offers enormous opportunities.

And the prime minister is very interested in this

and talked about it at the CeBIT fair in Hannover.

And he's asked the Government Office of Science

to prepare a report for the government

really to set out the things that government can do.

Well, it is actually about analysing what

the opportunities of the Internet of Things are,

what the vulnerabilities, what some of the security issues are

around the Internet of Things as well because it offers new

opportunities for people to do both good things and bad things

with the technology.

And it's about coming up with recommendations

as to how government can catalyse

the uptake of the Internet of Things for human benefit

and for the benefit of the economy, which

of course are closely interlinked.

You see this combination of excitement

at technological possibility, but also disappointment

with an earlier vision which one can caricature as a kind

of IBM vision of the smart cities,

Internet of Things panopticon, lots

of really exciting projects on mobile labs, data pooling,

and also around transport and crime,

but I think also a sense of their struggling

to find the applications which really do deliver enough value

either commercially or for citizens.

And at the very least there's a need for much faster learning

about what does or doesn't work and for some evidence

about what does or doesn't work and really does meet needs.

And so we need more rounded notions

of what the Internet of Things can

be, which has at least some place for people in it as well

and some connection to, let's remember,

the starting ethos of the internet itself,

which was a liberating ethos, an ethos

summed up by Tim Berners-Lee at the London Olympics.

This is for everyone.

This is not just something imposed on people from on top.

Well, there's a few questions we should ask,

as I'm sure you're ask all day.

Who's in charge?

There's lots of companies, a couple here--

SmartThings is another one-- trying to be that dashboard.

And nobody's really discussing if there is one Amazon

controlling of the book trade, will there

be one company controlling the network?

We talked about the vulnerability,

but I'd think this is one of our biggest questions

at the moment.

This report on spam emails launched

from the legendary internet fridge and television.

And pretty much anything that's on the network

has vulnerability.

I think there's a lot of challenges for Internet

of Things at the moment in really achieving

the large rollout and therefore the value in scale

that it promises.

Energy is a big one.

You can't change batteries on this huge array of stuff.

It's already enough of a pain changing

batteries on the things you have in your house and so on.

So energy harvesting, I think, is a really interesting space,

and the convergence between energy harvesting on one side

and also lower and lower power radios and processing

and devices on the other side.

That will be interesting where those intersect.

What we think is needed is a simple, low cost sensor

to cloud wide area connectivity technology with features

that look like it very, very long battery life.

You could put this technology in a module

and it can last for maybe up to 20 years,

depending on the duty cycle, on just a couple of AAA batteries.

It's low cost, so no standards essential patent royalties

on it.

It means these module cost has to be around about $3.

That's about two pounds per module.

Small printed antenna, couple of AA batteries, so four pounds,

we're done.

It's in there.

And it would work essentially anywhere.

The first thing that's needed on spectrum,

it has got to be harmonised.

There's no point in every country having

a slightly different use of spectrum.

The cost of the hardware is going

to be ridiculously expensive.

It would be impossible that any consumer electronics companies

would put it in a product and know

that it will work globally.

So harmonisation is essential, really,

for the use of spectrum.

The government's role is to be catalytic.

It is actually to create the policies

in which this new technology can thrive.

And it's about looking to the future and working out how we

maximise the benefit and minimise the risk.

It's about ensuring that the standards are fit for purpose

so that one can get the maximum interoperability.

It's about thinking about the security

issues and the vulnerabilities that

are associated with the Internet of Things.

One of the key things is to establish a clear vision

of what the Internet of Things is all about.

And actually it's about delivering services

more effectively.

It's about using resources more efficiently.

So the opportunities are absolutely extraordinary.

We're talking about the Internet of Things,

but I want to talk about the Web of Things.

So often there's this question of, or a lot of focus

when there's a dialogue about the Internet of Things

on how stuff actually gets connected to the internet,

if you like, the hardware layer of the stack.

But there's a second question, which

is, how do applications connect with things?

Because if we really want to create value from things,

then we need to be concerned about how

the data from those objects connects with applications.

Technologically, our point of view

is that physical things should be as discoverable on the Web

as digital things are today.

Bruce Sterling said, why can't I Google my shoes?

Now to realise that kind of environment,

it means that we need to give physical things the same level

of identity on the Web that digital assets have.

Why can't we mash up my shoes along with my Flickr images?

So the technology behind this is what

we call active digital identities,

but essentially it's web objects representing physical objects.

As everybody here knows, you can design the technology.

And it will stay on the shelf until a second thing happens,

which is you need the right business model to liberate

that technology and get people using it.

And in some cases with Internet of Things,

the business model will be driven by business.

There will be B to B applications

that mean that they can manage their logistics more

effectively and so on and so forth.

And in some cases, there will be consumer-driven interests.

I think wearables will because wearables,

they're a bit anecdotal, but actually most people

will think they're cool and sexy and they'll want wearables.

I think that the consumers will drive that.

And there will be areas where government could drive it.

One of the things that will help drive some of this

is the ability sensibly to monetise data.

Nowhere in the world so far is there

a proper framework that will develop consumer trust in that.

And that will be a huge opportunity for the UK

to lead the world, if we got it right.

We also need to make progress, I think, in data analytics

in order to make, really, sense of all the information

that we can collect.

For example, from the point of view

of sensor, which is of course a very important field for Bosch

as a major producer of sensors in many fields,

the aspect of reducing power consumption of these sensors

is key to making them a useful component

for the Internet of Things.