The Asia-Pacific region has long been a strong manufacturing base and the sector continues to be a strong adopter of the Internet of Things (IoT). But as the latest Microsoft IoT Signals report shows, IoT is now much more widely adopted across verticals, and across the globe, with smart spaces—a key focus for many markets in the Asia-Pacific region—becoming one of the leading application areas.

The newest edition of this report provides encouraging reading for organizations in the Asia-Pacific region. The global study of over 3,000 business decision-makers (BDMs), developers, and internet technology decision-makers (ITDMs) across ten countries—including Australia, China, and Japan—shows that IoT continues to be widely adopted for a range of uses and is seen as critical to business success by a large majority. Further, rather than slowing growth which some might have feared, the COVID-19 pandemic is driving even greater investment across different industries as IoT becomes more tightly integrated with other technologies.

Across the Asia-Pacific region, the research shows that organizations in Australia report the highest rate of IoT adoption at 96 percent—beating both Italy (95 percent) and the United States (94 percent)—and that organizations in China are adopting IoT for more innovative use cases and have the highest rates of implementation against emerging technology strategies. In Japan, it found that companies are using IoT more often to improve productivity and optimize operations. Below we dive into three key trends that emerge for organizations in this region.

1. A greater focus on planning IoT projects pays off

Whilst IoT projects in the region take slightly longer to reach fruition, it seems that this reflects a more thoughtful and diligent approach which appears to be paying off. By thinking through and taking time upfront to determine the primary business objectives for success, organizations in the Asia-Pacific region report high levels of IoT adoption (96 percent in Australia), importance (99 percent of companies in China say IoT is critical to business success), and overall satisfaction (99 percent and 97 percent in China and Australia respectively). These objectives are broadly in line with global findings, with quality assurance and cloud security consistently mentioned across all three countries in this region. Organizations in Australia and Japan adopt IoT to help with optimization and operational efficiencies: in Australia, the focus is on energy optimization (generation, distribution, and usage); and in Japan, it is on manufacturing optimization (agile factory, production optimization, and front-line worker). Those in Australia and China also tend to do more device monitoring as part of IoT-enabled condition-based maintenance practices.

Companies in the region report that these varied use cases are delivering significant benefits in terms of more operational efficiency and staff productivity, improved quality by reducing the chance of human error, and greater yield by increasing production capacity.

2. Emerging technologies accelerate IoT adoption

Of the organizations surveyed, the 88 percent that are set to either increase or maintain their IoT investment in the next year are more likely to incorporate emerging technologies such as AI, edge computing, and digital twins into their IoT solutions. And in the Asia-Pacific region, awareness of these technologies tends to be higher than in other markets.

Organizations in China are far more likely than their counterparts elsewhere to have strategies that address these three areas. They lead all other countries when it comes to implementing against AI and edge computing strategies, and a staggering 98 percent of companies in Australia that are aware of digital twins say they have a specific strategy for that technology. More significantly, their experience with these technologies is driving greater adoption of IoT across the region, with around eight in ten organizations working to incorporate them into their IoT solutions.

3. Industry-specific IoT solutions drive a broader range of benefits

The IoT Signals report analyzed several industries in-depth, all well represented in the Asia-Pacific region. Organizations in Australia, for instance, should note that energy, power, and utility companies use IoT to help with grid automation (44 percent) and maintenance (43 percent), while oil and gas companies tend to apply it more to workplace and employee safety (45 percent and 43 percent respectively). Energy companies are also much more likely to use AI in their IoT solutions than other industries (89 percent of organizations versus 79 percent for all verticals). The benefits of IoT being seen by organizations in these sectors include increases in operational efficiency, increases in production capacity, and increases in customer satisfaction.

In Japan, where manufacturing makes up an important part of the market, we find that there are more IoT projects in the usage stage (26 percent) than in other sectors, mainly focused on bolstering automation. Manufacturing organizations are using these IoT solutions to ensure quality, facilitate industrial automation, and monitor production flow. In doing so, they benefit from improved operational efficiency and greater production capacity, driving competitive advantage. In this industry, it’s not technology that poses a challenge but the huge business transformation that takes extra time and thought, often due to legacy systems and processes.

China, of course, has always been an innovator when it comes to devices, so its manufacturing sector will see the same impacts. But smart spaces—as in other countries in the Asia Pacific region—are getting a lot of attention, and this is where we see the highest levels of IoT adoption (94 percent) and overall satisfaction (98 percent). It also has the strongest indications of future growth with 69 percent planning to use IoT more in the next two years. It’s also the industry sector where the highest proportion of organizations are implementing IoT against AI strategies. The top applications of IoT in smart spaces are around productivity and building safety, where organizations can benefit from improved operational efficiency and personal safety.

Learn more

It’s clear from the report that IoT is here to stay, and the diligent approach taken by organizations across the Asia Pacific region is paying off. For a more detailed exploration of how businesses in this region and across the globe are leveraging IoT, as well as drilldowns into topics such as security, implementation strategy, and sustainability, make sure you download the full Microsoft IoT Signals report.