Innovators from just about every industry and vertical are starting to tap big revenue streams from the ‘big data’ movement, with new business models springing up every day around the unprecedented volume and richness of data that we’re now able to manage and manipulate. But with all this data being churned out in the world at large, and the host of new technologies designed to leverage value from it, it is increasingly being seen as a resource like any other that we could all mutually benefit from.

That’s where the concept of the ‘smart city’ comes in – the idea that the exponentially increasing volumes of data generated by everyday life could be exploited for the benefit of whole societies and economies – and it’s an idea that is spreading like wildfire in urban centres throughout the world.

As a research report published in October last year by the Department for Business, Innovation and Skills (BIS) argues, the potential of data and analytics to create economic and social value for communities, particularly in urban areas, is enormous.

‘Cities can be great proving grounds for technologies, providing opportunities for people to invent new things, as well as opportunities to test and sell them,’ it says. ‘Cities therefore present an opportunity for suppliers and consumers of smart technologies.’ To this end, a number of cities around the world are using data technology to help address some of the challenges of urbanisation, such as resource management, improving services and the achievement of environmental goals.

Some of these pilot projects and experiments were demonstrated at the Smart City Expo – World Congress, held in Barcelona in November. For example, Rio de Janeiro, Brazil, won Best Smart City 2013 for its innovative city-wide information hub. Staffed by 400 operators, it monitors data including live images and smart maps of live traffic flows to prevent congestion, and even uses predictive analytics from social media to pick up on trending topics and prevent issues occurring.

But far more critically, staff at the hub are able to use seasonal rainfall data to assess when deadly mudslides are more likely to occur and alert the public or evacuate people accordingly. Since introducing the solution, emergency response times have been cut by 30%.

>See also: London appoints 'smart city' brain trust

Traffic report

Also highlighted was the use of real-time traffic data from 25,000 taxis in Seoul, South Korea, utilising a new touch-card payment system that uses GPS. The Seoul metropolitan government originally invested millions of dollars in sensors embedded into the road infrastructure in an attempt to gather the data for a range of uses.

Interestingly, it ended up scrapping the expensive sensor system in favour of a solution that did not affect infrastructure but instead made use of existing data streams that came about as a by-product of an innovation already being developed in conjunction with other players in the smart meter space, to build a more complete picture of the city’s taxi system. From this data, it is able to manage pricing and control the supply and demand of city-regulated taxis, directing them to where they are needed most.

The BIS report estimates that by 2020 the global market for smart city solutions could be somewhere in the region of $400 billion, with the UK’s share as high as 25% thanks to the country’s strengths in design, research, finance and engineering services.

This is quite a claim, but how might UK businesses grab their slice of this pie?

In the UK, the Technology Strategy Board is investing £50 million in the Future Cities Catapult, an innovation centre based in central London that has been working to nurture smart city solutions in UK cities since its launch last year.

During his research in putting together the investment proposition for the programme, Scott Cain, executive director of communications and business development at the Catapult, spent a fair amount of time looking into the projects that are already coming to fruition outside the UK.

‘What I noticed was a lot of relatively isolated, small-scale examples of innovative tech coming together in smart ways,’ he says, ‘but so far there has been a real lack of city-wide innovation strategies and deployment. So our particular lens is focused on integration and taking a joined-up approach.’

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Blurred vision

This strategy is a direct reflection of the findings of the BIS research report, which suggest that the main difficulty in innovative companies deploying smart city solutions in the UK is overcoming what it calls the ‘fragmented vision’ of the sector.

BIS identifies market segments – such as transport, energy, water and waste – by verticals, without much interaction between them. However, smart city solutions are disruptive technologies that require system-wide and large-scale cross-sectoral coordination to work. This is something that has been lacking in the UK so far, where, the report says, there is little incentive for diverse actors in a value chain to work together.

The remedy, says Cain, is fourfold: ‘Yes, taking a joined-up approach is about different technology coming together, but that’s just one component of it,’ he says.

‘It’s about new forms of governance, integration in terms of finance and, lastly and most importantly, listening to and deeply responding to the hearts and minds of the people who will benefit. You need to focus on all four of these areas to unlock the barriers to growth and enable different kinds of solutions to be rolled out and taken up at city scale.’

But the BIS report points to a general ‘reluctance to deploy untested but innovative products and services’ in the UK, where SMEs and start-ups relate tales of having to go abroad to deploy pilot projects due to utility companies and local authorities being unwilling to trial their products. It seems that councils and city authorities need a kick-start to encourage them to embrace smart city initiatives on a wider scale.

In January of last year, Glasgow City Council won a competition launched by the Technology Strategy Board involving 30 other UK cities where they were asked how they would address their particular challenges in a joined-up way using smart solutions given £24 million. Glasgow walked away with the £24 million investment, with London, Peterborough and Bristol receiving a smaller share of the pot.

In Glasgow, an information monitoring hub called the City Observatory has been set up to allow researchers from industry and academics from the University of Strathclyde to analyse more than 200 information feeds on the city’s health, economy, transport and energy use, many of which are being linked together in novel ways to map relationships between them and better understand how a 21st century city operates.

‘Glasgow has a pressing set of needs around fuel poverty, with a high proportion of people suffering from this, and also a real disparity in the life expectancy of people between the east and west areas of the city,’ explains Cain. ‘Data has helped the city council realise that the disparity has many reasons to do with health, diet and economic opportunity. There is now a recognition that it’s very hard for people in some parts of the city to access available jobs.’

Using the data, the council has put in place a city-wide demonstrator, and the benefits for citizens have already been widespread, with smartphone apps that allow people to view everything from footfall, traffic levels and live transport information to real-time waiting lists at hospitals. For those in the city council, everything from council tax collection to library usage is being linked together in ways that it has never been before. And it is being used to address some of the city’s core needs.

‘Different forms of low-carbon transport are now connecting people to the areas they need to access most,’ says Cain, ‘and the monitoring of energy levels across the city has enabled the new combined heat and power (CHP) systems to store energy when demand is low and then distribute it when demand is higher. This has the potential to help people cut their fuel bills and give all Glaswegians access to affordable heat and power.’

>See also: Who is really poised to make money from the Internet of Things?

Although centred on integration, Glasgow’s approach, says Cain, is very much a top-down one. ‘It’s based around Glasgow City Council taking a leadership position, which works in this case.

‘You can ask, “At what point does smart infringe on people’s civil liberties?” but when something like four in ten Glaswegians have reported antisocial incidents in the past 18 months, politicians are saying they’ve been given a mandate to intervene.’

Creative environment

A slightly more playful, grass-roots approach to the smart city concept is starting to be seen in Bristol, which won the £3 million second prize in the Technology Strategy Board's demonstrator investment competition. There, it is the high concentration of creative industries and the spirit of open collaboration that has inspired the Technology Strategy Board to invest, as well as bringing opportunities for businesses to engage in innovative services.

Bristol’s demonstrator money will be used specifically to provide local SMEs with the datasets to develop new customer-centric products and services for citizens.

Glasgow and Bristol may seem worlds apart in their approaches, but Gavin Starks, CEO of the Open Data Institute, points out, ‘While the government can help frame the key challenges, and provide seed funding, innovation doesn’t follow a set format.’

‘Innovation,’ says Starks, ‘often comes from cross-pollination and helping connect people to catalyse an open data culture.’

It is not an ‘either or’ between a company-led approach based around businesses having a free reign to experiment, and a government-led approach defined by working out specific problems. Instead, says Starks, it is based on SMEs, enterprise, academia, the public sector and government working together and sharing their data to deliver value for everyone involved.