New research suggests smart cities will combine human effort with excellence in technology to create better places to live — and it's all predicated on the successful use of open data.

According to Lux Research, “Smart cities seek environmental sustainability, economic prosperity and convenient, livable spaces" through the use of technologies from big data and analytics vendors like IBM, SAP and Oracle.

But Alex Herceg, Lux Research analyst and lead author of the report wrote, said the real key is open data. "Open data is allowing entrepreneurs to develop apps for the city so it is opening cities up. We are at an interesting point of disruption right now,” he told CMSWire.

“A lot of the problems in the city can be managed using this data — traffic management, emergency response, transit, managing air quality. A lot of these problems are about information flow so if you can get the information — and maybe you need the right infrastructure to do that — then you can start to think about how you solve some of these problems.”

Focus on Infrastructure

He stressed that the core problem is information flow rather than finding information. Cities need to develop the right infrastructure for data transferal before they can start thinking about solving data-related problems.

Data and data management are essential, and represent the point where smart cities and the Internet of Things will meet.

Think of an IoT enabled car that is driven to work every day, for example. The car has temperature sensors, it has GPS, it records traffic build up, it monitors pollution levels. If that information is then provided to the city to create and develop better traffic management and better pollution control you have a smart city fed by IoT data.

Herceg conceded it was still challenging to balance privacy and open data and to ensure privacy while using data provided by consumer devices.

“You will have those that say ‘I don’t want the city to have my data because it’s my data.’ There needs to a clear communication and understanding and agreement |between cities and individuals] so that the city can use data to provide better living conditions. That will be the crossover point."

He cited the example of the city of Leeds in England, which spends 60 percent of its budget on healthcare. However, it is currently using monitors for aging in place —letting older adults stay at home rather than transferring to assisted care homes or hospitals.

“In Leeds, the health service is monitoring people through remote sensors in the own homes. That’s one of the crossover points. It is it smart city, it is smart home, it is connected mobile health,” he said.

“The data is where the IoT, smart cities and everything else is going to come together. This is where this open data for the city data has become a big deal and there is a lot of work around it because you can start to look for synergies.”

Big Money at Stake

According to research published this week by MarketsandMarkets, the value of IoT solutions, applications and platforms in smart cities is estimated to grow from $52 billion this year to $147 billion in 2020, a compound growth rate of 23 percent per year.

According to the research, the major drivers include increasing demand for intelligent cities and rising demand for IoT devices. This is being driven by more than 200 smart city projects across the globe.

It points out that the development of smart devices such as smart meters, home gateways, smart appliances and smart plugs will also act as opportunities for the IoT in smart cities market, particularly in data management.

It also found that North America will demonstrate the largest growth of the IoT in the smart cities market through 2020, with a growing number of smart city projects and increasing grants from the US government.

Riding the IoT-Smart City Train

The potential hasn’t been missed by those muscling their way in the IoT and smart city market.

Last week, Microsoft announced the creation of an IoT incubation center in Redmond, Wa. in partnership with HCL Technologies, a global IT services provider. It is designed  to bring Microsoft’s Azure IoT suite to the enterprise and to accelerate enterprise IoT adoption.

The incubation center is targeting smart cities by building vertical solutions focused on two key growth areas: industrial and manufacturing, and life sciences and healthcare.

IBM has a long history in Smart Cites and is rapidly building out its IoT business, dragging its Watson supercomputer unit into the mix.

Cisco has its Internet of Everything (IoE) — Cisco’s name for the IoT —  center which is also tackling the challenge of smart cities. In its introduction to the IoE it states: "Over the past few years, the definition of smart cities has evolved to mean many things to many people. Yet, one thing remains constant: part of being 'smart' is utilizing information and communications technology (ICT) and the Internet to address urban challenges."

The emphasis on data is everywhere. If the IoT presents business with unparalleled opportunities for those that know how to seize them, so do Smart Cities.

But there are problems ahead, starting with  bureaucracy and ranging to privacy and security issues, inadequate financial incentives and technical issues around interoperability and standards.

Title image (CC BY 2.0) by Fred Stampach