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A collaborative approach to making smart cities a reality

3 December 2014

Thoughts from a seminar hosted by Charles Russell Speechlys on 13 November 2014:

“Smart communities”

From Orkney to Islington, smart technologies are changing the way communities interact with their environment and are allowing them to utilise existing infrastructure to its maximum potential, often in new and exciting ways.

The Orkney Islands’ smart grid was the first network in the world to link energy storage systems on an island network with the integrated output from solar, wave, wind and tidal electricity generation. By balancing supply and demand in real time, the introduction of a smart grid system allowed the island to harness its unique natural resources and increase its renewable energy generation.

Meanwhile, the London Borough of Islington is using its local resources in the form of hot air from the local Northern Line to generate heat for houses and a leisure centre.  

In both the Orkneys and Islington, the community’s use of locally available resources also helps reduce the energy waste from long distance transmission.

However, the real challenge is implementing such schemes on a city-wide scale, where smart technologies must be applied to pre-existing infrastructure networks which are typically intricate and often unwieldy. As Hitachi’s Jӧrg Nowack commented at our recent seminar, drawing on his involvement in the Copenhagen Project, it is this “interplay and interconnectivity” between different smart technologies which defines what it really means to be “smart”.

Three challenges

Malcolm Dowden, of Charles Russell Speechlys, drew on his advisory experience in this sector to set out the three main challenges to making Smart Cities a reality:


Smart Cities initiatives depend on good communications. However, the need for real-time communication and for the transmission of large volumes of data create their own challenges:

  • Technology­: In recent years we have seen existing communication technologies struggling with increased demand, with 4G experiencing network congestion and the very real possibility of a “data crunch” during the summer of 2012. A different model of spectrum management is needed to match a vastly increased demand.
  • Regulation: One way round network congestion is using the “white space” spectrum, developing devices which wander between networks. However, this highlights the other key challenge to communication: regulation. How can these wanderers be prevented from entering the regulated spectrum?  In a global environment where people view it as their “right” to use data, those engaged in developing technology need to be engaged in the regulatory challenge.
Energy - the need for a regular and reliable supply

Ultimately every technology relies on energy.

The existing UK grid structure is geared towards central generation. However a huge amount of energy is lost in the grid. More efficient would be local, renewable energy generation. But with this comes a host of practical and legal challenges, such as consumer’s right under EU law to demand a change of their energy supplier.

Procurement - what can I have?

The principal challenge here is a lack of clarity regarding what can be procured.

Contracting authorities should therefore be encouraged to adopt an “outcomes-based” approach, focusing on their desired end result. The benefits of this approach were seen clearly in a tender to achieve energy consumption savings. Rather than requiring additional infrastructure, it was found that the desired level of energy savings could equally be made through better management of existing systems, a discovery that might never been made had an outcomes-based approach not been adopted.

The Copenhagen example - Smart social infrastructure

The way these three challenges play out can be seen in Copenhagen’s aim  to become a model Smart City. In the opinion of Hitachi’s Jӧrg Nowack, machine to machine communication, innovative financing models and the creation of a consumer facing tech-market place are all big ticket components.

Central to the Copenhagen project is reaching carbon neutrality by 2025. This is being achieved by decarbonising mobility through encouraging alternative transport methods, generating energy locally and using it efficiently, and setting government policies which influence and encourage citizen’s behaviour.

Machine to machine communication

Parallels can be drawn between both Hitachi’s approach to the Copenhagen project and its evolution from its roots as a consumer electronics company. When shifting its market approach to social infrastructure, the wrong approach is just to add “IT” to get a “smart” outcome. Smart infrastructure systems must result in cost savings for the owner and machine to machine communication is key.

In recent years Hitachi have been involved in a number of rail infrastructure projects, notably in Japan and here in the UK.

Here Hitachi has identified that the “internet of things”, where sensors and machines are interacting with each other, plays a major role in such projects.

Maintenance and scheduling is key to profitability in rail operations. Real time data captured everywhere via sensors which are built into the trains and all along the track facilitate real time monitoring, analysis, control and maintenance.


In addition to technical innovation, Hitachi have also identified the need for innovation in business and financing models. As part of the growing trend to “servitisation”, Hitachi will own and maintain trains, but only get paid for “on time service”. The same approach is necessary for the roll out of smart systems on a city-wide scale.

With smart city systems, significant cost is driven by the size of the city and there are few cities which have the capital to invest at such scale. New financing models and long term payment plans are critical.

A unified data platform

A major challenge is the integration between old legacy systems and the migration to the next generation smart cities.

