The connected world is not some distant dream. It’s already here.

The Internet of Things (IoT) is an all-encompassing trend that affects all areas of our lives. Especially for a strong economy like Germany, the IoT offers major business opportunities and a historic opportunity to improve its competitiveness as an industrial location.

Success depends on systemic understanding

Around the world, engineers are developing solutions for the IoT. At present developments are very much driven by technology. But in an area like this, technological know-how and excellent work alone are not enough. We have found that the right systemic understanding is decisive for the IoT.  When developing connected solutions, therefore, Bosch takes three levels into consideration: the first is connected things, which use sensors to collect data and in this way help create a virtual image of the real world. The second is secure software platforms that connect these things with the internet and with each other, that analyze data, and that make new services possible. The third is the applications and services that are developed on the software platforms and create value-added for customers.

Users in focus

In my view, customer focus and customer benefit are critical for successful solutions on the IoT. Any connected solution has to focus constantly on users and their problems, and less on products or technologies. For this reason, a company’s first thought when developing new solutions should always be its customers and their wishes. We have to offer our customers solutions and functions that make their lives safer, more secure, and more convenient. In my view, a consistent user focus is crucial if the connected world is to succeed. Moreover, alliances involving different companies are an important driver of connected solutions. Joint projects and ecosystems need uniform standards and open platforms as a basis, since only then can fully compatible solutions deliver the greatest benefit for customers and consumers. In my opinion, it is precisely this cooperation among companies, even those in different industries, that forms one of Germany’s major strengths. For example, we have to build broad clusters for Industry 4.0 in order to pool expertise, knowledge, and resources.

Collaboration with start-ups and establishment of a venture capital scene

I am concerned that established industries are increasingly being challenged by new providers with clever business ideas. It was for this reason that Bosch set up the IoT Lab with the University of St. Gallen in 2012. On a scientifically sound basis, this joint “think-tank” explores and tries out new business models for the IoT. German industry is still technologically innovative. But to hold its own on the IoT, it also has to create new, innovative business models. One thing that might help here would be if traditional industrial companies were to collaborate more closely with internet start-ups. For their part, internet start-ups need more financial support as they scale their business ideas up to the relevant market size. Europe has waited long enough for a functioning venture capital industry rich in financial resources. If they cannot be assured investment, German or European start-ups will never be as big or successful as their U.S. counterparts.

Single digital market and responsible use of data

I see a further crucial disadvantage for European companies in the extremely fragmented European market, which is the result of differences in data and consumer protection regulations. We need a single digital market in Europe. This will allow us to launch connected solutions just as successfully in our home market as U.S. or Chinese companies can in theirs. In this connection, I call for rapid introduction of the EU’s General Data Protection Regulation. I also want to underscore how important data protection is to society’s widespread acceptance of connected solutions. The IoT can become a reality only if people put their trust and confidence in it. That’s why Bosch is committed to making the handling of customer data extremely transparent. We are completely open about how we use our customers’ data. We will tell our customers what data we want to use for what purpose, and we will ask them for their express permission.

Bosch saw the IoT coming years ago

The Internet of Things is a central element of Bosch’s strategy, and we have been preparing ourselves systematically for it for many years, not least by expanding its own software competence. I will spend today at the Bosch ConnectedWorld conference in Berlin, where presentations and exhibitions are introducing a broad range of solutions from several technology segments and industries as well as the world of Bosch. These show that the connected world is already a reality, and Bosch is actively shaping it. We have left the hype behind us and are now capturing real value from the Internet of Things.

 

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About the author

Volkmar Denner

Volkmar Denner

Volkmar Denner has been chairman of the board of management of Robert Bosch GmbH and a limited partner of Robert Bosch Industrietreuhand KG since July 1, 2012. His corporate responsibilities include Corporate Strategy, Corporate Communications, Senior Executives, and Real Estate and Facilities. He is the chief technical officer, has corporate responsibility for Research and Advance Engineering, Engineering Coordination, and is responsible for Bosch Software Innovations and Healthcare Telemedicine.