THE ANALYSIS OF THE INTERNET-OF-THINGS INDUSTRIAL

CHAIN BASED ON HYPERCYCLE THEORY

Qian Xiong, Xiyan Lv

Institute of Economics and Management, Beijing Jiaotong University, Beijing, China

Yanchun Liang

Institute of Economics and Management, Beijing Jiaotong University, Beijing, China

Keywords: Internet of Things, Industrial Chain, Hyper Cycle.

Abstract: This paper analyzed the development characteristics of China’s internet-of-things industrial chain based

on hyper cycle theory. It considered the development of the internet-of-things industrial chain as the result

of hyper cycle, just like the origin of life. After that, it analyzed the development status of this industrial

chain and the mechanism of its hyper cycle structure. After all, the internal and external factors had been

explored in order to provide some reference for the development of the internet-of-things industrial Chain

in China.

1 INTRODUCTION

The internet-of-things is to connect all the objects

with the internet by RFID and information sensing

devices such as barcode. Its ultimate purpose is to

reach the goal of identifying and managing wisely.

Besides RFID technology, the sensor technology,

nanotechnology, intelligent terminal technology will

also get more extensive application (Wei Liu et al.

2010). In China, the development of the

internet-of-things is still in the early stage and there

is still no uniform and standard definition about it.

The establishing process of China's

internet-of-things industrial chain can be considered

as the forming process of an organism. The current

domestic research of the internet-of-things mostly

concentrated in the technical level. For its industry

chain is seldom researched. This paper analyzed the

internet-of-things industry chain based on the hyper

cycle theory. It can provide theory foundation for

the policy making and strategic plan of the

internet-of-things industrial chain.

2 THE PRESENT

DEVELOPMENT SITUATION

OF CHINA'S

INTERNET-OF-THINGS

INDUSTRIAL CHAIN

The concept of ‘internet-of-things’ is based on the

premise that using RFID, intelligent terminal

technology to identify the objects and using

network to undertake data exchange. And then it has

been constantly extended and perfected.

In China, the development of the

internet-of-things is in the initial stage and domestic

manufacturers have just realized some small range

of applications such as Electronic Toll Collection

(ETC).

However, there are still a series of problems in

China's internet-of-things industry chain

development. For example, the development of each

unit on the industry chain is imbalance. Also, there

are obvious differences in the order of obtaining

profit and the future development space. What's

more, the leader of the industrial chain is not clear

and external support is not enough. These problems

need further and in-depth analysis in order to

explore effective and reasonable solution.

513

Xiong Q., Lv X. and Liang Y..

THE ANALYSIS OF THE INTERNET-OF-THINGS INDUSTRIAL CHAIN BASED ON HYPERCYCLE THEORY.

DOI: 10.5220/0003588905130517

In Proceedings of the 13th International Conference on Enterprise Information Systems (ITLS-2011), pages 513-517

ISBN: 978-989-8425-56-0

 2011 SCITEPRESS (Science and Technology Publications, Lda.)

3 THE SELF-ORGANIZING

FEATURE OF THE

INTERNET-OF-THINGS

INDUSTRIAL CHAIN

Self-organization means that various components of

the system interact and cause the system to achieve

the development of natural evolution without the

pushing of external forces. The hyper cycle theory

in the self-organization theory system can be used

to analyze the development process of industrial

chain. And that can provide some reference for the

problems such as the composition of the industrial

chain, the value chain in the industrial chain, etc.

Firstly, the formation of a self-organizing system

needs 5 main conditions: the system is open; the

external input reaches a certain threshold; the

system is far from equilibrium; the system is a

nonlinear system; the system faces fluctuation.

(Guangming Zhang et al. 2010)

(1) The openness of the internet-of-things

industrial chain

The development of China’s internet-of-things

industrial chain started evening compared with

developed country. So we should continuous learn

the advanced experience and technology from the

other countries. So it is obvious that the

internet-of-things industrial chain system is open.

(2) The external input reaches a certain

threshold

The research on China’s internet-of-things

industrial chain now emphasizes on technical level.

And the research on something beyond technology

such as the privacy security, legal protection and the

public approval degree is far from enough. Only

when the external input reaches a certain threshold

can the internet-of-things industrial chain system

reach an orderly state, and realize a stable

development.

(3) The system is far from equilibrium

The development of the units in the industrial

chain is not balanced. For example, the number of

the enterprises who manufacture application

equipment and provide the system integration is

large, while the links of chip designing and

manufacture as well as software application and

development is relatively weak. Anyhow, the

difference between units in the industrial chain fully

explained its character of far from equilibrium.

(4) The system is a nonlinear system.

The development of the internet-of-things

industrial chain is not the simple algebra addition of

the technology and service of every enterprise in the

industrial chain. The function inside the

internet-of-things industrial chain is nonlinear and

can emerge new qualitative.

(5) The system faces fluctuation

Fluctuation is the random disturbance on the

system and its structure. Only by enlarge the

function of fluctuation and create “giant

fluctuation”, can the system break the bondage of

original inertia and bring about qualitative change.

