cameras) to inventory stored
items and can alert the user when items run low based on
image recognition analyses. Sophisticated IoT devices can
learn by recognizing patterns in user preferences and
historical use data. An IoT device can become smarter as
its program adjusts to improve its prediction capability so
as to enhance user experiences or utility.

IoT devices are connected to the internet: directly; through
another IoT device; or both. Network connections are used
for sharing information and interacting with users. The IoT
creates linkages and connections between physical devices
by incorporating software applications. IoT devices can
enable users to access information or control devices from
anywhere using a variety of internet-connected devices. For
example, a smart doorbell and lock may allow a user to see
and interact with the person at the door and unlock the door
from anywhere using a smartphone.

loT Categories
IoT devices are used in different fields for a broad range of
functions. This section describes select IoT categories of
frequent congressional interest.

Industrial Internet of Things (HoT): The manufacturing
industry has begun to adopt commercial IoT applications.
Referred to as industrial Internet of Things (IoT),
networked machines in a production facility can
communicate and share information with a goal of
improving efficiency, productivity, and performance. The
application of IoT can vary significantly, from detecting
corrosion inside a refinery pipe to providing real-time
production data. Currently in North America, there are more
consumer IoT connections than IoT connections, but this
may change in the future. IoT has the potential to
transform a variety of industries, including manufacturing,
chemicals, food and beverage, automotive, and steel. The


incorporation of IoT and analytics is viewed by experts as
the Fourth Industrial Revolution, or 41R.

Internet of Medical Things (IoMT): The healthcare field
has begun incorporating IoT, creating the Internet of
Medical Things (IoMT). These devices, such as heart
monitors and pace makers, collect and send patient health
statistics over various networks to healthcare providers for
monitoring, analysis, and remote configuration. In 2018,
over 400 million IoMT devices were connected worldwide,
according to the market data company Statista. At a
personal health level, wearable IoT devices, such as fitness
trackers and smart watches, can track a user's physical
activities, basic vitals, and sleeping patterns. According to
one estimate, over 40 million fitness trackers IoT were in
use in the United States in 2017.

Smart Cities: IoT devices and systems in utilities,
transportation, and infrastructure sectors may be grouped
under the category of smart city. Utilities can use IoT to
create smart grids and meters for electricity, water, and
gas where sensors collect and share customer usage data to
enable the central control system to optimize production
and distribution to meet demand in real-time. Cities can use
transportation IoT for fare readers and status trackers or
locaters that interface across all public transportation
platforms. Columbus, Ohio's winning proposal for the
Department of Transportation's Smart City Challenge of
2016 incorporated connected infrastructure that interacts
with vehicles (including electric autonomous vehicles and
shuttles) as well as a common payment and trip planning
system across multiple transit systems.

Smart Homes: Consumer product IoT devices used in
homes and buildings are often grouped under the smart
home category, including smart appliances, smart TV,
smart entertainment systems, smart thermostats, and
network-connected light bulbs, outlets, door locks, door
bells, and home security systems. These smart-home IoT
devices can be connected to a single network and controlled
remotely over the internet.

loT Revenues
The IoT industry is a growing market both in the United
States and globally. Statista estimated that there were over
700 million consumer IoT devices in use in 2017 in the
United States and the 2018 U.S. IoT retail consumer market
was worth almost $4 billion. Figure 1 illustrates global IoT
revenue from 2012 to 2018 (except 2016). Statista reported
the total global IoT revenue in 2018 was about $93.9
billion. The connected smart cities category was the largest
portion of 2018 global IoT revenue (41%). The IoT had the
biggest growth in terms of global revenue between 2017
and 2018 among the different categories and accounted for


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June 4, 2019

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