The Prime Minister announced an extra £45 million to develop the so-called "internet of things" as he arrived in Germany for the CeBIT 2014 trade fair.
He is attending the event in Hanover - where he is due to hold talks with German Chancellor Angela Merkel - as Britain is the official "partner country" of the event.
He said: "This is a world on fast forward. A world of permanent technological revolution. And in this world, countries like the UK and Germany will only succeed if we have a relentless drive for new ideas and innovations."
Another £45 million of taxpayer investment in "internet of things"-linked research will take the total being made available to £73 million.
Mr Cameron - who is accompanied by a five-strong industry delegation - said: "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.
"We are on the brink of a new industrial revolution and I want us - the UK and Germany - to lead it."