(Guangming Zhang et al. 2010)

Judging from worldwide, the development of the

internet-of-things is imbalance. Europe and

Japan-Korea countries are in the lead, while many

developing countries are just in the beginning stages.

So, the exchanges between counties will create a

“giant fluctuation”.

All in all, the internet-of-things industrial chain

has the feature of self-organizing. In the next step,

the author will use the hyper cycle theory, which is

a kind of self-organized theory, to analyze the

industrial chain specifically.

4 THE HYPERCYCLE

EVOLU-TIONARY PRINCIPLE

OF THE

INTERNET-OF-THINGS

INDUSTRIAL CHAIN

4.1 The Evolutionary Principle

of Hypercycle

The hyper cycle theory stated that the origins and

evolution of life is realized through the form of

hyper cycle organization. The formation process of

hyper cycle organization is as follows:

and I

are replicators which are closed and

quantitative. The replicate enzyme of I

is E

and the

one of I

is E

. Their replicate enzymes can

recognize the two DNA sequences which have a bit

difference. They are more conducive to replicate

either itself or the opposite side just because the

close degree in which their replicate enzyme and

DNA sequences combine is different. There are 4

coupling way between the two replicators and their

replicate enzymes.

If E1 can help to catalyze the self-replication of

I1 and can help to catalyze the self-replication of I2,

the competition between them is enhanced. Even I

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514

, E

is said to be in equilibrium, this balance is

fragile. And the result is ‘Survival of the fittest or

Survival of the luckiest’. (Figure 1(a))

If both E1 and E2 are more suitable to catalyze

the self-replication of I1 (I2) than I2 (I1), the result

is the self-replication of I1 (I2) is enhanced and the

self-replication of I2 (I1) is weakened. (I1) will be

replaced by I1 (I2) in the competition. (Figure 1(b),

Figure 1(c))



Figure 1: The interaction forms between replicators and

replicate enzyme.

However, if E1 can help to catalyze the

self-replication of I2 and can help to catalyze the

self-replication of I1, there will be no winner in the

competition between I1 and I2.Both of them are

forced to cooperate. The system which is composed

of replicators and replicate enzymes ultimately

develops the coupled mode of self-enhancement and

mutual enhancement and forms the two-unit hyper

cyclic structure.(Figure 1(d)) Only in this way of

hyper cycle can the organism be formed. After that,

the mutant of I1 called I1’may appear.( Figure 2(a))

If E1’ is more helpful for I

to replicate than E2, or

for I1 and I2 to replicate, the mutant I1’ will enter

the hyper cycle as I3. With the increasing

emergence of aberrance and natural selection, more

and more replicators can generate nonlinear

interaction by functional coupling, form

complicated multi-unit hypercyclic structure.



Figure 2: The forming process of the multi-unit

hypercyclic structure.

4.2 The Characteristics

of the Hypercycle Structure

of the Internet-of-things Industrial

Chain

The formation and development of the

internet-of-things industrial chain has the

characteristics of self-organized. If we regard the

industrial chain as living organisms, then the units

in the industrial chain are the replicators of the

organisms (I

in the hyper cycle structure).Every

replicator replicate in order to enhance and

consolidate its status in the internet-of-things

industrial chain. If there appears the mutant I

＇in

the process of aberrance, that means new units has

joined in the industrial chain. As long as the units

want to keep its status in the industrial chain, they

must play their core superiority as well as they can.

And they may affect the value creation of the others

through function coupling. That is the coupling

effect created by the self-enhancement and mutual

enhancement between replicators and replicate

enzymes. But there is a little difference between

living organisms and the industrial chain. That is,

the purpose of the organisms is to form a life, while

the purpose of the self-replication and coupling of

the units in the industrial chain is to create value.

The simulation relationship between the

internet-of-things industrial chain and organisms is

as follows:

Table 1: The simulation relationship between the

internet-of-things industrial chain and organisms.

the hyper cycle

structure of

organism

the internet-of-things

industrial chain

replicators which

are

closed(RNA)I

The units in the industrial

chain. Such as RFID & sensor

provider, the

internet-of-things operator.

Replicate

enzymes(informat

ion encoded by

RNA)E

The core technology,

profitability, business level,

innovative ability,

cooperation inclination of the

units in the industrial chain.

Replication of

replicators

The units manage its own

core technology and try

technology innovation and

business expansion.

THE ANALYSIS OF THE INTERNET-OF-THINGS INDUSTRIAL CHAIN BASED ON HYPERCYCLE THEORY

515

Table 1: The simulation relationship between the

internet-of-things industrial chain and organisms (Cont).

Replicate

enzymes is

helpful for the

self-replication of

replicators

The units try to achieve a

favorable development by

using its own comprehensive

strength and the information

obtained from the external.

Replicate

enzymes is more

helpful for the

other replicator to

replicate

If the technology innovation

and information of one unit is

helpful for the development

of another one, then they can

promote each other by

information sharing,

communication and

cooperation.

The aberrance of

replicators (there

appears the

mutant of I

called

’)

New unit wants to join the

industrial chain. It can either

perfect the function of the

industrial chain or form a

contrast competition

relationship with a certain

unit.

