What the Infrastructure Bill Means for the IoT

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The newly established $1.2 trillion bipartisan infrastructure bill is one of the most consequential pieces of legislation that has passed the House in years. The landmark bill will shape spending on broadband, energy, transportation, water, and more, for years to come.

The legislation comes about as American lawmakers try to deal with a crumbling national framework as well as close the huge gap with China and much of the rest of the developed world. According to a 2019 report from the World Economic Forum, the state of U.S infrastructure is ranked 13th among industrialized nations. Although the country scores high on airport and road connectivity, it slips drastically behind in water and electricity infrastructure.

Much of the focus so far, rightly, has been on the collapsing bridges and decaying water systems that blight many people’s day-to-day lives. It has been more than half a century since a government (of either political stripe) invested heavily in any major infrastructure project on the scale of the Eisenhower Interstate System, and 80-odd years since FDR’s major public works.

[Source: UNPRI.org]

Many depression-era facilities and systems are still operational, but now need to be updated or replaced. McKinsey researchers say that the U.S. will need to spend $150 billion a year between now and 2030 just to keep up with the country’s current infrastructure needs.

A highly visible aspect of the new bill will be the repairing and rebuilding of bridges, roads, and other public structures. In a few years’ time, you will be able to see, hear, and smell the consequences of this work all around you.

There is more going on with the measure, however, such as $65 billion allotted to broadband grants that are aimed at improving Internet access in rural areas, for tribal communities, and for low-income families.

Beyond that, we wondered how much money from the bill will be directed at IoT-related infrastructure. Unsurprisingly, analysts can’t yet say what portion of the trillion dollars will be spent specifically on IoT projects. IDC, however, did comment on which sectors it expects will include IoT as part of larger infrastructure upgrades.

Infrastructure ambitions

“The transportation, manufacturing, utility, and energy sectors are all expected to see funding from the infrastructure bill,” says Sandra Wendelken, senior research analyst of mobile and IoT services at IDC in an email reply to EE Times. “These sectors could implement a broad range of critical technologies, including IoT devices, platforms, and connectivity; high-speed mobile networks; edge and cloud computing; and analytical technologies including AI/ML.”

Smart Ports: A mooring for IoT infrastructure?

ABI Research highlighted ports as an area to watch. The analyst firm predicts that modern IoT-based infrastructure upgrades will help resolve container ship stoppages that have caused the supply chain shortages that are dogging much of the world right now.

“One area that I think is interesting to look at is the ports side specifically,” wrote Tancred Taylor, IoT Research Analyst at ABI Research in a reply to our questions. “There’s a lot of disparity in how well ports are equipped with new technologies, and this is part of the background that has led to the blockages both of the container ships at sea, as well as on the drayage and land-side of port operations.”

“Traditionally, ports haven’t had the resources to upgrade systems, or at least can’t do so without shutting down part of their capacity. The recent crisis is showing that they have been taking on more and more volume over the years without the required upgrades to their infrastructure and systems,” the analyst writes.

“There’s a big role there for real-time transportation visibility providers managing end-to-end freight shipments, with the aim of making use of open APIs (instead of EDI) and IoT infrastructure to say not only what the ETA of a ship is with the container onboard; but also when the container has been unloaded, when it is ready for collection by the drayage provider, where exactly it is to be collected from in the port, etc.,” the analyst continues.

“The management of inbound/outbound deliveries and pickups is one of the big use-cases for real-time visibility software – of which a part can be IoT. Applications will vary a lot; it can be asset tracking devices, it can be other kinds of live feeds to a central digital control tower – which none but the biggest and most advanced ports currently have,” Taylor concludes.

Overall, the Biden administration plans to spend $17 billion on upgrades at coastal and inland ports, and ports of entry along the U.S. border. Initially, several administration sources told CNBC that the port upgrades would start with the U.S. Army Corp of Engineers working on $4 billion worth of improvements. This work is expected to start within 60 days.

It will be interesting to observe how many of these port upgrades will occur over the next 5 or 10 years. The supply chain shortages may well put pressure on civil and government organizations to spend on port improvements to alleviate delays. But we’ll see…

Bullish vendors

IoT vendors are naturally bullish about the infrastructure bill. In fact, even before that bill passed, Semtech was talking about how the American Rescue Plan Act of 2021 (passed in March) would mean that the Federal Emergency Management Agency (FEMA) would have a $50 billion Disaster Relief Fund to help state, local, tribal, and territorial governments respond to and recover from disasters.

Marc Pegulu, VP of IoT Product Marketing and Strategy for Semtech’s Wireless and Sensing Products Group obviously couldn’t put a figure on how much of that fund will be spent on the company’s myriad LoRaWAN sensors, but declared that Semtech is looking at the impact that Biden’s plan will have on diverse industries across numerous IoT-related sectors

“The influence of funds and mindset to recover quickly from President Biden’s plan will have such a great impact on numerous industries, from the supply chain and smart homes to natural disasters, climate change and beyond,” Pegulu said. “The IoT is expansive and continues to grow each day and we anticipate that Semtech – along with other key IoT providers and manufacturers – will positively witness the impact of this act.”

Pegulu also expects that the Biden infrastructure spend will reduce the time it takes companies to introduce new IoT products. “Industrywide, the average for the IoT design cycle is 12 to 18 months,” Pegulu states. “We anticipate that this timeline will accelerate, thanks to the infrastructure and financial support provided by this act.”

Christmas in July

So we can see that there are infrastructure projects that will require a great deal of IoT spending to implement. Initially, the upgrades to the many ports dotted around the coast of the U.S. will probably push IoT spending to new heights as the nation tries to ease the supply chain blockages that are affecting many citizens across the states. Little Johnny needs his PS5 in time for Christmas, and not arriving in mid-July!

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