Descriptors :
China , Institutions , Internet of Things , Leapfrogging , Smart city , Standardization
Abstract :
This paper seeks to provide some explanation as to how demand-, supply- and institutionsrelated
factors in China have affected the creation and diffusion of Internet of Things (IoT)-
related products and services. Concerning demand side factors the paper demonstrates how
potential market size and existing technology trajectory work in favor of IoT diffusion. As a
related demand side factor the paper argues that, in terms of the technological trajectory, China
has started farther from the frontier than most industrialized countries. The degree of
incremental benefit from the IoT is thus higher in the country. As to the supply side factors,
the article promotes an understanding of how Chinese technology companies have capitalized on
a huge user base to develop IoT-based applications. It also suggests that technologies and
expertise provided by foreign multinationals have also played crucial roles. Regarding formal
institutions, the governmentʹs proactive policies have been a major factor in the IoTʹs evolution.
It is also in the Chinese governmentʹs interest to develop IoT products to make censorship and
surveillance more effective. Regarding informal institutions, Chinese consumers are less
concerned than Westerners about being tracked and monitored, which provides a favorable
condition for the adoption of IoT-enabled devices. Nonetheless, this condition is changing due to
increasing abuse of consumer privacy. China and the U.S. are compared in terms of diffusion,
key determinants, performance indicators and impacts of the IoT in order to understand the
areas that China outperforms—and underperforms—the U.S. Some indicators are proposed to
gauge the IoT-related performance and the impacts of the IoT.