The aberrance is

meaningful. In

other words, the

replicate enzyme

of I

’is more

helpful for I

replicate than E

In this case,

’will become I

and it can join the

hyper cycle

structure.

If the technology and

professional ability

(professional software

products) of the new unit I

’

can meet the needs of I

(operators and service

providers) and it is more

conducive to the cooperation

with I

, then I

’ will join in

and form a better structure.

5 THE ANALYSIS

OF THE HYPERCYCLE

STRUCTURE OF CHINA’S

INTERNET-OF-THINGS

INDUSTRIAL CHAIN

5.1 Internal and External Analysis

Firstly, analyze from the perspective of the units

inside the industrial chain. The communication

network industrial chain can be regarded as a

relatively stable hyper cycle structure. All the units

in the industrial chain can be regarded as close

replicators in this hyper cycle structure. They use

their own replicate enzymes (core technology,

profitability, business level, and innovation ability,

cooperation orientation) to catalyze the

self-replication and mutually enrich. Along with the

development of the internet-of-things, besides the

original demands in the communication network

industrial chain, there exists new demands such as

internal technical demand, external policy demand

and environment support.

Driven by the new demands, the units in the

industrial chain begin corresponding technical

innovation and business expansion. They try hard to

meet these needs and improve its status in the

industrial chain. At the same time, relevant

enterprises outside the industrial chain (including

domestic and abroad) hope to join this emerging

industry chain relying on its technical superiority

and to obtain corresponding interest distribution.

In this process, on the one hand, communication

module providers and operators use their own

replicate enzymes (core technology, profitability,

and business level, innovation ability) to catalyze

the self-replication and aberrance. On the other

hand, there existed the mutant of the original

replicators from outside the industrial chain, such as

RFID & sensor providers.

5.2 Problems

To the current situation, both the internal units and

the external environment are quiet incomplete and

unstable, for instance:

(1) The Lack of dominant. The development of

any industry must depend on the convergence and

coordination of all units in the industrial chain and

reasonable distribution of benefits. So, to achieve

good development of internet-of-things industrial

chain, there must be a dominant to promote the

development of the whole industrial chain. Now，

there is still no dominant in the internet-of-things

industrial chain.

(2) The development of the units in the

industrial chain is unbalance and the coupling

capability between them is weak. This mainly

reflected in the RFID technology. Low-frequency

RFID technology is more mature while UHF and

microwave RFID lack of domestic technology.

Links which need relatively high technological

content such as IC design, software applications and

development are relatively weak.

(3) The lack of support from the external

environment. The current national policy guidance

has been adequate. But relevant laws and

regulations, security measures and public

recognition are far from enough.

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5.3 Suggestions

To conclude, for the current development of the

internet-of-things industrial chain in our country,

the investment and research should be strengthened

in the following aspects:

(1) Determine the leader of the industrial chain.

The leader of the industrial chain should have a

considerable degree of control. On one hand，it

should restrict the upstream equipment suppliers, on

the other hand it should increase control through

cooperation, specifically, in the form of purchasing

products and services.

(2) Continue to strengthen the research in

technology, especially in weak links such as chip

technology and related interface standards.

(3) Establish the reasonable mechanism for

cooperation and competition, and also the

mechanism for profit distribution. The mechanisms

should have the function of helping the units to do

the self-replication. At the same time, the replicate

enzymes are complementary. It means that the units

can achieve co-evolution by exchange of

information and complementary of resources.

(4) The formulation of related laws and

regulations is important, so is the research on safety

and security program. Also, it is necessary to

increase the propagandas among the public.

6 SUMMARIES

According to the analysis, the internet-of-things

industry chain in China is constitute of RFID and

sensor technology provider, communication

module provider, middleware provider, system

software integration provider and internet-of-things

operators. Then, it analyzed the hypercycle structure

of both the internal units and external environment.

In this way, it deeply analyzed the problems

existing. Such problems have the following impact:

Firstly, it can affect the self-replication of the units

in the industrial chain. Some units, especially the

technology provider, may be affected for the lack of

effective replicate enzymes, for example, technical

standards. Secondly, it can affect the coupling

capability between the units in the industrial chain.

This is has no good for the cooperation and

competition between units. What’s more, it can

affect the ability of selection and mutation of the

units. Such facts may bring about the threats of

Information security.

To conclude, the development of China’s

internet-of-things industry chain can not only limits

in terms of technology. It is also important to

formulate relevant standards and regulations,

determine the leader of the industry chain and

strengthen the propaganda among the public.

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Fan, Y. C. (2009). Research on Co-opetition Mechanism

of the Units in the Telecommunications Industrial

Value Chain. Jilin University.

Zhang, G. M. eds. (2010). Research on the

Self-organizing Features of Supply Chain Culture.

Technical Management Research, 250-252.

Yang, Y. P. eds. (2008). Study on the Mechanism of the

Forming and Evolution of the Firm’s Innovation

Networks Based on Hyper Cycle. Technical

Economic and Management Research, 24-26.

Liu, W. eds. (2010). the Concept Analysis of the

Internet-of-Things. Telecommunications Technology,

5-8.

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