Hitachi is proposing a unified data platform for Copenhagen, allowing data to be shared and boosting connectivity. This will allow the data from one sector to impact another. The platform will effectively operate as a “data marketplace”, where local and global application developers can access information.

In order to create such an open data platform, agreements must be reached with private operators as well as local institutions.  The operators of the data platform must acquire data from the key players in order to give the platform the capacity demanded of a city-wide network.

Consumer facing applications

To make the creation of the data market place viable at industry level and to encourage the involvement of key industry players, the applications within the data market place must be consumer facing both for individual citizens and businesses. This means business to business applications to reflect what businesses do and citizen facing applications to address their role as both a consumer and the intricacies of daily life.   

When initially establishing the data marketplace, the “application store” needs to be filled with initial applications in order to spark and unleash the creation of entrepreneurial apps.

The challenge is to create the data market place and put it into the community in order to see what comes out. App developers need to be able to see that not just the app but more importantly the smart city infrastructure itself can be rolled out to other cities.

Rebuilding “the city”


For Living PlanIT’s Keith Hearnshaw, smart technology is truly changing the world we live in.

Echoing the thoughts of Jӧrg Nowack, we need to move away from siloed sectors, such as healthcare or education, and instead look to create a single unified platform. Living PlanIT has pioneered the creation of its “PlanIT Urban Operating System ™” which is now been used in numerous situations.

It underpins the sensor technology on the cars of the McLaren Formula 1 team. This allows the team to monitor in real time the intricacies of every aspect of a car’s performance and respond instantaneously to adjustments from the team control centre.

This same technology has since been replicated for use in the healthcare sector. The sensors that assess the car's performance on the track are now being used to monitor the vital signs of patients in the intensive care ward of Birmingham Children's Hospital.

In a recent project carried out for London City Airport, this software platform will enable innovation in the creation of a wide range of digital applications and solutions aimed at improving the passenger journey experience. The real customers of the airport were previously the airlines themselves.

The airlines knew and collected data about their customers, yet this data was not shared with the airport. In order to improve passenger experience, the airport needed to understand more about the passengers they service.

By working in consortium and taking a partnership approach, the aim is to integrate and utilise data collected in order to improve automation and interaction between passengers, retailers and service providers and ultimately reduce the use of natural resources.

Living PlanIT envisages that this technology can be rolled out to create “smart street lamps” which sense when a pedestrian is approaching, or “smart bins” which notify the council when they need emptying.

Alongside the “interplay and interconnectivity” between different smart technologies, in order to create a smart city it is necessary to take technology used at one level and apply that utility on many levels. It is more than just adding IT.


Yet 80% of the challenge is scaling-up this technology for use on a city-wide level.  Living PlanIT is to install an ultra-modern computer system in a huge “smart city” currently under construction in Brazil as an extension to the city of Cabo de Santo Agostinho. The IP for the project is owned by Living PlanIT, but the company by its self is not able to carry out the installation of smart technology on such a vast scale. Thus the company needs partners, for example IBM, who have the capacity to take on such a project and are able to work alongside Living PlanIT and the SME community at large to achieve the smart city vision.

It is often these young SME start-ups which have the great ideas and are constantly pushing the boundaries in technological development. Collaboration with big industry is required as larger bodies are needed to provide the infrastructure, for example to gather all the data into a central platform.

Who are the Smart Cities for?

Arguably for the future of smart technologies to remain on a city wide scale, it is important to develop technology for the benefit of individuals and society at large rather than merely the business community.

Smart meters are an updated version of traditional gas and electricity meters and allow energy companies to read the meter remotely. Customers will also be shown real time information on how much gas and electricity they are using, including how much it is costing and the related CO2 emissions. It has the ultimate aim of lowering energy consumption. However, the missing link to the truly smarter city is the use of this data once it is collected. Just like other service providers, the energy companies, recognising its commercial value, will have sole use and ownership of the collected data.

This seems at odds with the Copenhagen model which envisages a unified platform of machine to machine communication. There is also the concept of a continuous supply of free data for consumption by users of smart technology apps. It is this consumption and utility of technology which will then drive innovation. 

There is a risk of investment being directed only into revenue generating technology rather than towards the true advancement of smart cities. With the example of Birmingham Children’s Hospital the use of technology in areas such as education, employment and healthcare is advantageous to society at large. Although it is important to maintain competition in the marketplace, collaboration and a consortium led approach seems to be a solution. 

The benefits of data collection for large corporations and government agencies are clear. The challenge is in ensuring that smart technology has a positive impact on the lives of citizens. From reducing waste to making our streets safer and easier to navigate, the potential benefits are clear.

This article was written by David Berry.

For more information please contact David on +44 (0)20 7203 5170 or david.berry@crsblaw.com.