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Summary

The UK government, keen to stimulate investment into Internet of Things (IoT) in support of smart city projects, is to provide funding to aid pilots to the tune of £10m ($15.7m). While funding remains an issue for cities and local authorities keen to invest in this area, the lack of a coherent approach across individual cities and local authorities is a bigger barrier to adoption. In response, cities and local authorities must focus on frameworks that stimulate an enterprise-wide approach and broaden the mix between public and private investment.

Growth in IoT in support of smart cities requires more than funding for pilots

The use case for IoT is particularly strong within smart city projects, and many of the systems, applications, and services that address the needs of cities already exist. Funding for such trials helps demonstrate the art of the possible. However, many cities will struggle to realize the full benefits of implementations being undertaken today, let alone in the future, if they continue to undertake programs in isolation of each other.

While small steps can add up to a bigger benefit, the business case for IoT and smart cities investments can be complex and difficult to push through. Scarce funding, long payback periods, and a lack of enterprise-wide vision for building ICT platforms to support such projects, and the data they generate, add to the complexity. Cities and local authorities need to change their approach if they are to make the most of IoT.

We recommend cities and local authorities looking to address the barriers that are holding back the development of smart cities define their priorities through policies that support an enterprise-wide vision, and allow a mix of public and private enterprises to execute those polices and determine where it is best to make investment.

As a first step, cities should focus on the data they already have access to. This data can identify what priorities should be set. In conjunction, program leaders need to incentivize private sector enterprises to focus on these priorities through open data platforms. In turn, cities need to: establish regulatory frameworks in areas such as planning to support coordinated investments into digital infrastructure; enable greater access to data by establishing entities with responsibility for developing access to and the commercial application of its data; and coordinate with other authorities to develop solutions that can be scaled to support changing demands.

Appendix

Further reading

Deploying IoT: Lessons from the Utilities Front Line, IT0002-000326 (July 2015)

Author

Chris Pennell, Practice Lead, Public Sector

chris.pennell@ovum.com

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