04How is the government supporting the smart cities agenda?

The UK Government is using a ‘market making approach’ to try and ensure the right conditions are available to encourage the take up of new technologies. Businesses and cities cannot, on their own, solve the obstacles that hinder the growth of the smart technologies market. This is mainly because this market needs new standards, new infrastructure and regulation, which are beyond the individual scope of businesses and other stakeholders.42

The market making approach adopted by the Government involves intervention in three main ways: by playing the role of coordinator and bringing different interests and stakeholders together to establish new platforms for collaboration; by playing the role of funder, which consists of funding infrastructure and demonstrator projects; and playing the role of regulator, making sure that common standards and regulations are in place.42

Coordination: The Government recently established the Smart Cities Forum which brings together cities, academics, businesses and Whitehall departments to improve cooperation on product development and to build the business models needed for co-investment. The Government also launched the Future Cities Catapult which will help cities identify their challenges and explore how new technologies can be used to tackle them.44 The Catapult is also tasked with improving coordination between the private and the public sector, identifying the value and potential use of data, testing pilot projects in collaboration with city authorities and helping build business models to scale them up.

Funding: The Government is committing funding for testing smart projects and the promotion of related initiatives. These include TSB’s Future Cities Demonstrator project which awarded Glasgow £24 million to develop a city management system and £3 million each to London, Bristol and Peterborough to take smart projects forward. BIS also announced in February a £73 million funding for projects to help unlock the value of data.45 In addition, Research Councils UK is providing £95 million to support smart projects and the Government recently announced that £45 million will be available to technology companies to develop products. Other related support includes the establishment of the Open Data Institute in 2012 and a number of initiatives on smart energy and smart health that other government departments are undertaking.46

Regulation: The BSI is working on a set of papers to help guide UK cities to engage in this agenda. In addition to the Smart Cities Framework already published, it intends to publish a Smart Cities Concept Model which will help cities combine data from different sources, and a Smart Cities – Guide to Development which will look closely at the infrastructure needed for cities to become smart.47 BSI is also working with its Chinese counterpart and a number of international bodies to share knowledge and come up with international standards that support the smart agenda.48 Other support includes related regulations – such as the Open Data Standards – which the Government is gradually issuing in order to solve individual barriers in the market.

These government-backed initiatives represent good steps towards helping cities benefit from new technologies, but it is too soon to determine their effectiveness. Ultimately their success will rely on how cities, the private sector and other stakeholders support and use them.


  • 42 Sissons A & Thompson S (2012), Market making, a modern approach to industrial policy, London: Big Innovation Centre.
  • 43 Sissons A & Thompson S (2012), Market making, a modern approach to industrial policy, London: Big Innovation Centre.
  • 44 More information on the Catapult can be found here https://futurecities.catapult.org.uk/
  • 45 More information can be found on the BIS website https://www.gov.uk/government/news/73-million-to-improve-access-to-data-and-drive-innovation
  • 46 BIS (2013), Smart Cities background paper, London: BIS
  • 47 British Standards Institute (2014), Smart city framework – Guide to establishing strategies for smart cities and communities, London: BSI
  • 48 BSI Presentation