The Technology Strategy Board, which advices government on how to remove barriers to innovation, is investing up to £4m in a competition to stimulate the development of infrastructure for the Internet of Things (IoT).

With the number of connected objects predicted to reach 50bn by 2020, with huge potential for jobs, economic growth and improving peoples everyday lives, theyre hoping to identify new business models, applications and services that will work across different sectors of the economy.

For Phase 1, £2.4m has been allocated, awarding up to £800k to each successful applicant team to carry out a year of funded research and development. The teams will be asked to use real-world scenarios where problems can be solved by connecting physical things.

They will enlist the help of application developers, owners of data streams from the physical world and technology businesses who can make this data available and usable via open information hubs. Each cluster will have a prime contractor working with partners as sub-contractors.

These clusters will come together to build the IoT demonstrator, tackling interoperability by agreeing and sharing data formats and external interfaces. A further £1.6m is available in the second phase for scaling up the demonstrator. 

The deadline for registering is noon on 14 November 2012. Full proposals must be received by noon on 30 January 2013. Applicants should expect to start their projects no later than 1 April 2013.