The UK government will spend an extra £45m on developing so-called "internet of things" technology, David Cameron has announced.
The pledge more than doubles the funds available to UK technology firms working on everyday devices that can communicate over the internet.
The prime minister was speaking at the CeBIT technology trade fair in Germany.
Mr Cameron said the UK and Germany could find themselves on the forefront of a new "industrial revolution".
"I see the internet of things as a huge transformative development - a way of boosting productivity, of keeping us healthier, making transport more efficient, reducing energy needs, tackling climate change," he said.
"Take British ingenuity in software, services and design, add German excellence in engineering and industrial manufacturing and together we can lead in this new revolution."
The extra investment announced at the Hannover event, of which the UK is the official "partner country", will take the total being made available to £73m.
Sir Mark Walport, the government's chief scientific adviser, will now carry out a review into how these new technologies can be best exploited.
Analysts say the internet of things could transform daily life.
It allows devices from heart monitors to kitchen appliances to communicate through wireless internet connections.
US research firm Gartner predicts there will be nearly 26 billion devices connected to the internet of things by 2020.
Mr Cameron also said that the UK and Germany would work together to develop 5G, the next generation of mobile internet access.
He announced a new collaboration between the University of Dresden, King's College University in London and the University of Surrey.
"With 4G, an 800 megabyte movie takes around 40 seconds to download, with 5G that would be cut to one second," said Mr Cameron.