While the Center for Data Innovation report anticipates that the private sector will be the primary driver of innovation and development in the IoT over time, it notes that there is hesitation among many firms to dive headlong into the field owing to concerns over the risks of not being able to recoup investment in the nascent technology. In that regard, the center is suggesting that the government could position itself as an early adopter, deploying IoT devices and applications in its own facilities and in the sectors where it plays a dominant role, such as defense, transportation and energy.
Castro also sees a role for the government to play in expanding deployment of the infrastructure that supports IoT -- and ensuring universal access to it -- to prevent a new type of digital divide from taking hold.
Part of that policy framework would include additional steps to ensure that sufficient wireless spectrum to support the data exchange among devices is available, acknowledging that for some applications -- say monitoring and reporting soil or crop conditions in rural farm communities -- short-range technology like Wi-Fi would not be a good fit.
Global officials could also help the IoT by moving away from policies that create barriers for data to flow across political borders, a long-simmering complaint among U.S. cloud computing companies.
"Whether you're talking about a smart transportation system or an agricultural business where you're comparing different climate zones, you want to be able to take data from different parts of the world and conduct analysis on it, and that's not possible unless you can move data across borders," Castro says.
Castro envisions a national IoT strategy that would generally hew to "light-touch" regulations, particularly in areas like privacy, where he says overly prescriptive mandates could curb growth. Many of the sensors and other devices that would comprise IoT, he points out, do not have traditional consumer interfaces like websites and mobile apps, where the checkbox, notice-and-consent approach to privacy and data collection is broadly applied.
The young companies that are sprouting up around different facets of IoT can ill afford to navigate a thicket of regulations that would invite a host of new compliance burdens and potentially limit the value of the technology, Castro argues.
"If there's not a concrete harm we see today, let's hold off," he says. "It's really hard to be a startup and also spend all your time in Washington."
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