Now more than ever, UK cities need to provide public services more efficiently while at the same time supporting sustainable and long term economic growth. The latest thinking suggests that the best way to do this is by becoming ‘smart’. This generally means using new technologies (mainly information and communication technologies)1 and data to improve service delivery and address various economic, social and environmental challenges.

For example, smart energy meters can help cities manage energy demand, reduce cost and safeguard the environment while the move towards online health consultations can also reduce cost and improve the quality of services. Smart transport initiatives like London’s ‘Oyster’ card or traffic control centre can also help the city manage traffic flows and reduce congestion, while making real time bus arrival data publically available can allow for the development of new mobile applications that make commuting in the city easier.

Due to the potential benefits of using smart technologies, UK cities are becoming increasingly active on this agenda. London and Birmingham, for example, have already issued their ‘smart’ plans and other cities are implementing smart-related projects (described in case studies at the end of the paper). Local Enterprise Partnerships (LEPs) are also incorporating smart initiatives in their Strategic Economic Plans and the Government is providing funding for smart projects and establishing forums for collaboration.
Yet despite some pilot projects being implemented, take up of smart technologies amongst cities is slow for two main reasons:

1. There is a lack of consensus on what ‘smart’ means and how cities should approach this agenda.

Becoming ‘smart’ means different things to different audiences, and this is causing confusion in the market, meaning that cities have no clear sense of which issues they should focus on and which technologies they should implement.

2. The smart technologies market suffers from a number of barriers (financial, technical and institutional) that need to be overcome if the market is to grow and mature.

Smart technologies are part of a new and emerging market where many of the products and services are still in their pre-commercial stage of development. Market weaknesses, ranging from the lack of risk financing to the shortage of capacity and cross-departmental working, are slowing down progress.

Cities wishing to take advantage of smart technologies need to set out their own vision for a ‘smart city’ based on three basic principles:

  • Integration: instead of drawing up smart city plans from scratch and in isolation from other initiatives, city authorities benefit most when they integrate smart initiatives within their existing economic development and public service plans and identify how new technologies can help them achieve the goals they already have.
  • Pragmatism: cities should focus the bulk of investment on smart projects that are practical, achievable and financially viable, while also leaving some room to develop and pursue innovative initiatives.
  • Participation: smart projects should be undertaken in partnership with businesses, the community and other partners (such as LEPs or neighbouring authorities) to make sure that they respond to local issues and needs.

Also, overcoming the barriers to growth of the smart technologies market requires joint working between national government, cities, businesses, users and other stakeholders. They should work together on sharing capacity, identifying the required standards and regulations and developing new risk-sharing models that will allow new technologies to be adopted at scale.

This Paper

This briefing looks at the smart city agenda in more detail, the reasons behind slow progress and the challenges that need to be overcome. While recognising that many stakeholders are involved in the smart agenda (including community organisations, local businesses, and citizens), this briefing mainly focuses on city authorities due to their role in setting out the long term economic plans for their areas.

Section 1 outlines the confusion over smart city definitions and Section 2 presents some of the activities that cities are involved in. Section 3 sets out the main barriers to developing the smart technologies market and Section 4 describes the UK Government’s approach towards supporting its development. Finally Section 5 sets out some conclusions.


  • 1 Information communication technologies are communication devices or applications that can retrieve, store or transmit information in digital form. This includes traditional technologies such as television and computers or more recent technologies like the internet, emails and mobile phones among others.