Federal Investments in IoT Infrastructure Offer 10-20x Return, NIST Study Finds

The Internet of Things is transforming our daily lives, affecting industry, academia and government, with significant economic, social and national security implications. This evolving technology has the potential to enhance U.S. global competitiveness, increase the resilience of our nation and contribute to increased economic security.

At their simplest, Internet of Things (IoT) devices contain sensors and actuators to monitor and control the physical environment in which they are embedded. IoT devices contain microprocessors and memory to process data and communicate with the internet. The data from IoT devices may be analyzed in the device, on a nearby server (“edge”), in a moving vehicle (“mobile edge”), or in a remote data center (“cloud”). Examples of consumer IoT devices include smart phones and smart home thermostats. Factory environments contain many types of IoT devices; for example, connected sensors monitor the mechanical vibration levels of manufacturing equipment and alert plant managers if a machine is behaving abnormally.

NIST awarded the research and innovation advisory firm Strategy of Things a cooperative agreement for a study to assess the potential economic impact of federal research investments in developing the technological infrastructure and strategic technologies to support IoT. The study, Economic Research and Analysis of the National Need for Technology Infrastructure to Support the Internet of Things, was published earlier in 2025.

During the time this study was conducted, the rising prominence of Artificial Intelligence (AI) has reinforced the importance and relevance of IoT. The Internet of Things provides AI with a data source to build and train algorithms and models. In turn, AI enables IoT systems to make sense of the monitored conditions and respond to these situations.

The research sought to inform the federal government of research investments needed to address IoT technology infrastructure gaps hindering the development, adoption and operation of the Internet of Things.

The study:

• Identified 11 strategic areas of federal research investment to address IoT technology infrastructure gaps in the short, medium and long term.
• Estimated that federal research in IoT infrastructure would have a ten-to-twenty-fold return on investment.
• Concluded that the federal government is well positioned to offer a whole-of-government approach to addressing the IoT technology infrastructure gaps.
   

For more details on the study, please see the NIST Technical Series Publication NIST GCR 25-059--with a Digital Object Identifier (DOI).  This is the official version of record, so please use the DOI when citing the publication. https://doi.org/10.6028/NIST.GCR.25-059