This paper describes the results of a study group which I held in 2017 to look at the development of small and medium enterprises (SME) competitiveness using the Internet of Things (IoT) in 2016 and of related research. In Japan, it is rare to find complete IoT systems introduced in the production process of SMEs. The simple reason is that SME managers do not understand IoT, which can have two interpretations. The first one is the managers do not understand the complex technology. The second one is they do not understand the merits of the technology for their own companies. The study group adopted four SMEs as model cases, and fully conducted a trial and error process from the beginning of discussions to the introduction of IoT, which aims to have all SME managers consider this issue as their own matter. The discussions of the study group focused on the SMEs' production process in 2016, and focused on the production service companies in 2017. Also, some local governments will start support the introduction of IoT to SME in 2018 in the same manner.