Outstanding technological know-how in key areas, such as information and communications technology, system integration and cyber-physical systems, has made German manufacturers leaders in individual segments of the market for smart home and building systems. Any other additional market potential, however, can only be accessed with cross-system interoperability and reliable IT security. These two aspects, i.e. simple implementation of smart home applications, e.g. with Plug & Play, and privacy protection, are important preconditions for acceptance among end customers. This means that the smart home must be open for interdisciplinary collaboration between the different industries involved in its implementation, especially when it comes to introducing new innovative services to market. The traditional division of labour now has to be overcome while new application forms that combine previously separate domains have to be developed.

The Internet as a communication structure is the driver behind many convergent technology developments, just like for the smart home. Machines, consumer goods, household appliances or vehicles with increasing IP capability mean that uniform communication standards are foreseeable and it will be possible to implement cyber-physical systems that enable new use and cross-domain value processes in the worlds where we live and work.
In recent years, the Internet of Things has reached such a level of maturity that networking now requires much less effort. Uniform system architectures can reach the most varied applications, enabling an interoperable combination of different technical interfaces, devices, applications and communication systems on a single platform.
It's all about linking components and devices with computing power and storage capacity in order to transform them into smart objects that enable complex systems to interact. Teamed up with suitable software, they can solve tasks independently, perform sensory and actuating functions and communicate with other smart objects via the Internet. At this level of abstraction for key functions (smart X), the challenges facing the smart home, Industry 4.0 or even the smart city are more than just related.
The smart home, for instance, poses many of the challenges that are addressed by the AUTONOMICS for Industry 4.0 technology programme: Just like the smart home, interaction between very different domains is one of the key challenges in implementing Industry 4.0. The entire technological know-how from mechanical engineering and plant construction, from automation technology, logistics, electrical engineering as well as information and communication technologies now has to be bundled, common language levels must be found and cross-domain integration processes must be quickly introduced.

By taking a closer look at the paradigm shift and analysing the technological challenges, we can see strong analogies between control and monitoring tasks in industry based on the spread of digitisation and technological solutions in a digitally networked smart home. Both of these are cyber-physical systems that allow a new form of interaction between machines and between man and machine. Linking the real world to the virtual Internet world also makes it possible to implement new net-based services in the smart home and smart industry and can open up new added value for suppliers of devices/systems, as well as for providers and data analysts.

In this sense, the smart home debate must be seen as part of paving the way for the fourth industrial revolution, i.e. Industry 4.0. If the German business sector is able to successfully shape the future market of the smart home, it would demonstrate its ability to act strategically and to innovate, setting a good example for other systemic smart X innovation fields. At the same time, if German companies were to become global leaders here this would also lead to sustainable strengthening of economic development in Germany because by setting central standards and development solutions, German companies would attain an innovative lead, giving them an excellent competitive position on the global markets.