6 June 2017
IoT Transforming Russia's Management and Administrative Processes
While many IoT applications in Russia conform to global norms, a number are addressing particularly local problems.
In line with international trends, the Internet of Things (IoT) has been growing exponentially in Russia in the past three years. Although many of the dynamics and trends follow global norms, a number of local variations have also emerged.
Overall, the rise of IoT in Russia is expected to do far more than just boost the general economy and high-tech industries. It is also expected to transform management and administrative processes, areas that have always proved problematic in terms of the country's social and technological development.
It is widely assumed that IoT will result in the creation of entirely new automation tools, as well as ushering in the adoption of a wide range of analysis and correction processes. Properly applied, these will minimise the level of subjective human input in both the business and government sectors to the point where truly objective judgments can be made in accordance with proven algorithms and a methodology based on big-data analysis and machine learning. This has been borne out by Russia's Safe Cities, a recent government programme where all the parameters and analysis were managed automatically.
There are about 20 million IoT-enabled devices in Russia. By 2020, this figure is expected to rise to 500 million items, not including those in use in the Eurasian Economic Union, which relies heavily on Russia's IT infrastructure. In the same year, IoT is expected to have reached a critical mass within both the governmental sector and the wider Russian economy.
As a sign of its growing significance, discussion of IoT is no longer restricted to geeks and the high-tech sector. With the advance of intelligent refrigerators and tooth-brushes, smart homes, remotely managed heating systems for dachas and home-security systems, the concept is now well-established in the mainstream. In the case of the business sector, the data provided by this growing number of devices is huge, with subsequent analysis providing unprecedented feedback to manufacturers, designers and distributors with regard to consumer preferences and behaviour.
One of the areas where IoT is making the most conspicuous change is in the automotive sector. Just a few years ago, only premium cars came with an internet connection as standard. Now, though, all cars sold in Russia come equipped with the ERA-Glonass Global Positioning System. Developed in Russia and operated via a network of the country's satellites, it has proved a popular domestic alternative to the systems managed by US companies. It has also scored highly in the price stakes, with the cost of retro-fitting cars not originally destined for the Russian market coming in as low as US$200.
In terms of industrial applications, IoT is now routinely used in a wide variety of sectors across Russia, including power generation, urban-utilities management, aviation, government and agriculture. Its uptake has been driven by both ease of use and cost savings, with its adoption making maintenance far cheaper and easier, allowing new production equipment, power generators and faulty production line components to be easily identified and replaced. As a result, many Russian businesses, including metallurgical companies, automotive firms and airlines, already rely on IoT and are committed to spending heavily on its future development.
With IoT-compatibility becoming ever more affordable, clear opportunities are emerging for Hong Kong-based manufacturers and suppliers in the consumer-electronics sector. These oppoprtunties will be further boosted by the growth of cross-border e-commerce and the long-term erosion of trade barriers.
Leonid Orlov, Moscow Consultant